The construction phase has begun on Scotland’s first community urban hydro scheme, in the Tillydrone area of Aberdeen.

When complete, the Donside Hydro scheme will produce electricity to be sold to the national grid, generating clean, renewable electricity and a sustainable income for the local community to invest in local priorities. The project is expected to generate many thousands each year for the community fund and enough electricity to power the equivalent of around 130 homes annually.

The renewable energy project is being developed by Aberdeen Community Energy (ACE), a community benefit society set up by members of the Donside Community Association (DCA).

Sinclair Laing, founding director at ACE, said: “Getting to the construction stage has been a tremendous challenge, with hurdles at almost every juncture, but I’m delighted to say that with sheer determination and a huge amount of support from everyone involved we have reached this vital milestone.

“I’m a great believer in the power of community and this is a meaningful example of how community energy projects are achievable and can make a difference. ACE and the DCA have been working on this project for over three years and it’s a fantastic feeling to finally see our contractors and diggers on site, preparing the site for construction.

“Our next milestone is the launch of the Community Share Offer, which will fund the £1.2 million project. The share offer will be open to everyone up and down the country and offer a low risk, ethical investment opportunity with a targeted annual return of around 7 per cent. This is where we are incredibly reliant on the support of our fellow communities across the UK; if you are passionate about green energy and sustainable communities or even if you’re just looking for a solid return on your investment, then please take some time to find out more about ACE and the Donside Hydro.”

Minister for business, innovation and energy, Paul Wheelhouse, said: “This is a great example of a local community capitalising on its own urban natural resources. This hydro project will benefit the whole community and will provide a long-term income that will support local projects for more than 20 years.

“The Scottish Government was instrumental in this project, providing support to Aberdeen Community Energy under the Community and Renewables Energy Scheme (CARES). The scheme helps communities maximise the benefits from renewable generation in their local area and I hope that the project can help inspire other communities across Scotland to join a growing list who are similarly benefiting from Scotland’s renewable potential.”

Construction of the main body of the scheme is on track to be completed by the start of October 2016 so that the hydro can begin producing electricity, with landscaping of the riverside area to follow shortly thereafter.

The Community Share Offer is expected to launch in early July 2016.