A commercial heating scheme, which it is claimed will result in lower costs for community facilities across Shetland, has received a funding boost from Scottish government agencies.
A new wood pelleting plant at Gremista, run by local business North Fish (Shetland) Ltd is supplying energy to the Lerwick District Heating Scheme, reducing the system’s need to use more expensive heating oil.
Later this year, the plant is to go greener – being powered by a new wind turbine project at North Hoo Field, the hill at the rear of Gremista Industrial Estate.
Highlands and Islands Enterprise said this will result in more residents and businesses being able to use hot water, heated using renewable sources for heating, at a significantly lower cost.
Parts of the project are being supported through the Renewable Energy Investment Fund (REIF) and Highalnds and Islands Enterprise (HIE).
The Lerwick District Heating Scheme (LDHS) is operated by Shetland Heat Energy and Power (SHEAP), part of Shetland Charitable Trust. It has a series of pipes that run through Lerwick and provide hot water for heating to houses and businesses.
It heats the hot water by burning waste from the Shetland Islands Council incinerator (energy recovery plant) in Gremista, heating two thermal stores.
HIE said the energy recovery plant cannot always supply enough hot water to LDHS to meet demand, particularly in the winter. When this happens the thermal stores are heated using more expensive heating oil.
The new wood burning, drying and pelletising plant at Gremista, was developed by North Fish.
The 500kw wind turbine project which will power it, is being set up at North Hoo Field, with the support of a £700,000 loan through REIF.
Andrew Smith, head of REIF, said: “North Fish’s innovative project is an excellent example of how renewable energy can be used to support a community heating project, and at the same time create jobs and economic opportunities.
“A key part of REIF’s remit is supporting initiatives such as this – and this is exactly the type of project we need to see more of in Scotland as we work towards becoming a truly low carbon economy.”
HIE has supported North Fish with the development of the plant with a £39,039 grant towards feasibility studies and £40,000 towards the purchase of a wood pelleting machine.
David Priest, development manager at HIE, said: “This is an ambitious and far-sighted scheme that enables a genuine low carbon cheaper heating alternative for large users of energy.
“The project has been undertaken at significant risk and meant North Fish having to completely restructure their operations, but it now will enable the business to grow and provide low-carbon solutions to other sites in Shetland and beyond.”
The Gremista plant also produces wood pellets, which are used as a sustainable fuel, supplying community facilities at four sites in Shetland – Brae, Aith, Yell and soon Whalsay.
Biomass boilers are water heating boilers that burn wood pellets rather than oil. It is also considered low carbon as wood is not a fossil fuel.
Angus Grains from North Fish said: “North Fish are delighted to be able to secure funding from both HIE and REIF.
“North Fish have invested over £1million in this phase of the project, which is now nearing completion with the turbine being built in the next couple of months.
“The turbine will provide all our manufacturing power requirements and is designed to be able to export any surplus energy into the local grid or provide hot water for export into the Lerwick district heating network.
“Our customers are currently benefitting from the lowest heating cost available, and have also minimised their carbon emissions.
“We are currently planning expansion with new heat networks at sites in Whalsay and Scalloway. On completion of this next phase, we will have 2MW of renewable heat capacity in operation, with the expectation of displacing almost one million litres of oil annually.”
The purchase of a wood pelleting machine will also result in North Fish creating a full time, skilled job and allow heating services to be provided to other community facilities across Shetland.