Aberdeen Heat & Power Ltd
As a local authority, Aberdeen City Council is responsible for 4,500 flats in 59 multi storey blocks across the city. In 1999 the council adopted its Affordable Warmth Strategy and carried out a survey of their housing stock which showed that a large number of tenants lived in ‘fuel poverty’* due to high energy bills resulting from low energy efficiency standards.
In response Aberdeen City Council established ‘Aberdeen Heat & Power’ (AH&P) to deliver Combined Heat and Power (CHP) schemes for the city. As a first project AH&P developed a CHP system for four blocks of flats comprising 268 domestic dwellings at Stockethill. Subsequently the company took on 209 flats in Hazlehead, 503 flats in a first phase at Seaton and an array of community buildings that were attached to the system. In later projects the Seaton system has grown to over 1,000 flats in 14 blocks and the total number of public buildings has been extended to 13, including community sports and leisure facilities and Aberdeen City’s Town House.
According to former council leader Barney Crockett “Aberdeen Heat and Power is a true success story in every sense. The company’s combined heat and power scheme has taken hundreds of people in Aberdeen out of fuel poverty by providing affordable heat in many homes, and simultaneously making significant cuts to the city’s carbon output.”
Legal structure & set-up
In 2002 Aberdeen Heat & Power Ltd was incorporated as a company limited by guarantee. The company operates as not-for-profit and is governed by a board of ten directors that is open to tenants and includes two mandatory council representatives.
In 2013 AH&P set up District Energy Aberdeen Ltd (DEAL) as a subsidiary, which was necessary to connect commercial customers.
The total cost for the initial development at Stockethill was £1.6 million (€2 million). £730,000 (€910,000) of the required capital cost came from the Community Energy Programme, a UK government scheme that ran for two years and closed in 2007. The Community Energy Programme is a good example of how funding opportunities are in constant flux and often only run for relatively short periods of time. As a result it was not possible to replicate the financing of Stockethill in schemes that followed. Instead these have attracted an array of different funding through schemes including Carbon Emissions Reduction Target (CERT), Community Energy Saving Programme (CESP) and Energy Companies Obligation (ECO).
In order to navigate through the ever changing funding climate, Aberdeen City Council leads on new funding applications and the prioritisation of projects. At the same time AH&P hopes to diversify its funding streams by connecting to commercial customers via DEAL, feeding profit back into AH&P and helping to sustain affordable heat prices for domestic customers.
AH&P charges Aberdeen City Council for connection of every household. The council in turn charges households at a fixed rate, which is set by AH&P and reviewed annually. The aim is to provide affordable warmth and alleviate fuel poverty. In that regard household savings are estimated at 25-40%, keeping in mind that many households previously under-heated their homes.
With connection charges paid by the city council, AH&P would be able to sustain itself in terms of operation and maintenance. However, without further access to capital funding, expansion and a planned move away from gas to non-fossil fuel sources might be put in jeopardy.
- Changing and short-lived opportunities for capital funding
- Drastic reduction of fuel poverty through 50% reduction of fuel cost
- 45% reduction of carbon emissions in buildings supplied by AH&P
* Households are in ‘fuel poverty’ when 10% or more of household income is spent on energy bills.
Size of Community
Type of Energy Project
Stage of Development
Aberdeen Heat and Power is a true success story in every sense. The company’s combined heat and power scheme has taken hundreds of people in Aberdeen out of fuel poverty by providing affordable heat in many homes, and simultaneously making significant cuts to the city’s carbon output.
Cllr Barney Crockett - Former Leader of Aberdeen City Council
Survey of flats across city
Aberdeen City Council adopts Affordable Warmth Strategy
Incorporation of Aberdeen Heat & Power Company Ltd
Stand alone blocks
City Centre link
District Energy Aberdeen is incorporated
Tillydrone / Cairncry Projects