Plans are underway to create a £30 million community-owned district heating network throughout Inverurie, Kintore and Port Elphinstone.
Garioch District Heat, a not-for-profit organisation, hopes to get 10,000 homes, businesses and public buildings hooked up to the new system by 2025.
The ambitious project is to be funded through a mixture of government grants and a community share offer where residents will have the opportunity to own part of the company.
The heat for the project is to be donated from Agile Energy which was granted planning permission to build a £200 million incinerator to be built at Thainstone Business Park on the site of the former Inverurie paper mill.
The development will be capable of generating up to 35MW of electricity to be exported to the national grid, and up to 80MW of heat, which would be provided to the district heating network.
The proposed network for Garioch would take residual waste heat from non-recyclable waste already created within the community, to provide clean, safe, affordable low-carbon heat to the community.
Up to 240,000 tonnes of commercial waste per year will be brought to the site from businesses across Aberdeen, Aberdeenshire and Moray.
‘Win win’ for the community
Garioch District Heat chairman George Niblock has described the project as a “win-win for the community” and said gas prices are expected to be cheaper than current ones for users of the new system.
There are currently 180 district heating schemes in Scotland and 14,000 across UK.
Mr Niblock said: “Agile Energy have been granted planning permission to build the energy from waste plant.
“Once the plant has generated the electricity that they’ll put into the grid there is a low level of heat available which in the old days just to be vented back into the atmosphere.
“But nowadays because of environmental considerations they want to utilise that heat.
“There are a number of plants where heat is actually sold to the community but Agile Energy have offered to gift the heat to the community and we are excepting that very gratefully.”
Heat battery concept an option
It’s also hoped to extend to rural areas such as Hatton of Fintray, Chapel of Garioch and Old Rayne with heat battery.
Instead of using gas oil or LPG homeowners would have a small box which would be recharged with heat.
£30m of funds to be raised
The first stage for Garioch District Heat will be to raise around £750,000 for the development stage of the project followed by the rest of the money.
Mr Niblock said: “Sitting at the moment we’ve got virtually no money.
“For a massive project such as this we reckon it’ll be in the range of three tranches of £10 million.
“It takes a lot of revenue money to plan that. We need legal advisors, project managers and technical specifications before we can get the thing built.
“For a massive project such as this we reckon it’ll be in the range of three tranches of £10 million.”
“We reckon somewhere in the vicinity of us needing pre-capital revenue of near £750,000.
“We are currently in discussion with the Scottish Government to get the staged funding to start looking at the project.
“At that point in time we will do a mix of government grants but the bulk of the money we suspect will come from a share offer and that’s where the community will have the first chance to buy shares in this and to own the company.”
Grants and share option key to success
Mr Niblock has every confidence in the funds being found and the project pressing ahead.
He said: “It’s not a lot of money when you consider that at this point in time using government’s own figures we reckon at least £20 million a year goes out of the Garioch community to pay for heat and hot water. That goes to national companies and goes out the county or the area.
At least £20 million a year goes out of the Garioch community to pay for heat and hot water. We are going to retain that in Garioch.”
“We are going to retain that £20 million per annum in Garioch.
“We are in discussion with the Scottish Government to get a Community and Renewable Energy Scheme development grant to help us start off with legal and technical advice to get a proper business plan and have also applied to the Vattenfall fund.
“We don’t know how much we’ll get from grants but there are several systems available.
“There is £500 million allocated for the north-east of Scotland to drive the transition.
“Heat networks are part of the government’s priority.”
Support for heat project
Garioch District Heat has been assisted by Energy4All who work with communities to develop co-operatively, genuinely community owned innovative renewable energy projects.
They help raise the funds needed for the projects go forward and offer help and advice during the construction process.
Mr Niblock said: “The advice we’ve had from Energy4All at this point in time is they are many pensions funds and other sources of long term investments that are looking for more ethical and carbon free investments.
“Their advice to us is that we should have no significant problems.
“There are a number of big pension funds that they are aware of who have indicated an interest in our project.
“At the moment there are 30,000 homes in Scotland on district heat networks.
“Within the next seven years there’s got to be one million homes.”
How much will it cost for users?
Mr Niblock admits at this stage there’s no guarantees over the prices that users could be paying.
However, he believes it’ll cheaper than what householders are currently charged by their gas companies.
He said: “We haven’t done the sums. We can’t say what the cost is going to be.
“Our expectation is that it’s going to be cheaper than gas prices.
“It’s a win win for the community and a very exciting opportunity.”
Launch event to be held
Garioch District Heat is to hold its launch event at Inverurie Town Hall tomorrow (May 7) at 1:30pm.
Visit www.gariochdistrictheat.net to book a place through Eventbrite.
It will be followed by a community consultation in the Autumn.