• New Combined Heat and Power plant in Speyside, Scotland will generate enough renewable energy to power more than 20,000 homes.
• The world famous Macallan distillery will use the heat generated by the plant in the form of steam, a critical component of the distillation process.
• John Laing and the UK Green Investment Bank to invest £26m, alongside £48m debt to be raised from the bond market, guaranteed by HM Treasury.
John Laing and the UK Green Investment Bank (GIB) have today announced plans to invest in a new £74m green energy facility in Speyside, Scotland developed by Estover Energy Ltd (Estover).
The new biomass Combined Heat and Power (CHP) plant near Craigellachie, Moray, will generate 87.4 GWh per annum of renewable electricity – enough to power more than 20,000 homes. It will also generate 76.8 GWh per annum of renewable heat. Together, the carbon saving equates to 42,000 tCO2e per annum, the equivalent to taking over 18,000 cars off the road.
The project will create 123 jobs (100 in peak construction and 23 permanent) and support one of Scotland’s most important export industries.
The new CHP facility will contribute to reducing the cost of energy at The Macallan distillery by providing c. 90% of all of the steam needed in the distillation process. By using biomass to generate heat instead of natural gas, the distillery will reduce its greenhouse gas emissions by over 17,500 tCO2e, equivalent to taking almost 8,000 cars off the road.
John Laing and GIB intend to make a £26m equity investment in the project. The remainder of the funding, in the form of debt, will come from a bond to be issued by the project company and listed on the London Stock Exchange. When issued, the bond will be guaranteed by Infrastructure UK, part of HM Treasury. The bond marketing commenced today. GIB and John Laing’s investment is conditional on the successful conclusion of the bond process.
The project is being developed by Estover Energy, an Edinburgh and London based SME specialising in developing biomass CHP projects. The plant will be fuelled with sustainable forestry by-product sourced from the local area, one of the UK’s most productive forestry areas. A consortium of local growers and forest industry suppliers including Stobart Biomass Products Ltd. and UPM Tilhill will supply the plant.
Business Secretary, Vince Cable said:
With £3.8 billion of funding the UK Green Investment Bank has been set up to help businesses make the transition to a green economy right across the country.
This investment in Speyside will not only help secure jobs, boost a vital industry and support the local supply chain but also generate renewable energy for homes in Scotland. 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.
Chief Secretary to the Treasury, Danny Alexander said:
The Speyside guarantee is fantastic news for Scotland’s economic future. It will power thousands of homes with clean energy, and also support the whisky industry, a cornerstone of our economy, which brings in billions for Scotland and employs over 10,000 people.
Today, over £1 billion of infrastructure projects have now been brought forward as a result of the UK guarantees scheme and £36 billion worth of projects are pre qualified. Our action is creating the right conditions for more investment in our infrastructure and helping to build a stronger economy.
The Secretary of State for Scotland, Alistair Carmichael said:
I am delighted that the UK Green Investment Bank is investing in Speyside in a project that spans two of Scotland’s great strengths – renewable energy and whisky.
From combined heat and power plants to energy efficient street-lighting, I am proud that this Edinburgh-headquartered UK institution is working to create jobs, boost industry and improve the environment in our cities and our rural economy across Scotland and the rest of the UK.
Lord Smith of Kelvin, Chairman of the UK Green Investment Bank, said:
This project is a great example of the wide ranging benefits of renewable energy. It generates power from a sustainable source, reducing the UK’s greenhouse gas emissions. It generates heat for a local business, the iconic Macallan distillery, helping to save it money and reduce its carbon footprint. It supports local landowners who are providing much of the fuel. And it creates and supports local jobs.
This will be a significant investment in Scotland’s rural economy, creating modern, green infrastructure that will benefit local people as well as the environment.
Derek Potts, Executive Director for Primary Investment at John Laing, said:
This is an exciting investment for John Laing, not only because of the clear opportunities that the facility will create for the Speyside economy but also because this is our first investment in biomass CHP and a significant milestone in our growing presence in the renewable energy sector.
Marcus Whately, Co-CEO of Estover Energy said:
The Speyside project is the first of four similar projects that bring together some of the most respected names across several industries. The result is low-carbon energy for British industry, creation of rural jobs, and a major infrastructure investment for this part of Scotland.
Max Aitken, Co-CEO of Estover Energy said:
This is a great step forward for Estover. To attract such high-quality investors for our first project is a ringing endorsement of the experienced team we've built up, and we look forward to financing our wider portfolio over the coming months.
Graham MacWilliam, General Manager – Distillation, The Macallan, said:
The Macallan is delighted to have received planning permission for our new distillery from The Moray Council, which in turn has enabled the Estover project to move forward. The new distillery, which will benefit from the heat generated, is creating further employment opportunities through the commencement of this project in addition to delivering environmental and economic benefits.
Notes to editors
About the project
Equity investors: £26m from John Laing and GIB
Debt investors: £48m expected to be raised from a bond issuance, guaranteed by Infrastructure UK. GIB and John Laing’s investment is conditional on the successful conclusion of the bond process.
Total project cost: c. £74m
All financial numbers will be finalised upon the successful conclusion of the bond process.
Electricity: 87.4 GWh / year sold into the National Grid, enough to power more than 20,000 homes.
Heat: 76.8 GWh / year sold to the Macallan distillery, supplying all the steam needed for the distilling process.
Other environmental benefits: 42.0 ktpa CO2e saved each year, equivalent to taking 18,000 cars off the road, by replacing a portion of natural gas used by the National Grid with renewable energy.
Developer: Estover Energy
Jobs created: 100 in construction and 23 permanent operational roles.
Capacity: Up to 12.5 MW electric and up to 10 MW heat.
Feedstock: A consortium of local growers and forest industry suppliers including Stobart Biomass Products Ltd. and UPM Tilhill will supply the plant. Expected commission date: 2016
John Laing plc is a leading international infrastructure investor and asset manager, principally for the public sector. By combining its skill in the management of development risk, project financing, asset management and operations with those of it chosen partners and the project supply chain, it has built an enviable reputation as a market leader in privately financed infrastructure. John Laing’s key target sectors include transport, accommodation, health, waste and renewable energy, focusing on markets in North America, the UK, Continental Europe and the Asia Pacific region.
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.
Estover Energy is a developer of biomass Combined Heat & Power plants, based in Edinburgh and London. The Speyside project is the first of a portfolio of similar plants that Estover is developing around the UK that provide low-carbon energy for British industry, create rural jobs, and deliver major infrastructure investment.