Shock as the Highland Council pulls plug on Caithness Heat and Power scheme

The building beside Pulteney Distillery which was to be CHaP's powerhouse.

THE Highland Council has pulled the plug on the controversial Caithness Heat and Power scheme and customers will now have to switch back to normal domestic heating systems.

A total of 242 householders in Wick, who receive their heat and hot water from CHaP, have learned that the council has failed to find a private operator to take over the troubled district heating system, which has cost the taxpayer more than £13 million.

In a letter hand-delivered to their homes today (Friday), CHaP company secretary Michelle Morris, assistant chief executive of the Highland Council, advised customers that the local authority and the directors of CHAP have been striving to find an operator from the private sector to take over the district heating system The council was initially involved in discussions with a company called Clearpower. When the council was not able to conclude an agreement, it entered into discussions with the reserve preferred bidder, Ignis.

Ms Morris wrote: "Regrettably, Ignis have failed to achieve the conditions required for concluding an agreement and the council, supported by the directors of CHAP, have agreed to terminate the procurement process and not to award a contract.

"Continuing to operate the existing district heating system is not commercially viable and therefore the council has decided that the way forward must be for houses to revert to the reinstatement of domestic heating and hot water systems.

"For council houses, tenants can be assured that these systems will comply with the Scottish Housing Quality Standard and that the work will form part of our Housing Capital Programme.

"For tenants of other organisations (Cairn, Albyn, Pentland) the council will now initiate discussions with your landlord about how the reinstatement work will go forward.

"For private owners the council will contact you individually to understand your circumstances."

She added: "Please be assured the council and the directors of CHAP have worked tirelessly and done everything possible to attempt to make a success of the CHAP initiative and both are deeply disappointed at the outcome.

"Also be assured we will maintain the current service using the oil boiler until the reinstatements are addressed.

"We will keep you advised of developments and consult with you on how the reinstatement work will affect you."

Councillor Ian Ross, a director of CHaP, described the outcome as a great disappointment.

He said: "Since taking over the company, the council has done everything possible to find a way forward for this project, which, at the outset, promised so much for Wick households.

"Our focus now must be on reinstating domestic heating systems in the homes and giving every help possible to households in terms of coping with the change."

CHaP was set up in 2004 by the council, Inver House Distillers Ltd and Pulteneytown People’s Project, who each had a director on the board of the company.

The aim was to provide renewable energy in an area of fuel poverty via an innovative combined heat and power system at Pulteneytown.

The council took over the running of the company in August 2008, when it was clear the project was not achieving its aims.

Of the 242 households on the district heating system, 158 are council tenants.