Alpha Real buys leasehold land for new renewable energy plant

Alpha Real Trust was expanding its renewable electricity operations on Friday, entering into a purchase agreement on a long leasehold interest in a central Scotland development site at Acham, Perthshire.

It came with full planning consent and a secure grid connection for the installation of a wood-fired Combined Heat and Power (CHP) plant.

The AIM-traded firm said the CHP project targeted increasing growth opportunities identified in the renewable energy sector, which benefited from long-term secure and predictable inflation-linked income streams supported by the Renewable Heat Incentive and Renewable Obligation support mechanisms.

ART said its purchase of the interest in the six hectare site was funded from existing cash reserves. The 6MW project had a potential gross development value of £30m, it said, and on completion the company forecast a running yield in excess of 9%.

"This project represents the potential to benefit from a long term secure and predictable inflation-linked income stream, with the potential for associated capital growth from an infrastructure asset in the UK renewable energy sector," the company's board said in a statement.

"Additional benefits include the associated long term investment in the local economy with the ability to create 15-20 direct, long term jobs, and the creation of a sustainable source of base load power for Loch Lomond and the Trossachs National Park," it added.

Alpha Real Trust said the CHP plant would deploy a well-established advanced gasification process that was already in use at more than 20 sites worldwide. Fuel supply would be provided from established suppliers, in the form of locally-sourced virgin biomass to be chipped and dried onsite.