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Following two years of planning, Diageo has signed a formal partnership agreement with energy management company, Dalkia, to create the new facility.

Costing approximately £65 million, the facility will integrate sustainable technologies – including anaerobic digestion and biomass conversion – on a commercial scale. It will be the largest single investment in renewable technology by a non-utility company in the UK and is set to reduce annual CO2 emissions at the site by approximately 56,000 tonnes (equivalent to taking 44,000 family cars off the road).

The proposed facility, which is subject to planning approval, will recover 98% of thermal steam and 80% of electrical power at the distillery. Dalkia will construct the facility over the next two years and it will then transfer to Diageo under a finance lease, while continuing to be managed by Dalkia.

Bryan Donaghey, Managing Director, Diageo Scotland, said:
"This will be a showcase bioenergy facility which harnesses a variety of green technologies in a project of an unprecedented scale.

"It is without question the right way forward in terms of environmental benefits and secures the long-term sustainability of our operation, moving the site away from reliance on fossil fuels."

The bioenergy facility will generate renewable energy from 'spent wash' – a mixture of wheat, malted barley, yeast and water - produced during distillation.  The spent wash is separated into liquid and dried solids. The liquid is then converted, via anaerobic digestion, into biogas and the dried solids form a biomass fuel source.

Around 90,000 tonnes of co-products, which would have required transport off-site by road, will be turned into bioenergy in the form of electricity and steam for use at the distillery. The facility will also recover almost a third of the site's water requirements.
 
Campbell Gemmell, CEO of the Scottish Environment Protection Agency (SEPA), commented:
"SEPA welcomes the use by industry of efficient, sustainable energy sources. We are very supportive of new and developing technologies that can help protect Scotland's environment and make a meaningful contribution to tackling climate change. Diageo is to be commended for its investment in bioenergy."

Frédéric Pelège, CEO of Dalkia plc added:
"This pioneering scheme demonstrates the effective use of bioenergy and highlights our shared commitment to efficient sustainable energy for industry. It will deliver real environmental benefits."

The bioenergy project is in addition to a £100 million programme of investment currently being undertaken by Diageo in Scotland. This includes a new distillery at Roseisle in Morayshire which will also feature cutting edge sustainable technology, together with a £40 million expansion at Cameronbridge Distillery due for completion in spring 2010.

Diageo, and partner Dalkia, have been working closely with local and national stakeholders, as well as consulting widely with representatives of the local community, to ensure the full potential of the project is realised.

Cameronbridge currently employs around 100 people and the new bioenergy facility is expected to create up to 20 additional jobs.