Aberdeen - Local Champion in Local Government

One of our key funding criteria at the U.S. Golf Association's grants program is whether a "local champion" exists that will go above and beyond to execute a proposal...make it happen. When it comes to building consensus for innovative small-scale energy projects, the need is just as great. The University of Edinburgh has David Somervell, and the Aberdeen City Council has Janice Lyon. Understated but creative and persistant, Janice has leveraged every partnership and grant funding source she can get her hands on to make Aberdeen a model city government in the clean energy space. The council has worked with private utilities to aggressively retrofit homes in the area for energy efficiency - insulation, etc. And they've also built 3 innovative combined heat and power systems to provide heat, electricity, and cooling to city buildings and city-owned residences. Many of the specific financing circumstances here are unique and not necessarily easily transferrable to the US (higher energy prices, lots of government owned buildings), but the importance of a local champion and the flexibility of local governments or municipal utilities to be creative in this space with small, smart projects is definitely something that can be replicated.

Across England, in large part due to the reconstruction after WW II, a very large percentage of housing (at least by US standards) is owned by local governments. Aberdeen has a population of 250,000, living in about 100,000 residences, 23,000 of which are owned by the Council (40,000 were council-owned at one point). These tend to be rented to low income families. There are 59 multi-story apartment buildings, with 45 flats.

In 2002, the city contracted for an energy study that suggested they pursue CHP. Now, over 800 flats in 14 council-owned buildings are served by 3 CHP schemes. The residents pay 50%-75% less than they did previously on their utility bills (average is about 7 pounds a week now I think she said), in part because of the high efficiency of the generation. The scheme also serves government office buildings, a school, and rec centers (pool, ice rink, etc). The different demand profiles of the offices and residences help to balance the demand load and make the CHP more efficient and financially viable.

The city set up a non-profit corporation, Aberdeen Heat and Power (AHP), to finance the schemes. An independent board, appointed by the council, governs AHP (2 tenant members, 2 council members, 6 others). The capital costs for the first CHP unit were financed by a 40% UK government grant and 60% bank borrowing. The second and third units were all bank financed, with a council guarantee on the loan. The plants are built on council land, as are the pipes (looking to go under roads to ensure that in the future). It was labor intensive - in the competitive marketplace, they needed to sign up every tenant individually to take heat and power from AHP. The plant runs on natural gas now, but is able to transfer to biogas produced through gasification or anaerobic digestion.

Janice said that the private utilities haven't resisted or seen Aberdeen Heat and Power as a threat to their business - indeed, they often cooperate witht the city on efficiency measures and provide funding for some of the city's programming (they are mandated to hit certain electricity demand reductions by the UK Gov't). It'll be interesting to see if this holds true if AHP continues to grow. The context is a little different in the UK because there's no natural geographic monopoly for utilities that is eaten into - it's a competitive market already...and AHP is akin competitor in the market I guess - one that works cooperatively with utilities at times to help them meet energy reduction mandates (Janice mentioned she sold them some reductions - I'm not sure exactly how this works...maybe she earns "white tag" energy efficiency credits from the CHP plant?).

Janice also stressed the importance of peer pressure to spark energy efficiency in private homeowners. All too often, the pure economic benefits of efficiency seems insufficient to drive investment. In Aberdeen, Janet has uses aerial and streetside thermal imaging to show residents whether their homes are leaky (red) or well-insulated (blue). In Janice's opinion, when higher-income homeowners see their houses in red...while the lower-income council housing looks blue - their pride sparks them to act much more than pure economic rationality of efficiency. An innovative company started by a couple of my college classmates called Positive Energy uses some of the same principles (comparing your energy usage to your neighbors) to spark more efficiency. They are running some control group experiences to test the effectiveness in Sacramento - going to be interesting to watch the results come in. The early results are promising.



A couple of the units served by CHP - we toured the plant too...but it looked fairly similar to (a little smaller than) the University of Edinburghs - same generator company.