SCOTLAND'S community energy revolution is to receive a major boost with the creation of a new multi-million fund for localised power schemes.
UK Business Secretary Vince Cable has made £60million available for a raft of community-scale renewable construction projects, starting with a hydro-electric power scheme just north of Loch Lomond.
The announcement, which comes as the senior Coalition Government minister visits Scotland today (tue), will fund up to 30 projects generating enough new renewable energy to power 17,500 homes.
Recent figures show renewable power has overtaken nuclear to become the main source of electricity in Scotland, with demand from local communities for investment in renewable energy projects undergoing a resurgence.
The largest single source of equity funding available for UK community-scale renewable energy projects, it is hoped the cash, made available by the Green Investment Bank, will have positive social impact on local communities, their use of their land and resources.
The first project to be announced from the new investment 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 1900 homes.
Mr 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 2000 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."
GIB has committed to provide up to £50m, with the Strathclyde Pension Fund (SPF) investing a further £10m.
Power generation company Albion Community Power plc (ACP), which builds, controls and operates community-scale renewable energy projects across the UK, is also involved. It 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 £1million and £10m for a broad range of community-scale renewable construction projects including hydro-power, onshore wind on brownfield sites such as industrial estates, and biogas projects.
It is estimated that 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 per cent of this capacity is in Scotland.
Lord Smith of Kelvin, chairman 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."
Cllr Paul Rooney, chairman 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 we 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."
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