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Business secretary Vince Cable has announced an investment of £60 million in new UK community-scale renewable energy projects.
Of this, £50 million will be provided by the UK Green Investment Bank (GIB) and the Strathclyde Pension Fund (SPF) will invest a further £10 million.
Power generation company, Albion Community Power (ACP), has identified a substantial project pipeline and will invest the capital on behalf of GIB and SPF. The firm hopes to attract a further £40 million from co-investors to take the total amount of funding to £100 million.
The finance will be used to provide equity funding of between £1 million and £10 million for a range of construction projects including run-of-the-river hydropower, onshore wind on brownfield sites, and biogas projects such as anaerobic digestion and landfill gas.
The first development from the investment will be a 2 MW hydropower project on the River Allt Coire Chaorach near Loch Lomond. The £8.5 million plant will generate 8 GWh of electricity per year.
Capacity has been pinpointed for an additional 800 MW of hydropower projects in the UK, with 80 per cent of this capacity in Scotland. Building-out this capacity would see an investment of more than £3 billion in remote rural communities.
GIB chair Lord Smith of Kelvin said: “In future we will see less reliance on a small number of large power stations and more focus on a network of smaller, locally generated, renewable sources of power.
“Hydro is one example of how we can do this and we are delighted to play our part in helping this market grow, bringing investment to rural communities along the way.”
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