Frequently asked questions

Please see questions below and email us if you have any queries you would like answered.



What are the maximum and minimum funding levels?

 Phase 1 can provide funds of up to £25,000. If no funding is required, Phase 1 can provide soft support through advice. Projects will not be considered for Phase 2 unless they have been successfully approved for Phase 1. 

Do we need to have partnerships established for Phase 1?

No, and you can also use Phase 1 funding to help establish these if your project is successful. (See “Section C” of Challenge Fund Guidelines)

Do we need to have feasibility work complete?

Your project needs to be clear enough so the panel can understand your vision and your ability to achieve the vision, but we expect feasibility work will be progressed as part of your Phase 1 work.

Do I just have to register an interest by the 25th of May?

No, you need to fully complete a Phase 1 application form by the 25th of May.  This will allow the panel to understand your project proposal and assess whether it should be progressed to a full Challenge Fund Application (Phase 2). (The Phase 1 application form can be downloaded here)

Only shortlisted Phase 1 projects can be progressed and these will receive handholding and funding to help them develop applications for the Phase 2 application deadline in February 2016. 
Information on how to apply can be found here.

Does my hard copy Phase 1 application have to be received by post before 25th of May?

No - you must submit an electronic copy to by 16:00 on the 25th May. A hard copy must be sent in the post and can be received shortly after this date.

Can an organisation apply for more than 1 project?

Yes, for Phase 1 applications.

Can you confirm if the fund is just for renewables projects as in some places it says supporting the Government’s Renewables targets and other places it just states low carbon?

It doesn’t have to involve renewables but it must be working towards local energy economy. (See “Objectives” on page 9 of the Challenge Fund Guidelines)

Can you confirm if the fund has to involve a local community at its core?

The fund is open to a wide range of applicants as listed in the guidance notes. (See “Who can apply for Phase 1 development funding?” on page 11 of the Challenge Fund Guidelines

Phase 2 applications need to include at least two partners and the guidance does not stipulate that this needs to be a local community.  However, the Scottish Government think applications will be strengthened where it’s clear there will be community input and ownership.

Is gas CHP eligible for funding?

It would be eligible for funding. Applicants will be appraised on the demonstration quality of their project and how these would meet the Scottish Government’s vision for a Local Energy Economy as outlined in the Community Energy Policy Statement. (See

 Can Universities use a different State Aid declaration if they are not subject to de minimis?

State Aid tests are applied to the project and not the organisation.  Local Energy Scotland has provided an additional De Minimis declaration within the application form to allow applicants to state that they do not believe their project should be subject to State Aid and to confirm they have applied the four state aid tests to the project. As well as our own State Aid guidance, there is helpful information on the Scottish Government website.

Can we include any appendices with the application, for example a process diagram that illustrates how a prospective Phase 1 or Phase 2 might come together or an extract from a feasibility study?

There is a section within the application form that allows existing feasibility studies or evidence you want to reference to be summarised.  At phase 1 the panel will only review your application form and not any supporting information so its important to capture details within the application form.  We may contact applicants if further information is needed to complete the assessment of the Phase 1 application.

We expect to receive funding from another grant fund (e.g. Coastal Communities Fund). Is this an issue when it comes to match-funding this project from two different grant funds?

If both schemes class as State Aid (as this one does), funding can only be matched up the maximum aid intensity with the specific State Aid General Block Exemption that is being applied. Even if the other grant fund is delivered under a different State Aid exemption to the Challenge Fund, you will not be able to use the same eligible costs for both funds.

What this means is that you cannot double fund the project using the same base costs. What you can do is to apply for one part of your project costs under the other grant fund (e.g. building repairs), and for funding to cover a different part of your project under the Challenge Fund (e.g. a biomass boiler) without any issues so long as you clearly identify the separate eligible costs.

 When will the Phase 2 application form be available?

The Phase 2 application form and annex templates will be made available to all successful Phase 1 applicants. As covered in the guidance, you must be accepted into Phase 1 in order to apply for Phase 2.

The Phase 2 application requires detailed information about your project and includes templates for:

  1. Detailed workplan
  2. Risk assessment
  3. Detailed project budget
  4. State Aid intensity calculation

You will be expected to provide technical specifications for the equipment you plan to install, proof of competitive tender processes for any goods over £10,000, and a calculation of fuel displacement and GHG emissions savings.

I received Phase 1 feasibility support in the Round 1 Local Energy Challenge Fund 2014/15, do I need to re-apply?

 Yes. To be considered for any eventual Phase 2 of the current Local Energy Challenge Fund, projects must have successfully applied for and received Round 2 feasibility support, open to applications until 25 May 2015.

Can the NHS be a project partner?

Yes, the NHS can be a project partner in Local Energy Challenge Fund projects.

Can Scottish Enterprise be a project partner?

No, Scottish Enterprise (and other Scottish Government bodies) cannot be partners in Local Energy Challenge Fund projects. They may offer projects support through normal activities and may provide projects with a letter of support to confirm this.

Can project partners be based outside Scotland?

Yes, project partners can be based outside Scotland, but the lead applicant must be registered in the UK and based in Scotland.

If phase 2 funding (2016 - 2018) is confirmed by the Scottish Government what is the level of funding that you expect to award to each project?

We hope to be in a position to be able to award funds of between £500,000 and £6m per project in phase 2 of the scheme.

Who is on the decision-making panel?

You can download a list of the organisations represented on the Local Energy Challenge Fund external funding panel here