Vince Cable, Business Secretary today visits the UK Green Investment Bank head office in Edinburgh to launch a £60 million fund for community-scale renewables projects across the UK – which is being part-financed by thousands of Scottish council workers in the mammoth Strathclyde Pension Fund
The first project to be funded by the scheme is a new Scottish hydro-electric power scheme near Crianlarich, north of Loch Lomond.
The new finance will be the largest single source of equity funding available for UK community-scale renewable energy projects.
The new finance will fund up to 30 projects generating around 24 MW of new renewable energy – enough to power 17,500 homes.
The new investment in community-scale renewable energy projects is being channelled through Albion Community Power plc.
ACP is a power generation company that builds, controls and operates community-scale renewable energy projects across the UK. It has already identified a substantial project pipeline and will invest the capital on behalf of GIB and SPF.
GIB has committed to provide up to £50 million with SPF investing a further £10 million. Meanwhile, ACP aims to attract a further £40 million from additional co-investors to take the total sum of investable capital to £100 million.
The finance will be used to provide equity funding of up to £10 million per project for a broad range of community-scale renewable construction projects including run-of-river hydro-power, onshore wind on brownfield sites such as industrial estates, and biogas projects including anaerobic digestion and landfill gas.
The pipeline will be built in partnership with project developers who include as Infinite Renewables, based in Bridgend, Wales, and Green Highland Renewables, based in Perth. This is the first investment in hydro-power by Green Investment Bank and Strathclyde Pension Fund
The first project to be announced from this new investment – to be developed by Green Highland Renewables – is a 2 MW run-of-river hydro-power project on the River Allt Coire Chaorach near Crianlarich, approximately 10 miles north of Loch Lomond.
The £8.5m project will generate 8 GWh of electricity per year, equivalent to the power requirements of about 1,900 homes.
Run-of-river hydro projects use the natural river flow to generate renewable electrical energy. Across the UK capacity exists for an additional 800 MW of new hydro-power projects, enough to power over 500,000 homes with renewable energy.
Building-out this capacity would see an investment of over £3bn in remote rural communities. Around 80% of this capacity is in Scotland with the remainder split between England and Wales.
Speaking Edinburgh, Business Secretary Vince Cable, said: “Renewable energy is the future, and we must continue to use all of the new and established technologies at our disposal to power our homes and businesses in a way that doesn’t damage the environment.
“Hydro power has a vital role to play in this. The first project to be funded from a new investment by the Green Investment Bank will use the natural flow of Scotland’s rivers to generate electricity.”
This project, based in Crianlarich will produce enough power for nearly 2,000 homes and provide high-skilled jobs for the rural communities in Scotland. The Green Investment Bank is at the heart of our industrial strategy, creating sustainable jobs and growth.”
Lord Smith of Kelvin, Chairman, UK Green Investment Bank, added: “The UK is in the process of transforming how it generates its power. In future we will see less reliance on a small number of large power stations and more focus on a network of smaller, locally generated, renewable sources of power.
“Hydro is one example of how we can do this and we are delighted to play our part in helping this market grow, bringing investment to rural communities along the way.”
Councillor Paul Rooney, Chairman of Strathclyde Pension Fund, commented: “There are many great opportunities to generate sustainable, renewable energy at a community level – including the West Central Belt. But it can be difficult for even the best-structured projects to access good long-term finance.
“I’m pleased that Strathclyde Pension Fund will be providing funding to innovative projects that might otherwise have been frozen out of the market – and that the investment made by our members in their own future will support the future of our communities, through improved infrastructure and jobs.”
Volker Beckers, Chairman, Albion Community Power, said: “We are delighted to welcome GIB and Strathclyde as new investors in ACP. It is a clear sign that institutional demand for community-scale renewable energy is growing and ACP is well placed to benefit from this trend. Having institutional investors will help ACP build many more renewable energy plants in 2015.”
Richard Round, Chief Executive, Green Highland Renewables, said: “The sub-2 MW hydro power industry is extremely active in Scotland at present and the new funds available from ACP will play an important role in helping developers secure the finance required to build schemes”.