Despite its modest size, there are hopes that the £500,000 Rural Energy Challenge Fund will have a significant impact on local economies. Typical projects the fund could support include solar and storage systems to provide heat and power for dairy farm operations, or to help a group of tourism businesses join forces to reduce energy costs during the summer peak season. The launch of the fund, part of the Community & Renewable Energy Scheme (CARES) administered for the Scottish Government by Local Energy Scotland, comes at a time of increasing focus on the potential for communities to have much greater involvement in energy production. After decades of being dominated by large, fossil-fuel power stations, the nature of energy generation in the UK is changing, with many more, smaller, decentralised and low-carbon projects sited closer to demand. A smarter and more flexible energy system is also rapidly developing helped by progress in areas such as battery storage. Against that backdrop, the Scottish Government’s draft energy strategy published in January has lofty ambitions for more local generation. It includes a target of at least 1 gigawatt (GW) of community and locally-owned energy generation by 2020, and 2GW by 2030. Scotland’s business, innovation and energy minister Paul Wheelhouse argues the new fund – restricted to small enterprises including landowners, farmers, colleges or social enterprises in rural areas with fewer than 3,000 people – ties in with the Scottish Government’s aims of giving local communities ownership and greater control of energy production. The CARES scheme was set up by the Scottish Government to encourage local and community ownership of renewable energy across Scotland. A loan fund established in 2011 provides financial help for projects which offer significant community engagement and benefit. A previous “challenge” funding scheme under CARES, the Local Energy Challenge Fund, was launched in 2014 and currently supports a number of large-scale low carbon demonstrator projects. Projects backed include Edinburgh and East Lothian-based Eastheat, set up to develop and implement local solutions to addressing fuel poverty designed around the use of innovative heat batteries. Led by Macmerry-based battery technology firm Sunamp, partners in the project include the Castle Rock Edinvar Housing Association and East Lothian Housing Association. Some 1,000 solar panels are being installed on properties and hundreds of homes are being fitted with batteries designed to store excess electricity as heat which can later deliver hot water on demand.