Business Secretary announces £60m boost for UK community-scale renewable energy projects. Vince Cable, Business Secretary, visits UK Green Investment Bank headquarters in Edinburgh to announce a new source of finance for community-scale renewables projects across the UK.
•New finance will fund up to 30 projects generating c.24 MW of new renewable energy, enough to power 17,500 homes.
•The first project to be announced is a new 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.
Today the UK Business Secretary Vince Cable announced a new investment of £60m by the UK Green Investment Bank (GIB) and the Strathclyde Pension Fund (SPF) in UK community-scale renewable energy projects, through Albion Community Power plc (ACP).
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 £50m with SPF investing a further £10m. ACP is working to attract a further £40m from additional co-investors to take the total sum of investable capital to £100m.
The finance will be used to provide equity funding of between £1m and £10m 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 such as Infinite Renewables, based in Bridgend, Wales, and Green Highland Renewables, based in Perth, Scotland.
The first project to be announced from this new investment – to be developed by Green Highland Renewables (GHR) – 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.
This is the first investment in hydro-power from GIB and SPF.
Speaking from the GIB headquarters in 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, Chair of UK Green Investment Bank, said:
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, Chair of Strathclyde Pension Fund, said:
There are many great opportunities to generate sustainable, renewable energy at a community level, including here in the West of Scotland – 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, Chair of 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 Officer of 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.
The involvement of GIB is extremely welcome and underlines the potential for well-constructed hydro projects to deliver stable returns to investors.
About the UK Green Investment Bank The UK Green Investment Bank was launched in November 2012. With £3.8bn of funding from the UK Government, it is the first bank of its kind in the world. It is a “for profit” bank, whose mission is to accelerate the UK’s transition to a greener economy, and to create an enduring institution, operating independently of Government. GIB has also invested £100m in a £200m lending programme for community-scale renewable energy projects to be managed by Temporis Capital LLP. www.greeninvestmentbank.com
About Albion Community Power
ACP builds, owns and operates renewable energy plants across the UK. ACP receives executive support, advisory and administrative services from Albion Ventures, which has a strong track record in renewable energy projects. To date Albion has invested or committed £60m in renewable energy projects and, of this, £35m is now producing energy. http://www.albioncommunitypower.co.uk/
About Strathclyde Pension Fund
The £14bn Strathclyde Pension Fund is one of the UK’s largest, providing services to around 200,000 people across the public, private and third sectors. It is part of the Scottish Local Government Pension Scheme and is administered by Glasgow City Council. http://www.spfo.org.uk/
About Green Highland Renewables
Green Highland Renewables specialises in the development of small scale hydro-electric schemes. Since 2007, GHR has worked on a wide range of run-of-river schemes at every phase of the development process, from initial concept through to consent, construction and operation, as well as providing remedial works and scheme optimisation. http://www.greenhighland.co.uk/