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Glenmuckloch Energy Park - progress update

• Following the official opening of the site in July 2013, Buccleuch have collaboratively

worked with key stakeholders including Hargreaves, D&G Council and Scottish Government to: Finalise the £8.15m position with the bondholder Reach contractual agreement with the key stakeholders to commence mining and restoration work Provide an appropriate planning application that was timely approved.

• We now have an open cast site which has a well-progressed

restoration programme, and is: Providing employment for over 50 well-paid site jobs Producing over 10,000 tonnes of coal per month Securing 3 years' work with the potential for this to be a decade (dependent upon coal prices and further geological investigations).

Glenmuckloch has been delivered by all parties working together and applying innovative and creative thinking

Glenmuckloch Energy Park - wind

• To ensure the longer term prospects of Glenmuckloch, we are well progressed with

the following renewable energy opportunities:

• Community

wind turbines

D&G have granted planning permission for up to two turbines NATSradar mitigation plan agreed and £40k payment made Grid connection capacity booked for 200kW despite various capacity issues Funding already raised for the first turbine Likely to be built and generating power in Summer 2015 - providing benefits to the local community and business skills to the Sanquhar Academy's pupils for the next 20+ years.

• 8 X commercial

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D&G Council have been informed

• f the development

and its financial returns, and are

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Connection agreement received and accelerated grid connection date being explored with Scottish Power. The project timetable and installed capacity will be defined by the grid connection parameters We are anticipating submitting the planning application and full environmental statement in Q12015.

Renewable energy that will provide real benefit to the local community and council through our unique structure

Glenmuckloch Energy Park - 40MW to 70MW Pump Storage Hydro (PSH)

• The intermittency
• f wind energy leads us to explore on-demand renewable

resources

• The unique characteristics of an open cast site are well suited to providing a cost

effective PSHscheme

• We have undertaken a feasibility study on the PSHscheme which is very promising,

and are now going to undertake conceptual design, construction costing and

• perating regime studies
• A 40MW to 70MW PSHscheme would provide:
• n-demand electricity

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• help balance the grid; and
• ffer a demand for constrained generation

A PSHscheme would be akin to a battery resource

• The proposed scheme will be a collaboration

between Buccleuch, 2020 Renewables and Hargreaves - who have already been working together successfully on the Glenmuckloch site

• This will generate continued earth moving and civil engineering employment

for several years to come during the £50m+ build out, and then further and continued employment to operate and maintain the scheme over its 40+ years' economic life

A unique solution to address the intermittency of wind and grid constraints which can be

cost effectively built at Glenmuckloch - and also offer further employment

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Glenmuckloch Energy Park - consenting and subsidies

• Application to the Scottish Government Consents Unit for the generating

equipment, as the earthworks will be included in the restoration plan

• The decision to proceed with a PSHscheme is time important

as there is earth- moving plant and equipment

• n site that will imminently

require revised instructions to build a revised restoration and earthworks system that will incorporate a PSHscheme

• The subsidy scheme also needs to be addressed if a PSHresource is to attract the

necessary investment. Our ongoing feasibility study will give an indication of the incentive/compensation revenue gap

• To date, the capital cost of a P5Hscheme has always been the Achilles' heel:

Glenmuckloch PSHis a favourable proposition, however, as its additional coal reserves will be extracted as part of the PSHproject and therefore materially reduce the build cost This offers a cost effective and value for money PSHscheme that can be made viable

• The establishment
• f this PSHscheme and subsidy regime could potentially

act as a blueprint solution at other open cast sites - providing on-demand renewable energy and a means to restore.

The innovative and creative thinking we all demonstrated at the start of this journey will again be required to build-out a PSH scheme

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North Sanquhar Moor wind project - introduction

• 140 turbines - 400MW - is a significant contribution

to the Scottish Government's renewable energy ambitions

• A high wind speed development that will not encroach on to

the SPA

• Consultees are broadly supportive of large concentrated

developments

• One large site negates the need for circa 20 other smaller sites
• Geographical concentration of effects
• Greater number of turbines, height and maximum yield

"justifies" the locally significant effects

• Probably one of the largest CFDprojects.

Probably one of the last large-scale onshore wind projects to be constructed in Scotland

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North Sanquhar Moor wind project - the benefits

• Economic Benefits
• Glenmuchloch and NSM can be used as a platform for significant economic

development in the upper Nithsdale and M74 corridor

• Job synergy with Glenmuckloch energy park for civil engineering, general

construction, equipment and maintenance

• Apprenticeship

programmes to encourage employment in conventional and renewable power generation and trading 300 to 400 construction jobs - 20 to 30 operational jobs.

• Environmental

and consenting benefits

Deliver significant habitat management resource (both on and off the SPA)to allow peatland and heather restoration and vermin control Improve status of SPAthrough active management Coordinated approach to aviation (NATS,Glasgow Airport, MoD) Coordinated approach to grid capacity upgrades Industry leading energy park.

• Community

Benefits

£5000/MW

• £2m/year - £50m over 25 years

Opportunities for council to relieve energy poverty in low income households locally Enterprise area with integrated community led initiatives for both Leadhills and Wanlochhead.

With a partnership approach, the economic, environmental and community benefits are significant and industry leading

Scottish Government help and support

• Consenting process for Glenmuckloch

PSH and NSM

We need a dedicated point person in the civil service to help debottleneck the process. Our suggestion is that Frances Pacitti oversees the process NATSand Glasgow Airport are brought to the table now in order to avoid a 3 to 4 year delay Realistic but informative approach to Environment studies PSHearthworks to be included as part of the restoration plan with generating plant consented via the Section 36 process.

• Grid Connections

Pressure is applied to Scottish Power and National Grid to accelerate the interconnector

• upgrades. Consider the use of specialist power contractors to

build private connections Grid connection delays are the biggest threat to the renewables targets - delivery working group!

• PSH Subsidy / Incentive

Regime

Feasibility study will determine the magnitude of the revenue gap for the PSH

• scheme. We need your support to lobby UK Government/DECC/Ofgem

to realise a workable solution.