The operator of a combined heat and power (CHP) plant and district heating scheme has been bought by investors, including the Green Investment Bank (GIB), with the aim of expanding to other local customers including care homes.
The GIB and Equitix have paid £9.8m for Ignis Biomass, which in 2013 took over operation of a district heating scheme that the then-owner The Highland Council was planning to close.
Ignis switched the fuel source from oil to use locally sourced woodchip, and installed a new 3.5MW steam raising boiler to supply hot water to Caithness General Hospital, Wick Assembly Rooms, homes owned by Cairn Housing Association and approximately 200 other households.
Steam goes to the adjacent Pulteney Distillery, where Old Pulteney, an award-winning single malt, is made (pictured).
Plans are in place to upgrade the heating infrastructure at the plant and expand the district heating system, with the aim of reaching an additional 150 customers by March 2017.
It is also intended to add at least four smaller-scale standalone CHP systems for major heat users in and around Wick, typically in the care home sector.
The Equitix-managed fund Energy Savings Investments, in which GIB is an investor, put up £4.8m while £5m of private capital has come from the Equitix Energy Efficiency Fund.
Regen manages the project while facilities manager FES FM will oversee operations and maintenance.
GIB chair Lord Smith of Kelvin said: “The district heating project in Wick has already shown other parts of the UK how it can be done and I am pleased that GIB’s investment will be playing a key role in extending its reach.”
Scottish energy minister Fergus Ewing said: “The Scottish Government’s District Heating Loan Fund has helped support the Wick scheme in its early stages and helped householders and businesses, along with the local hospital, benefit from low carbon, affordable heat.
“This announcement shows that there is a positive appetite for investment in district heating schemes and helps the Scottish Government to realise our ambition to increase the uptake of district heating in Scotland.”