Grants are available to local partnerships in Scotland to set up low-carbon energy pilot projects in their area.
The maximum single award is £25,000 per project. There is no minimum award threshold and while it is anticipated that some projects may not require development funding, all must submit a fully complete Phase 1 application.
It is anticipated that the Local Energy Challenge Fund panel will award Phase 1 funding/support for 25-30 projects. Only projects that receive Phase 1 support will have the opportunity to develop and submit an application for Phase 2 challenge funding. Phase 2 funding is likely to be awarded to up to 10 projects.
The Scottish Government has established the one-year £20 million Local Energy Challenge Fund to demonstrate the value and benefit of local low carbon energy economies. It has been launched along with the Government’s Community Energy Policy Statement.
The funding is aimed at large-scale local low carbon demonstrator projects which show a local energy economy approach linking local energy generation to local energy use.
The Local Energy Challenge Fund is offered under the Community and Renewable Energy Scheme (CARES) and will act as the forerunner to the community stream of a major six year programme of wider area-based support for low carbon infrastructure in Scotland, aiming to convert proposals into investible propositions through project management and partnership-working.
The purpose of the Local Energy Challenge Fund is to demonstrate the value and benefit of a local low carbon energy economy approach, which could be applied more widely in Scotland. This will support the Scottish Government’s long-term target of reducing greenhouse gas emissions by 42% by 2020, including the following:
- Renewable sources to generate the equivalent of 100% of Scotland's gross annual electricity consumption by 2020. Similarly, a target has been set for renewables sources to provide the equivalent of 11% of Scotland's heat demand by 2020.
- Reducing the local and global environmental impact of Scotland’s consumption and production.
Grants are available on a competitive basis to develop large-scale local low carbon demonstration projects which show a local energy economy approach linking local energy generation to local energy use, including projects that wish to develop innovative distribution and storage solutions, and with an overall aim to create more local value and benefit.
The objectives of the Fund are to demonstrate the potential for additional value and benefit to local communities by:
- Linking local energy demand with local renewable energy generation.
- Overcoming barriers relating to grid capacity issues.
- Applying energy storage and active network management.
- Delivering renewable heat and electricity to local consumers.
- Encouraging local finance solutions.
Potential applicants are advised to contact Local Energy Scotland to ensure that their project meets the eligibility criteria for funding support.
Applications are accepted from organisations such as:
- Community groups.
- Registered charities.
- Community benefit societies.
- Community interest companies.
- Local authorities.
- Registered social landlords.
- Academic institutions.
- Voluntary, community and social enterprise (VCSE) organisations.
- Commercial organisations.
Applications to Phase 1 can be made by a single organisation or by a consortium/partnership with a project lead organisation that receives funds and signs the grant conditions.
Intervention levels of up to 100% are available.
Grants are available to support demonstrator projects which involve innovative solutions to energy production and use.
Examples of eligible projects include the following:
- Demand-side management to maximise local energy production.
- Linking local generation to local district heating scheme.
- Smart electric vehicle charging system linked to local generation.
- Alternative low carbon marine transport.
- Energy storage.
- Hydrogen injection into gas grid or for sustainable transport.
- Consortia approaches to sharing grid costs.
- Local finance to retain local value.
- Local energy master-planning.
- Integrated energy efficiency.
Eligible Phase 1 activities include the following:
- Feasibility studies.
- In-depth research.
- Development of prototype.
- Technical advice.
- Progressing applications for planning, grid connection or other consents.
- Progressing procurement (Phase 2 applicants must show evidence of the tendering process followed for any contracted work).
- Hosting meetings with potential consortia members for Phase 2.
- Hosting meetings between applicant consortia and others necessary to further the development of the project.
- Developing detailed project plans, risk assessments, and detailed budgets (these will be required for Phase 2 applications).
- Formalising a consortium or partnership arrangement.
- Addressing legal issues.
- Addressing State Aid issues and identifying the relevant exemption(s) for Phase 2 applications (this will be required for Phase 2 applications).
- Securing match funding.
- Strategy work and option appraisals.
- Progressing early stages of Local Energy Challenge Fund projects (although projects must demonstrate an exit strategy if funding is not awarded).