Another Big Heat And Power Plant For Highland

16th November 2006

A PROPOSAL to create a £24million Combined Heat and Power plant at Invergordon has won wholehearted support from Highlands and Islands Enterprise (HIE) with its board agreeing to a £5.5million contribution to the project.

Northern Ireland-based company Balcas Ltd plans to develop its operation on the former Alcan smelter site at the Cromarty Industrial Park.

Balcas Ltd is one of the largest suppliers of wood products in the UK and its new plant in Easter Ross will create 38 full-time jobs. Independent consultants reckon this will rise to 207 jobs for the wider area, increasing to 307 over Scotland as a whole. The firm already has a diverse range of forest product operations in the UK, the Republic of Ireland and Estonia.

The development will be among the largest biomass renewable energy plants in the UK, but will not require pylons or any other new grid infrastructure. It will reduce carbon emissions by 170,000 tonnes per year.

Wood supplies will include a high volume of lodgepole pine which will be combusted in the Combined Heat and Power plant (CHP) and the emerging steam condensed to drive an electrical generator. This will feed power to the National Grid at the maximum level allowed by the connection infrastructure - 5MW.

The residual heat will be used in the manufacture of high-energy wood fuel pellets that will provide 48 MW of thermal energy, displacing 60 million litres of oil per year. At its plant in Northern Ireland Balcas is already the largest UK manufacturer of wood pellets that are marketed under the company's "brites" brand. Brites can be used in everything from large commercial plants to small domestic central heating boilers and stoves.

The HIE board of directors agreed unanimously to approve a £5.5m grant and equity contribution to the scheme which supports the Scottish Executive's target to have 18 per cent of Scotland's energy served from renewable sources by 2010.

Stuart Black, chief executive of HIE Inverness and East Highland said: "This substantial contribution indicates how much we value Balcas Ltd's decision to open their plant in Ross-shire. They have an excellent record in the industry employing over 600 people world-wide.

"Lodgepole pine was heavily planted in the Highlands during the 60s, 70s and 80s but meets a poor market so this presents an excellent purpose for its harvest."

"This is the kind of technologically advanced and environmentally prudent business that fits with the reputation of our region and I look forward to working with the firm over the coming months and years to grow their success in this emerging industry."

Managing Director of Balcas Ltd, Ernest Kidney said: "We are delighted by HIE's support that will enable us to bring the project to fruition in 2008. We look forward to introducing brites to the market in the Highlands. They will provide a new alternative heating fuel with price stability, and at a cost that is less than oil or gas".

Balcas Web site www.balcas.com