Huge question marks have now been raised over a major multi-million district heating scheme in Fife after the Scottish Government rejected a request for additional cash.
The Courier can exclusively reveal that Fife Council chiefs have been left with a huge headache following the funding blow in relation to the Glenrothes Heat project.
The scheme aims to use heat from RWE’s Markinch biomass plant to provide a sustainable low carbon supply to several hundred domestic, commercial and community properties in the north of the town – including the council’s Fife House headquarters.
Hopes were high that a formal business case could be drawn up for approval as early as this month, but the future of the project was said to be dependent on additional grant funding being secured from Holyrood.
Tender costs came in significantly higher than pre-tender estimates, and Fife Council formally asked for extra money of between £5.9 million and £7.2 million to help meet a revised total price tag for the initiative of £29.7 million based on the lowest estimate.
However, that request has now been knocked back – leaving the entire scheme up in the air.
Keith Winter, Fife’s executive director for enterprise and environment, admitted last month that Glenrothes Heat was likely to be “financially unsustainable” without the extra funding from Edinburgh and, in an update to councillors, said failure to secure the cash would “knock this on the head”.
Nevertheless, despite the latest turn of events, Mr Winter clearly still believes some sort of pipeline network may yet be possible.
“Following confirmation that our bid for additional funding from the Scottish Government has been unsuccessful, we now need to consider the options with our funding partners to deliver a reduced scale district heating scheme,” he commented.
“This would still appear to bring significant capital investment to Glenrothes, and could enable opportunities to access funding for future phases.”
The proposed heat network involved around 16.8km of steel pipework, equivalent to 8.4km of buried pipe trench, capable of serving hundreds of homes and businesses.
But councillors were told last month that the project involved a huge element of risk, as the local authority did not have a great deal of expertise in selling heat to customers.
Deadlines were also said to be tight, as commissioning of the system had to be done by December 8 this year and heat provision to Fife House and Rothesay House in place by the end of January 2019.
Where the project goes now is anyone’s guess, but Mark Picton, RWE Markinch plant manager, said: “It is important that the Glenrothes Energy Network delivers low carbon heat efficiently and cost-effectively to ensure the best possible results for all parties involved in the project.
“We believe schemes like this are important environmentally and could continue the very important work that Scotland has already done to decarbonise its economy. RWE is very supportive and we hope that a local heat project can be realised.”
