£2.5 million renewable heating fund for Scotland

By Katie Anderson on October 2nd, 2012

Scotland aims to generate 11% of its non-electrical heat demand from renewables by 2020 and to help the country meet its ambitious target the Scottish Government has announced that £2.5 million of funding has been made available for district heating schemes across the country. 

The District Heating Loans Fund is in its second year and applications are now being taken for next year’s round of funding (2013-14). Local authorities, energy service companies, social landlords and small and medium sized enterprises can apply for a loan to help them implement low carbon and renewable technologies as part of district heating schemes designed to benefit local communities.

Scotland smashed its target of generating 3.5% of heat from renewables last year; figures from the Energy Saving Trust revealed that the country managed to generate in the region of 3.8% of heat via low carbon and renewable technologies.

Up to £400,000 is on offer per project, which can be borrowed and repaid at a low rate of interest (3.5%) over a maximum ten year period. Under this year’s scheme ten projects were awarded £2.1 million of funding. The lucky recipients included:

  • West Highland Housing Association – a sheltered housing complex, comprising of 24 flats will have its current electric storage heating system replaced by a 100kW woodfuel district heating system.
  • Ullapool Community Trust – a proposed community wood fuelled 200kW biomass district heating project.
  • Charterhall Estate SMS – proposal for a 195kW biomass heat only district heating scheme, following an energy audit which identified biomass as the most energy efficient option to replace existing expensive oil/lpg heating system.

Last year Comrie Development Trust was awarded £190,000 towards its Cultybraggan District Heating project. Commenting on the heating fund Alan Caldwell from the trust said: “This project illustrates perfectly the Trust’s commitment to a low carbon future, helping us to attract businesses, create jobs and bring wider benefits to our community through our development of the land at Cultybraggan Camp. The availability of this type of loan finance makes such investments achievable.”

Energy Minister Fergus Ewing said the Scottish Government was committed to helping homes and businesses cut their heating bills and stay warm with minimum impact to the environment by supporting the development of low carbon district heating networks.

“The high start up costs involved can mean schemes fail to get off the ground because commercial finance isn’t available. By offering these loans, we are helping communities to help themselves, developing affordable, green and locally produced heat,” he added.

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