Energy Matters

30 May 2012

Heat energy for distilling is largely derived from natural gas, fuel oil or renewable fuels, such as biomass or industry by-products). Around 20% of the industry's energy use is electricity. 

In its wide-reaching Environmental Strategy the industry has committed to improve energy efficiency in production, mitigate greenhouse gas emissions and source more energy in future from non-fossil fuel sources.  The aim is that by 2020, 20% of the industry's energy requirements will be derived from non-fossil fuels, rising to 80% by 2050. 

Although the industry has a long history in taking active steps to improve energy efficiency, the strategy established a formal starting point in the journey to reach the 2020 and 2050 targets. Its progress report shows that in 2008, the baseline year for the strategy, 3% of the industry's primary energy was from non-fossil fuel.

To deliver its non-fossil fuel targets, the industry is investing significant sums in renewable energy. A number of these projects seek to generate renewable energy from distillery by-products. Since 2008, over £170m has been invested at five sites alone in renewable energy schemes such as large-scale anaerobic digestion (AD), biomass and renewable combined heat and power (CHP). Those projects and other investments will help the industry meet the 2020 target.

Distillers recover and re-use heat as much as possible. But there will always remain a quantity of low-grade rejected heat that might be of use to third-parties. Where synergies exist with neighbouring businesses or facilities, Scotch Whisky distilleries have successfully offered that heat to their neighbours. This is the case at Bowmore Distillery on Islay whose low grade heat warms the local swimming pool, North British Distillery which heats Tynecastle High School. Diageo's new malt distillery at Roseisle in Moray has also successfully overcome challenges posed by its remote location. It is in sight of an existing maltings which now takes the distillery's cooling water to reduce energy demand for the steeping process at the maltings.

Many distilleries are located in remote parts of the country, away from the gas grid and rely on fuel oil as their prime energy source.  Distillers might in future be able to access alternative fuels such as biomass, or recycled or waste oils to fire their boilers.  For this to become a long-term reality, supply chain issues such as certainty of supply will need to be resolved.  There remains potential for technological development in the area of alternative renewable fuel supplies and we are aware of a number of initiatives aimed at offering new fuel types. 

The SWA watches the development of these with interest and try to assist such initiatives wherever possible.

 A Complex Policy Landscape

Aside from the industry's own proactive agenda, distillers face a plethora of complex and overlapping climate change mitigation measures including:

  • Climate Change Levy (CCL) and associated Climate Change Agreements (CCAs)
  • EU Emissions Trading System (EUETS)
  • Carbon Reduction Commitment Energy Efficiency Scheme (CRC)

The SWA has long-called for simplification to reduce regulatory burden and believe that our sector should be covered by a single UKsector-wide climate change agreement.

The Association contributes actively to a broad range of policy discussions with the UK Government whose energy policies and incentive schemes impact on the Scotch Whisky industry.  These include the UK Low Carbon Heat Strategy, and the various financial incentives for renewable energy generation (Renewables Obligation (Scotland), Feed-in-Tariffs and Renewable Heat Incentive).

Climate Change Agreements - Continual Improvement in Energy Efficiency

The Scotch Whisky Association manages the spirits industry's Climate Change Agreement (CCA) on behalf of the whole spirits sector, including gin and vodka. 

These agreements were set up in 2001 and are binding agreements with the UK's Department of Energy and Climate Change.  The industry has achieved a 25% energy efficiency improvement since 1999 and the sector has consistently exceeded all stretching 'milestone' targets set by the Government.

A new CCA scheme is due to begin in 2013 and we are working with DECC to help shape a workable and simpler future scheme and ensure a smooth transition between the existing and new schemes.