The UK Green Investment Bank (GIB) has today announced £5m of funding for a pipeline of energy efficiency projects at a number of Scottish distilleries.
Half of this will come from GIB, with matched funding from the private sector.
Today, GIB is announcing that Aberfeldy distillery in Perthshire will be taking advantage of the new funding available.
This follows GIB's announcement last year of an investment at the Tomatin distillery, near Inverness. Tomatin is on track to reduce its greenhouse gas emissions by c. 80%.
The projects will finance the installation of biomass boilers, to replace the existing, inefficient, heavy fuel oil boilers. This will reduce the distilleries' energy costs and their greenhouse gas emissions, without requiring any up-front capital investment. The boilers will be used to produce steam, necessary for several parts of the whisky production process.
The Aberfeldy project will use the same core biomass boiler technology and systems as at Tomatin. Engineering and installation works will commence immediately.
Bacardi, who own the distillery, have estimated that the project could reduce the distillery's carbon footprint by up to 90%, by replacing 100% of the heat currently generated from fuel oil.
Aberfeldy Distillery was founded by John Dewar & Sons, Ltd. in 1896 and opened in 1898. The distillery is located on the outskirts of Aberfeldy, on the southern bank of the Upper Tay. Aberfeldy is the largest malt whisky component of Dewar's Blended Scotch Whisky. It relies on the fresh water stream Pitilie Burn, which runs alongside the distillery and is the only distillery in Scotland to use these waters.
Rob Cormie, Group Operations Director, UK Green Investment Bank, said:
Projects like this can help distilleries to save money and reduce their greenhouse gas emissions. I would encourage other distilleries to install a biomass boiler or other energy saving technology - an investment to make long term savings and to help to meet the industry's ambitious green targets. Our 'spend to save' model means that companies don't need to find the capital up-front and can start saving money from day one.
The investment is being made by the Equitix-managed fund, Energy Saving Investments (ESI), in which GIB is the cornerstone investor, alongside the Equitix Energy Efficiency Fund (EEEF). The investment is in partnership with Balcas Limited (Balcas), a British SME and leading UK manufacturer of wood pellet biomass.
The new biomass boilers will be fuelled by sustainably sourced wood pellet fuel. The pellets are manufactured by Balcas using renewable energy and raw materials sourced from local, sustainably managed forests at their plant at Invergordon.
Business Secretary, Vince Cable, said:
The UK Green Investment bank, capitalised with £3.8 billion, has been set up to help businesses make the transition to a green economy right across the country.
This investment in one of Scotland's most important industries will help secure jobs, support the local supply chain and become more energy efficient.
"Through our industrial strategy we are working in partnership with business to give companies the confidence to invest, securing green jobs and a stronger UK economy.
Ernest Kidney, Managing Director of Balcas said:
Having a secure fuel supply and reducing environmental impact are two major challenges facing distilleries and are two key benefits delivered by our integrated energy solution. The Vyncke biomass steam boiler at Aberfeldy distillery will be up and running by the end of 2014 and will reduce the distillery's carbon emissions by over 5000 tonnes annually, displacing all of the oil currently used onsite. We look forward to helping Aberfeldy distillery achieve their corporate and industry targets for reduction in fossil fuels.
Stuart Lowthian, Global Technical Director, of Bacardi said:
We are excited to be implementing a sustainable energy solution for our Aberfeldy distillery which will reduce our carbon footprint by around 90%. This will be our second investment in biomass solutions for energy generation in the UK. The first was in our Bombay Sapphire gin distillery at Laverstoke Mill and we will be following up with a similar biomass investment in our tequila distillery in Mexico later this year. These investments underline our "Good Spirited" global sustainability initiative to work with partners to build a sustainable future. We are hoping to make further investments in sustainable power in Scotland in the future.
Geoff Jackson, Chief Executive Officer, Equitix, said:
Aberfeldy distillery is the second project that Equitix have closed with Balcas as part of a pipeline of opportunities to install biomass boilers into the Scottish whisky distillery industry. The distilleries are able to reduce their heating costs by converting from oil to wood pellets as well as reducing their greenhouse gas emissions. We look forward to continuing to invest in the sector and help distilleries achieve these targets.
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Notes to editors
UK Green Investment Bank
The UK Green Investment Bank was launched in November 2012. With £3.8 billion 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.
The ESI fund forms part of GIB's allocation of investment into Non-Domestic Energy Efficiency (NDEE), one of its priority sectors. GIB awarded the competitive mandate to Equitix to invest £50 million, matched by private investors, to drive investment in small-scale low carbon infrastructure.
Equitix is a company established to deliver and manage infrastructure projects from bidding and closing through to construction and service provision. Its reputation is built upon strong relationships with its clients and partners, as well as a committed approach to every project in which they are involved and investment they make.
Balcas is the largest manufacturer of wood pellet fuel in the British Isles. It will supply the Tomatin distillery from its plant at Invergordon, Ross-shire. At Invergordon biomass is combusted in a Combined Heat and Power (CHP) plant, and the emerging steam is condensed to drive an electrical generator. The residual heat is used to reduce the moisture content of locally sourced woodfibre that is processed into high-energy fuel pellets. All of the electrical and thermal energy used in the process are therefore from renewable sources. Balcas' wood pellets that are marketed under the company's "brites" brand, providing energy to displace 100 million litres of oil per year, reducing carbon emissions by 300,000 tonnes.