A new business manufacturing wood pellets is mulling a multimillion-pound investment to create a combined heat and power plant (CHP) in Banffshire.
Puffin Pellets revealed the move yesterday as Scottish Climate Change Minister Stewart Stevenson officially opened its pellet site at the Boyndie ’Drome, near Banff.
Managing director Bryan Harper said the £8-10million wood-fired CHP would provide all the electricity needed to run its £2million pellet manufacturing facility – and possibly power nearby businesses. A planning application is being prepared.
Mr Harper said: “The only thing that does not come from renewable energy here is the electricity. A combined heat and power plant would resolve that.
“The heat we use to dry the wood needed for the pellets already comes from timber.”
Puffin, a joint venture between Insch-based Mr Harper and former Inverurie paper mill owner Thomas Tait, has created nine jobs, with the possibility of another three by the year-end as production increases.
The business aims to capitalise on the growing demand for biomass to reduce carbon dioxide emissions.
The pellet facility will, once fully operational, equal the size of Scotland’s biggest existing plant at Scone, near Perth, with an annual output of 25-26,000 tonnes, enough fuel to heat 5,000 homes.
Both supply wood pellets to fire alongside coal in power stations, but Puffin wants to break into the domestic market, supplying houses and businesses.
Mr Tait said while considerable focus was placed on renewable electricity there, so far, appeared little interest in using green sources to generate heat, which in itself accounts for 60% of all energy use. “If governments are to achieve their renewable energy targets then they are going to have to do it through wood.”
He backed calls for increased grant assistance to stimulate the domestic demand for biomass boilers that use pellets. Homeowners and businesses can currently qualify for 30% of the costs of switching from oil and gas to wood fuel, but grants are limited to £4,000. The boilers needed to burn wood are also expensive at between £22-£25,000, although cheaper versions at around £10,000 have been developed and about to enter the market.
Mr Tait said Sweden had taken the lead in getting homeowners and businesses to switch to more environmentally-friendly wood heating through extra taxes on oil and gas as well as imposing VAT at 21% on the fossil fuels. The cash gathered in was, however, ring-fenced and put back into helping fund house boiler conversions.
“People in Sweden putting in the wood boilers avoid the taxes and get the benefit of a much cheaper fuel,” he said.
Mr Harper is already heavily involved in wood fuel, supplying timber to the Drax power station in England.
He has been hauling timber for 30 years, but has diversified into providing wood-chips for the MDF wood board manufacturing plant at Cowie, near Stirling. He also recycles used wood and has a facility at Boyndie which now collects material from north-east council sites for onward shipping to Drax.
Puffin received £380,000 in support from the Scottish Government.
Mr Stevenson congratulated the pair on what he saw as a magnificent project for the north-east and which would help the government meet its ambitious renewable energy targets.