Cash crisis leaves £29m Council heating scheme on the brink

An ambitious multi-million pound project to supply low-cost heat to hundreds of homes and businesses in Glenrothes is hanging in the balance because the scheme's estimated costs have spiraled.

Tuesday, 23rd January 2018, 12:01 pm
Updated Friday, 26th January 2018, 4:18 pm
The biomass plant at Markinch is to supply the heat butthe multi-million £ project has now been left in the balance.

‘Glenrothes Heat’ is the scheme devised to capitalise on the spare output generated from the Markinch biomass plant following the demise of the Tullis Russell papermill.

Its aim is to provide the town with a sustainable low-carbon enegy supply and had originally been estimated to cost in the region of £20m.

But a Fife Council progress report to councillors this week has revealed between £5.9 million and £7.2m of additional funding will be required if the project is to become a reality.

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“The scheme would be financially unsustainable without this,” said Keith Winter, Executive Director, Enterprise and Environment, in his report.

He added: “Therefore, Scottish Government approval of this increase is an essential pre-condition for any final approval by the council.”

The lowest tender cost for delivering the project now stands at £29.7m, significantly more than the pre-tender estimates given.

The team behind the project were looking to get formal approval to a business plan in the coming weeks, but with the council having been forced to ask the Scottish Government for further funding, and stringent funding deadlines determined by European restrictions, fears are growing that the project could be left dead in the water.

The Fife authority has a ten per cent stake in the project, while Biomass plant operators RWE and the Scottish Government meeting the rest.

Commenting on the embarrassing situation Fife Council now finds itself in, Mr Winter said: “We’re currently waiting to hear back from the Scottish Government on the additional grant funding.

“It’s intended a business case will go to the next Policy and Co-ordination meeting on February 15 to consider final approval of the project.”

The proposed heat network will contain around 16.8km of insulated steel pipework, and former Tullis Russell buildings have already been demolished to make way for the proposed site.

“We are all agreed this is a great project that makes best use of a valuable asset in the biomass plant, but we are where we are,” said Glenrothes councillor Altany Craik.

“I still expect this to go ahead but we have a number of issues including funding that need to be worked through.”