HARGREAVES Services has won support from the Green Investment Bank for its plan to develop a £150 million energy from waste plant at Grangemouth as it looks to breathe new life into relics of the coal industry in Scotland.

The company has appointed a Scots energy industry heavyweight, Alex Lambie, to lead its efforts to build a new power business focused on the country.

Mr Lambie will lead a new subsidiary, Brockwell Energy, that will take forward plans to develop power generation schemes on former opencast mining sites.

The creation of the business forms the latest stage in the reform process initiated by Durham-based Hargreaves after the business was hit by the fall in the coal price earlier in the decade.

Hargreaves acquired seven sites in Scotland from the administrators of ATH and Scottish Resources Group in 2013 but has wound down all but one of them.

The plan to develop a 22 megawatt plant at the Earl’s Gate complex in Grangemouth is one of Brockwell’s key projects.

The plant will burn 200,000 tonnes of fuel derived from industrial and household waste annually to supply heat and power to chemical manufacturers on the Earl’s Gate site.

After winning planning permission in January, Hargreaves has signed a Memorandum of Understanding to develop the project in partnership with the Green Investment Bank, which is expected to take a 50 per cent stake.

The bank made no comment. The signing of the MOU signals faith in the potential of the Earl’s Gate plant, which Hargreaves expects to generate significant long-term returns.

Another key project for Brockwell is a plan for an energy from waste plant at Westfield in Fife, on the site of what was one of the largest opencast coal mines in the UK.

Stephanie Clark, Policy Manager at Scottish Renewables, said: “Energy from waste is a simple way of using waste in a productive way to generate heat and electricity, while helping us work towards Scotland’s ambitious zero waste targets.”

Brockwell will work on plans for onshore wind farms, which could generate 400 megawatts in total. Hargreaves said these would deliver significant site restoration benefits.

The company did not name the sites. It has consent for three wind farms in South Lanarkshire.

Mr Lambie noted the project portfolio could provide a strong platform to develop a larger energy business.

The formation of the subsidiary could make it easier to recruit partners to help fund the energy business and share the risks involved in developing projects.

Led by chief executive Gordon Banham, Hargreaves said directors wanted to simplify the group’s operations and limit the capital demands on the business.

The group said: “This is likely to lead to the Group reducing its economic interest in the energy portfolio through the injection of external capital into Brockwell, which will both control the development risk and protect the Group’s balance sheet.”

Mr Lambie led Spanish utility Endesa’s European expansion drive before developing the Welsh Power business. He lives in Edinburgh.

Hargreaves operates the House of Water site in East Ayrshire.

ATH had mines in Ayrshire, Fife and Dumfries and Galloway. Scottish Resources Group owned Scottish Coal, which became a major opencast producer after it focused previously on deep mines.