The future of a multi-million £ heating scheme for a Fife town hangs in the balance after the Scottish Government today refused to plug the £7m shortfall in the project’s funding.
Fife Council had approached the government for the extra funding for the Glenrothes district heating project after it realised the cost to make the scheme a reality had spiralled dramatically.
The original cost of the project had been estimated at £21m, but after tenders had been secured the scheme had spiralled to £29.7m, which forced the Fife authority to seek additional help from the government.
But with Holyrood now confirming it will not commit any more cash to the scheme, it leaves question marks over the long-term viability of the project that was designed to deliver low-carbon, cost-effective heating via the Markinch biomass plant to hundreds of businesses and homes throughout the town.
Despite the embarrassing situation both Fife Council and the biomass plant operators RWE now find themselves in, Keith Winter, Fife Council’s Executive Director for Enterprise and Environment said he still felt a scaled down heating project could be achieved.
“Following confirmation that our bid for additional funding from the Scottish Government has been unsuccessful, we now need to consider the option with our funding partners to deliver a reduced scale district heating scheme,” said Mr Winter.
“This would still appear to bring significant capital investment to Glenrothes, and could enable opportunities to access funding for future phases.”
And Jenny Gilruth, the town’s MSP, has called for clarity on how the funding shortfall was allow to happen.
She said: ‘The Glenrothes District Heating Project should be a good news story for the town. It should be about low carbon investment. It should be about jobs. It should be about cheaper energy.
“I am extremely disappointed that Fife Council’s sums don’t seem to have added up.
”This was, as I understood it, a partnership between RWE, the Scottish Government and the Council. Fife Council are now going knocking on the door of the Scottish Government in the same week the Scottish Budget Government settlement awarded them over £10m more in funding.
“I think people need clarity on how these sums were ever agreed to in the first place.
“Fundamentally, however, we need an assurance that the project is not going to fail.
“Last week Glenrothes lost 40 more jobs when the kitchen’s manufacturer Murray and Murray went bust. In the same week it was reported that 30 per cent of children in the town are growing up in poverty.
“Glenrothes needs investment - now is the time for all parties to work together to ensure this project goes ahead.”
Despite the huge setback, RWE sat it remained committed to the project.
“It is important that the Glenrothes Energy Network delivers low carbon heat efficiently and cost-effectively to ensure the best possible results for all parties involved in the project,” said Park Picton, RWE plant manager at Markinch.
“We believe schemes like this are important environmentally and could continue the very important work that Scotland has already done to decarbonise its economy. RWE is very supportive and we hope that a local heat project can be realised.”