Over £1.9 million of loans to help develop district heating schemes have been announced by Energy Minister Fergus Ewing.

Nine projects have been offered loans, including multi storey housing in Cambuslang, an arts centre in Ullapool and a high school on Shetland.

The projects will heat around 280 homes as well businesses, schools, swimming pools and community centres, while saving around 68,000 tonnes of carbon dioxide over 25 years.

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This year’s loans are part of a pilot scheme open to local authorities, housing associations, small to medium sized enterprises and energy service companies.

The scheme was designed to help address the financial barriers to district heating schemes, as borrowing commercially to fund these schemes can be extremely difficult and expensive.

All nine of the successful projects are for small community biomass heating systems.

The news comes on the day that Mr Ewing also established the Expert Commission on the delivery of district heating. The Commission, to be made up of academics, industry leaders, local authorities and environmental groups, will work to accelerate progress towards the Scottish Government’s manifesto commitment to make a major move towards district heating in Scotland.

Energy Minister Fergus Ewing said:

“This Government is committed to supporting the development of low carbon district heating networks in Scotland, helping homes and businesses stay warm with minimum impact to the environment, creating jobs while bringing heating bills down.

“We have a target of 11 per cent of heat demand coming from renewables by 2020 and district heating schemes will help Scotland achieve that target,

“But 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.”

Loans were available up to £400,000 to fund the capital costs of the projects, and will be paid back over 10 years at 3.5 per cent interest. Over £1.9 million of loans have been awarded.
Loans offered by local authority area:
Aberdeenshire

Hill of Banchory ESCo Limited – Hill of Banchory Business Park District Heating – £100,000 – Biomass (wood fuel) – extending an existing district heating scheme to connect to a new business park.
Argyll and Bute

West Highland Futures/ West Highland Housing Association – Mull and Iona Progressive Care Centre – £200,000 — Biomass (wood fuel) – providing heating infrastructure for this medical facility.

West Highland Housing Association – Dalintart – £280,000 – Biomass (wood fuel) – heating for a school and 60 properties.

West Highland Futures/ West Highland Housing Association – Glenshellach biomass extension – £200,000 – Biomass (wood fuel) – extension to an existing network to provide heat to 75 homes.
East Lothian

Colstoun Capital Ltd – Colstoun Capital district heating project – Biomass (wood fuel) – £178,512 – connecting three buildings including a proposed cookery school as part of the Coulston Estate in Haddington.
Highland

Ullapool Community Trust Limited – Ullapool Community Building’s Biomass District Heating Scheme – £260,859 – Biomass (wood fuel) – district heating project connecting village hall, arts centre and swimming pool.
Perth and Kinross

Comrie Development Trust – Cultybraggan district heating system – £164,000 – Biomass (wood fuel) – application to fund district heating scheme for a site which provides accommodation to local businesses.
Shetland Islands

North Fish (Shetland) Ltd – Mid Yell district heating scheme – £170,000 – Biomass (wood fuel) Installation of 200kw biomass boiler to connect a leisure centre and a junior high school.
South Lanarkshire

West Whitlawburn Housing Co-operative – West Whitlawburn district heating – £400,000 – Biomass wood pellet – replacing electric storage heating in two tower blocks in an area of multiple deprivation.

£5 million has been allocated in the spending review to continue the scheme.

Membership of the Expert Commission will be announced in due course.

Source: The Scottish Government