£2.3m to develop water source heat pump schemes.
A new Challenge Fund is being launched today to encourage the development of large scale water source heat pump schemes in Scotland.
Water source heat pump technology extracts heat from water even on the coldest days and uses the heat stored in water sources from rivers, canals, and lochs to supply low carbon heat efficiently.
The Water Source Heat Pumps Challenge Fund, which is part of the Low Carbon Infrastructure Transition Programme, will support the development of large scale projects which need assistance to attract further investment. £375,000 is being made available to help with the development of investment grade business proposals.
The Challenge Fund is targeted at individuals and organisations from the public, private and community sectors with project proposals which can supply low carbon heat to district heating systems in Scotland but need to secure further investment to complete the installation of their scheme.
Support of up to a further £2 million will be available to those with a fully developed investment grade business proposal but who have been unable to identify private investment and are therefore seeking financial support for commercially viable demonstrator project activity.
Speaking ahead of the debate in Parliament this afternoon on Future of Renewables and Energy in Scotland Mr Ewing said:
"Supporting the development of district heating and wider low carbon technologies will help maximise the economic opportunities from Scotland's low carbon sector.
"Today I am pleased to announce that we are turning our attention to accelerating large scale Water Source Heat Pump Projects to support low carbon district heating schemes in Scotland.
"Heat is estimated to account for over half of Scotland's total energy use and responsible for nearly half of Scotland's greenhouse gas emissions, so the imperative to take action is very clear.
"We have already made significant progress and will continue to work together with energy experts, businesses and communities to move towards our target of having have 40,000 homes connected to district heating by 2020."
Professor David Sigsworth said:
"As the Chair of the Fuel Poverty Strategic Working Group and Vice President of The Association for Decentralised Energy, I welcome the call for large scale Water Source Heat Pump projects targeting Scotland's rivers, lochs and canals.
"Demonstration of the benefits of innovative projects like these to local communities is key to wider uptake and a further step towards the provision of low carbon low cost heat to more households in Scotland."
Stephanie Clark, Policy Manager for Scottish Renewables, said:
"This new funding will kick-start the sector in Scotland and help towards meeting our 2020 target of sourcing 11 per cent of our heat demand from renewables.
"With heat accounting for more than half of our energy demand developing technologies that can generate clean, reliable heat on a large scale is vital."
However Ms Clark warned: "A major hurdle in our path is the UK Government's review of the subsidy mechanism, the Renewable Heat Incentive. The budget for RHI ends in March 2016 and we have yet to receive any clarity on whether they will maintain it up to 2020. Removing this uncertainty would allow the sector to grow and secure a long term future for itself."
The funding call is being offered through the Low Carbon Infrastructure Transition Programme (LCITP). is a collaboration between Scottish Government, its enterprise agencies and sector specialists
, to support the development and acceleration of low carbon infrastructure projects in the next 3 years. For further information about the call, visit www.scottish-enterprise.com/watersourceheatpumps .
More information about the LCITP is available at http://www.gov.scot/Topics/Business-Industry/Energy/Action/lowcarbon/LCITP
The Scottish Government recently published its Heat Policy Statement (HPS), setting out its approach to working towards decarbonising the heat system along with a framework for investment in a low carbon heat sector http://news.scotland.gov.uk/News/Low-carbon-heat-plans-published-19da.aspx