Mr Russell, whose visit to the Caithness Heat and Power (CHaP) development at Pulteney Distillery was part of a fact-finding trip to the Far North, felt the system has huge potential and could be used in many other places in Scotland.

"I will be talking to the Scottish Executive about this and seeing what we can do about it," he stated after getting a tour of the site.

The MSP heard that when the scheme is completed it will reduce the cost of hot water and central heating in around 500 council-owned homes in Pulteneytown and is also expected to play a role in cutting fuel bills at Caithness General Hospital, Pulteney House and the Assembly Rooms.

The system currently uses excess heat from the distillery and a back-up of light fuel to provide energy to around 170 council houses and 100 other homes but the power source is due to be switched to an environmentally-friendly wood-burning plant later this year.

"I have been enormously impressed by what I have seen here. It is an exciting project and one which will provide an important service to the people of Wick. I think there are big lessons to be learned from it," said Mr Russell.

"Caithness Heat and Power say the new system will have many benefits, including reducing the cost of energy in 270 homes by up to £20 a week. The fact that it could also supply heat and power to Caithness General Hospital and Pulteney old folk's home makes this a model district heating scheme. I hope it will inspire co-operative action in many other towns around Scotland."

Earlier, Mr Russell was shown round the plant by CHaP project manager Peter Creasey and chairman Councillor Graeme Smith, accompanied by Dr Bob McIntosh, a director of the Forestry Commission in Scotland, as well as representatives from the distillery and various bodies including Scottish Natural Heritage and the Scottish Environment Protection Agency.

The minister was told how the scheme came about and how it operates. He was shown the silo where the wood chip will be stored before it is transferred by crane to the drying plant where air is forced through to dry the material. It then goes to the gasifier where it is heated to produce a gas which is cooled and cleaned before being fed into a generator to make electricity.

Mr Russell heard that the plant will require 30,000 tons of wood chip a year when operational. At present, the county could supply its needs for 25 years although that figure could increase as replacement trees are grown.

Mr Smith explained that last year the Pulteney Distillery used 750,000 litres of oil although with increased production that figure could go up to one million litres. Around 800,000 litres of fuel is used at the hospital so almost two million litres of fuel could be saved between the distillery and the hospital by using the new system, cutting their carbon fossil-fuel footprint by 15,000 tons a year.

During his trip yesterday, Mr Russell also announced that a £3 million funding package would be provided to create woodlands to help tackle climate change.

"I'm pleased to be able to announce support for woodland creation at this time," he said.

"It should help ease the uncertainty for forestry and biomass businesses who need to urgently begin preparations for winter planting.

"This one-off measure will assist the creation of around 2000 hectares of woodland to help tackle the impact of climate change. Successful proposals for woodland planting will take place this winter following the required design, consultation and approval process.

"By inviting applications now, forestry and biomass growers will have enough time to carry out all the necessary planning and consultation to allow planting this coming winter and spring."

Mr Smith was pleased that the minister visited the CHaP site.

"It is further recognition that we are the frontrunner in an exciting technology which could be rolled out across Scotland if people are prepared to grasp the nettle," he said.

g.calder@nosn.co.uk

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