Port Ellen, Scotland

Islay, as with other island communities in Scotland, faces multiple challenges in terms of its physical geography, building stock and infrastructure. It also has unique opportunities to develop an innovative and integrated local energy system that can deliver sustainable and inclusive economic growth.

The Scottish Government, Highlands and Islands Enterprise, and Argyll and Bute Council are working to promote a collective approach to developing Islay’s local energy system. This approach looks at how energy is generated, supplied and consumed on Islay and the surrounding islands of Jura and Colonsay, and how this can benefit the local community. This work was supported by Local Energy Scotland through to March 2021.

What is a local energy system?

Local energy systems link the supply and demand of energy services within a defined area across electricity, heat and transport, recognising the effect each area has on others. The creation of ‘innovative local energy systems’ is one of the six strategic priorities identified in Scotland’s Energy Strategy, the Scottish Government’s vision for the future of energy in Scotland. It recognises that energy systems that are designed and developed in line with local needs and aspirations can create secure and sustainable low carbon economies.

Why Islay?

Islay and its neighbouring islands face many energy related challenges. These include:

  • a constrained electricity supply network
  • high fuel and transport costs
  • clustering of energy intensive users
  • fuel-consumption is mostly fossil-based
  • low local energy generation
  • an undeveloped tidal and offshore wind resource.

Taking a holistic and collaborative cross-sector approach to these challenges will benefit both the local community and industry.


The existing grid currently has limited capacity to take on new generation, and the grid infrastructure on, and leading to the islands will need significant reinforcement. Electrical demand is dominated by the distillery sector.


Producing heat is the main energy requirement for distillery activities. Oil is also the main fuel used in heating many island homes and businesses. Reducing the reliance on fossil fuels will require changing to alternative fuel and electric heating solutions.


Ferry and air connections to the islands support movement of goods and materials for the distilleries, tourism and community-based services. There are opportunities to consider how these and local transport services can be supported by future changes to the local energy system.

What’s happened so far?

During 2020 we talked with individual, community, public and private stakeholders who either live on Islay or provide services and operate businesses based in Islay. These discussions confirmed the importance of promoting a joined up and integrated approach to decisions about how energy is generated, supplied and consumed.

We appointed the Wood Group to carry out a high-level options appraisal in the autumn of 2020 to help inform the discussion on what the future energy system might look like. We held a stakeholder event on Wednesday 24 February 2021.

Developing Islay’s Energy System Stakeholder Meeting – 24 February 2021

The event explored many of the opportunities and challenges that exist in developing the future energy system. The event considered how energy is generated, supplied, and used on Islay and the surrounding islands of Jura and Colonsay.

Highlights from the event are now available to watch on our YouTube channel.

You can also view and download some of the above presentations and a summary of the group discussions:

Islay Energy Systems Options Appraisal

The options appraisal provides an overview of current energy requirements on Islay and explores opportunities for change. These opportunities are set out in four high-level scenarios that describe what is technically possible and identify many of the challenges and restrictions that may exist. Each scenario shows ways in which power, heat and transport energy needs could be met as part of a ‘whole systems’ approach.

The four high-level scenarios do not seek to provide a single answer to Islay’s future energy system, nor limit the list of options that can be explored. Rather the scenarios simply provide ideas for what is possible and identify many of the actions that will be required. It is intended that the study will help inform individual, community, public and private stakeholders as they consider the future development of energy systems on Islay (and on surrounding islands) and inform future public and private investment.

Is funding available?

Argyll and Bute Council Rural Growth Deal will bring funding from the UK and Scottish Governments to support investment in the region. Heads of Terms were signed on 11 February 2021 and set out the general areas of investment. The deal includes the ‘Creating a Low Carbon Economy for Islay’ project. The proposed project seeks to support the creation of local energy systems that will support the development of a pathway to net zero emissions.

It is expected to take 1-2 years to complete the development of business cases that will set out the detail of projects for delivery for approval by both Governments. Further information on the proposed project can be found in the Rural Growth Deal.

Initiatives that are identified may be eligible for funding through the following:

More information

For more information, contact Ross Jones.