Edinburgh-based UK Green Investment Bank and Equitix have complete the £9.8m acquisition of Ignis Biomass, the owner and operator of a 3.5 MW combined heat and power plant and associated district heating scheme in the north of Scotland.
The network in Wick, Caithness, currently provides heat and power to the Pulteney whisky distillery and heat to local customers who include Caithness General Hospital, Wick Assembly Rooms, Cairn Housing Association and 200 other domestic residences.
Ignis Biomass specialises in the generation of renewable energy from sustainable sourced timber, providing UK businesses and public sector organisations with local solutions to energy supply, waste management and reducing CO2 emissions.
Ignis took over the district heating scheme from Highlands council and has converted it from burning oil to use locally sourced wood chip.
In Wick, heat is predominantly generated by heating oil or liquid petroleum gas (LPG) or via a local gas grid fuelled by liquefied natural gas tankered in by road. The district heating network supplies heat from a biomass-fuelled plant direct to customers through a network of pipes, providing significant cost savings and environmental benefits.
By replacing oil and gas heating through the district heating network and generating renewable electricity from the CHP, the project will save an additional 3,000 tonnes Co2e (carbon dioxide equivalent) each year.
Plans are in place to upgrade the heating infrastructure at the plant and expand the district heating system with the aim of reaching an additional 150 customers by March 2017.
Plans are also in place for the implementation of at least four new smaller-scale standalone CHP systems for major heat users in and around Wick, typically in the care home sector, for whom connection to the existing network is not viable.
The Equitix-managed fund Energy Savings Investments – in which GIB is a cornerstone investor – has committed £4.8 million to the project. An additional £5m of private capital has been mobilised from the Equitix Energy Efficiency Fund.
Regen Limited, which has acted as project manager to the network for the past four years, is contracted under a project development agreement to help develop the project. Stirling-based facilities manager FES FM Ltd has been appointed to oversee the operations and maintenance of the network.
Lord Smith of Kelvin, Chairman, UK Green Investment Bank, said: “While the UK has made good progress in developing new renewable energy generation to decarbonise our electricity production, much, much more remains to be done to improve how we heat our homes and businesses more effectively and sustainably.
“The district heating project in Wick has already shown other parts of the UK how it can be done and I am pleased that GIB’s investment will be playing a key role in extending its reach.”
Geoff Jackson, Chief Executive, Equitix, said: “This deal is the first district heating scheme in our energy efficiency portfolio, and we look forward to further investing in the expansion of the scheme and through these investments will continue to do what we set out to do: creating a more sustainable UK.”