Power plant that runs on whisky waste wins funding

WASTE from more than a dozen distilleries is set to be turned into power for up to 9,000 homes after an energy developer secured funding for its £60.5 million project on Speyside.

Aim-quoted Helius Energy - in which Perthshire investor Angus MacDonald holds a 19 per cent stake - finalised financing for the scheme after signing up Dutch lender Rabobank, which joins existing backers Lloyds Banking Group and Royal Bank of Scotland.

Lloyds and RBS will supply about 42.4m of debt for the project to build a combined heat and power (CHP) plant at Rothes, in Moray, while Rabobank will take an equity stake.

Solid residue, or "draff", from local distilleries will be taken to the site and burned along with wood to provide up to 7.2 megawatts (MW) of electricity, which will be used to power local homes and to run and animal feed production process. Steam created will be used to evaporate liquid residue - or "pot ale" - into a syrup, which can then be used to make animal feed.

At present, waste from Speyside's distilleries is taken to the animal feed plant in Rothes, which burns gas to evaporate the pot ale. Helius said its project will cut out the production of about 46,000 tonnes of carbon dioxide equivalent each year.

The CHP plant will be built next to the existing animal feed factory, which is owned by the Combination of Rothes Distilleries (Cord), a joint venture set up in 1904 to process whisky waste.

Cord handles by-products from 16 Speyside distilleries. It is owned by a consortium of Edrington Group, Chivas Brothers, Glen Grant Distillery, Inver House Distillers, Diageo Distilling, BenRiach Distillery and John Dewar & Sons

Engineering work has already begun and construction is due to start within 12 weeks. The plant is scheduled to be commissioned during the third quarter of 2012 and fully operational during the first half of 2013.

The CHP project will create about 100 jobs during construction and employ about 20 full-time staff once operational.

Under the financing agreement unveiled yesterday, Rabo will take a 44.7 per cent stake in the company set up to complete the project, with Cord retaining a 5.3 per cent share and Helius holding the remaining stake.

Alan Lyons, Helius's chief financial officer, told The Scotsman: "This deal shows there is still funding available for biomass CHP projects. We are in early discussions with funders to develop our much bigger project at Avonmouth in Bristol."

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