The Scottish Government has announced a £2.5 million fund for district heating schemes across Scotland.

The move comes in an effort to help cut energy bills, reduce carbon emissions and help the nation meet its target of generating 11% of heat from renewable sources by 2020.

Figures from the Energy Saving Trust showed Scotland beat its 3.5% target last year, generating around 3.8% of heat from renewables.

The scheme, open to local authorities, housing associations, small to medium sized businesses and energy services firms, was created to help fund district heating schemes. Borrowing commercially to fund these schemes can be very difficult and expensive.

Alan Caldwell from Comrie Development Trust, which was awarded £190,000 last year for its Cultybraggan District Heating project said: “This project illustrates perfectly the Trust’s commitment to a low carbon future, helping us to attract businesses, create jobs and bring wider benefits to our community through our development of the land at Cultybraggan Camp. The availability of this type of loan finance makes such investments achievable.”

Last month DECC announced new proposals on the subsidy for domestic renewable heat in a bid to help households save money on bills, cut carbon and meet the nation’s renewable targets.