Work has begun on Scotland’s first community urban hydro project, in Aberdeen, at a site which used to be the location of a paper mill. The Donside hydro plant will use water from the River Don in order to produce electricity. Electricity generated by the facility will be sold to the national grid in order to raise funds each year for the local community. One source said the cost of the project is £1.2 million. Aberdeen Community Energy (ACE) is the developer.
The organization will also provide opportunities for investors in the community project, in order to generate funds for the later phases of construction work. ACE has said it expects about a 7% annual return rate for its Community Share Offer.
“Now that the construction phase is underway, it’s really important that we continue to build our audience to attract supporters and investors to make the Community Share Offer a success. The more we can raise through our share offer, the more income from the project we can return to the community over the lifetime of the scheme,” explained Sinclair Laing, founder director of Aberdeen Community Energy. The Community Share Offer is expected to be launched in the beginning of July, and completion of the core construction in October 2016.
Paul Wheelhouse, the Scottish Government’s Minister for Business, Innovation and Energy, said that once the hydro plant is operational, it could provide funds for local community projects for over 20 years.
There may be a tendency among some to wrongly believe that clean, renewable power is too costly to develop. In the case of a community power project like this one, clean electricity is not only useful in practical terms, but it could generate considerable revenue to be used for community enhancements. This project might also inspire other urban centers to consider developing their own urban hydro projects.