Council takes step to ensure city's long term energy needs amid a series of shocks in North Sea Oil market
ABERDEEN City Council (ACC) has agreed to set up its own Energy Services Company (ESCo) in efforts to manage all of the city's energy use, deployment and development.
The ESCo plans to be an "arms length" organisation completely owned by the council but operating outside of its usual structures, and it will also be given a remit to expand and develop the energy-related services of the city in the future.
A working group has been commissioned by the council to see how a proposed ESCo could generate, transmit and distribute energy but also support duties like making energy efficiencies, savings, sustainable energy or the reduction of emissions.
"Additionally, the experience of local authorities in England of setting up companies can provide valuable insight. We hope that Aberdeen City Council will take advantage of this." Craig Salter
ACC leader councillor Jenny Laing, said: "The Energy Services Company will give help ensure the council becomes a leader in the energy market, and will in turn help attract new expertise to the area.
"It will also help to tackle fuel poverty, while at the same time investing in local clean energy, boosting jobs and growth in the local economy."
An ESCo is often a commercial structure, created specifically to deliver a decentralised energy service to an area's development and in the service of the local community.
It was suggested at a council meeting last week that there were a number of options for the structure of the new company, including public sector, private sector, a public private partnership or being made up of two or more organisations.
The plan became a reality when councillors agreed by a majority that an interim informal working group led by a project manager would be set up and enforce a detailed business plan plan for the next three years.
The working group includes energy experts and elected members, including two from the administration and one from opposition, as well as ACC’s legal and finance teams.
"It will also help to tackle fuel poverty, while at the same time investing in local clean energy, boosting jobs and growth in the local economy." Jenny Laing
The costs for the business plan being drawn up are estimated to be in the region of £30,000-£45,000 but the decision still has not been made on whether the proposed ESCo would be a profit organisation or a not-for-profit.
In May this year, ACC approved an energy plan called 'Powering Aberdeen – Aberdeen’s Sustainable Energy Action Plan' which aims to cut carbon emissions in the city by 31 per cent by 2020 and 50 per cent by 2030.
The idea has been welcomed by Citizens Advice Scotland (CAS), which has done extensive research on fuel poverty and sustainability over the last three years.
CAS energy spokesperson Craig Salter told CommonSpace: "We welcome innovation like the Aberdeen ESCo that seeks to deliver better outcomes for energy consumers.
"The proposed areas of focus of the Aberdeen ESCo, including energy efficiency, district heating, and the alleviation of fuel poverty, are issues of significant consumer importance.
"There is substantial evidence, including the recent Consumer Futures Unit report Taking the Temperature, of key factors in designing successful energy efficiency schemes that the Aberdeen ESCo can draw upon.
"Additionally, the experience of local authorities in England of setting up companies can provide valuable insight. We hope that Aberdeen City Council will take advantage of this."
In May this year, ACC approved an energy plan which aims to cut carbon emissions in the city by 31 per cent by 2020 and 50 per cent by 2030.
Additionally the plan proposes that the ESCo will be able to take actions in the areas of waste management, and achieve the alleviation of fuel poverty and sustainable transport.
The council has already approved a number of projects that it claims proves that the new company can be a success, and cites the 'Energy from Waste' plant at Tullos, which it hopes will generate heat and power for future sale, and the Anaerobic Digestion plant as examples.
Energy service company structures have existed in England for a number of years and more Scottish local authorities are examining the potential and benefits of setting up such groups.
Examples in England include an ESCo linked to a community solar energy project, the Bristol Energy Co-operative, which recently raised £2m and acquired an extra 4.6MW solar farm on its own.
Anesco, an ‘energy solutions company’, helped Stratford Community Energy construct two community solar farms and cooperates with Chesterfield Community Energy, advising the ESCo on how to attract investment from members of the public through the purchase of solar bonds.
Picture courtesy of Kay S Geog
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