Scottish Industrial Energy Transformation Fund: guidance

The next call for the applications for the Scottish Industrial Energy Transformation Fund (SIETF) is due to open at the end of summer 2022. The SIETF provides grant funding to reduce energy costs and emissions through increased energy efficiency.

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Points to consider before applying:

  • applicants must meet the eligibility criteria set out in the guidance and demonstrate on the application form that the project would not go ahead in its current form without SIETF funding
  • if a business carries out work under various SIC codes (inc Manufacturing codes) but their official SIC isn't eligible, as long as the lead applicant provides evidence to The Scottish Government before starting their application that the main activities taking place on the site match one of the eligible SIC codes
  • SIETF would be open to consider cases where there are plans to relocate an industrial production line (or lines) and as part of this relocation in Scotland, the applicant chooses to upgrade heat or energy producing plant that are part of the industrial process. However, for SIETF to consider, the specific elements which can be identified as energy efficiency or emission saving measures must be clearly presented as additional to a wider package of measures that constitute the overall relocation (or consolidation) investment.

Multiple projects:

  • the lead applicant may have multiple projects within a single application as long as all the projects are taking place at the same site and are all eligible. If the word count allocation is insufficient, an appendix may be used to expand.

Eligibility - main points:

  • the fund will not support upgrade systems in buildings (lighting or space heating and cooling) which is not integral to the industrial process. The exception to this is applications from data centres. Energy efficiency measures in transport are also out of scope.
  • funding cannot be used to repurpose a manufacturing site to accommodate a new industrial process/product.
  • fuels eligible to switch to for a decarbonisation project include:
    • hydrogen
    • biomass (if justified)
    • biogas (excluding oil and LPG)
    • electricity
    • gas grid (if justified)
  • the feasibility/FEED study competition doesn’t fund site wide energy modelling or a review of best available technology. The applicant must know the particular piece of equipment they want to deploy and the study allows them to assess the technical and economic viability of deploying that piece of kit.
  • renewable electricity generation is out of scope. Funding can help to install new process equipment that will run on the renewable electricity but not the actual electricity source.
  • funding cannot be used to improve the carbon impact of a manufacturing facility not yet (or in the process of being) built. The site must already be operational and producing emissions. 

Eligible costs:

  • when replacing a gas boiler with a hydrogen boiler, the full cost of the boiler would not be eligible. The boilers sole purpose is to generate heat and steam for the manufacturing process rather than reducing energy demand or carbon emissions. Therefore, the eligible costs would be the difference in price between a like for like replacement (gas boiler) and the new hydrogen boiler. This is the decarbonisation improvement.

Application form:

  • regarding the “reference case” in the application form,  an applicant can describe what would happen without SIETF support, then what additional benefits (improved energy efficiency and/or lower emissions) the project will demonstrate if in receipt of SIETF funding. An applicant can make a case that a project would proceed with equipment that is more energy or carbon efficient if SIETF support is given, otherwise it will proceed with less efficient equipment. Equipment – proposed for installation or used in a reference case – could be new, previously used, or reconditioned. However it is important to consider guarantees/warranties and not to overstate the lifetime savings of projects using second hand equipment, and note that the project benefit calculator asks for expected number of years of operation for equipment/ deployed technology.



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