Mid-term review of REIF: final report for Scottish Enterprise

The report presents the findings of the mid-term review of the Renewable Energy Investment Fund (REIF). REIF is a £103 million fund to support projects that deliver energy from a renewable source, reduce the cost of renewable energy, or provide key solutions for renewable energy generation. REIF was intended to support four types of investment: marine, (wave and tidal); district heating schemes from renewables; community energy projects; and ‘other’ - projects that do not fall into the other categories but which met the Fund’s objectives.

The methodology consisted of both desk and primary research, and covered the period December 2012 to the end of March 2016.Desk research involved an analysis of monitoring data and reports and papers. Primary research involved consultations with 25 stakeholders, and interviews with the majority (20 out of 25) of projects that had been funded through REIF. A number of renewable energy projects that are not beneficiaries of REIF investment were also consulted.

The research found that despite challenges, REIF’s performance has been positive. The initial objectives were: supporting between 20 and 40 investment transactions; investing £103 million; and achieving leverage investment of between £300 and £400 million by the end of March 2015 later extended by a year. There was then a further extension to March 2017 due to slower than anticipated uptake of funding. By the end of March 2016, a total of 30 investments (£52.3 million) had been made in 28 projects. This represents around half of the £103 million originally anticipated. This was mainly because marine energy, especially wave, had proved to be further away from the market than anticipated. Investments were made mainly in the marine sector (£38 million in 12 investments), community energy (£10 million, 15 investments) and ‘other’ projects (£4.3 million, 3 investments). There were no investments in district heating. To the end of March 2016, £284,468 had been returned from REIF’s investments (0.5% of the £52.3 million invested). Of this, the majority (80%) was from community projects, with the balance from ‘other’ projects. No income had been received from marine projects, although this was not unexpected given the age of the investments. A direct net GVA of £4.28 million has been estimated to date across all projects, with a further estimated £3.85 million of indirect GVA and £0.855 million of induced GVA. Further impacts to arise from support to date include the creation of 43 jobs and safeguarding of 46. The project also generated 6,300 MWh, and saved 2,000 tonnes of CO2. Consultations with stakeholders found that there was strong enthusiasm for, and commitment to, a continuation of REIF across the spectrum of interested parties in the sector. The Fund and its team were regarded as flexible, proactive and vital to the success of the renewables sector.

The report makes a number of recommendations. It finds that there is ‘considerable merit’ in the retention of REIF as an investment fund, with a continued focus on marine and community energy projects. However, it is suggested that governance issues should be addressed, and there is a need for greater clarification of the distinction between REIF as a project and REIF as an investment fund. It also recommends that: the barriers to realising supply chains benefits are addressed; that more follow up research on the community impacts arising from REIF funded projects is captured and celebrated; that the future objectives of the fund should be more clearly output and impact focused (including measures such as turnover, job creation, GVA and supply chain impacts) and that new opportunities brought in by such measures as the Power Purchase Agreements should be explored.