Councillors in Aberdeen have agreed to progress plans for an arms-length external organisation (ALEO) to manage all the local authority’s energy-related activity.

Wholly owned by Aberdeen City Council, it is hoped the Energy Services Company (ESCo) will help towards the council’s objectives of improving energy efficiency and alleviating fuel poverty. ESCo will also have the option to expand and develop energy related services over time.

An interim informal Working Group led by a project manager will now be set up to develop a detailed business plan.

The Working Group would include relevant internal energy experts, elected members including two from the administrating and one from opposition, and representatives from the council’s legal and finance services.

Aberdeen City Council 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.”

Recommendations in a report before councillors included a legal structure for the organisation, form a governance structure, identify a priority project list, examine a staff and management structure and job descriptions, examine initial resource and funding requirements, and form an initial business plan for the first three years.

The costs for the business plan are estimated to be in the region of £30,000-£45,000.

In May 2016, the council approved Powering Aberdeen – Aberdeen’s Sustainable Energy Action Plan which aims to cut carbon emissions across the city by 31 per cent by 2020 and 50 per cent by 2030. The plan proposes actions in the areas of energy efficiency, renewable energy, energy from waste, district heating, alleviation of fuel poverty and sustainable transport.

Project developed and funded by the council that support the ambitions of Powering Aberdeen and will make it a more significant player in the energy market are already underway.

These include the development of the Energy from Waste plant at Tullos that will generate heat and power for onward sale, as well as the Anaerobic Digestion plant and energy centre being developed at the AECC that will provide the opportunity to generate excess heat and power for sale beyond the AECC site boundary.

To deliver these projects and the activity envisaged within Powering Aberdeen additional skills and resources are required that are not currently available within the council. These include metering, billing, customer service, energy trading, delivery and implementation skills such as project management, commercial and transactional capability as well as access to wider funding markets. The establishment of an Energy Services Company will provide a vehicle to manage this activity.