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SIC defends interconnector guarantee

SHETLAND Islands Council has defended its policy of underwriting a £1.9 million guarantee for a 600 megawatt interconnector that could one day link the proposed Viking Energy wind farm to the UK mainland.

Council managers were grilled by two councillors on Thursday who wanted to know why a guarantee for a potential liability was still held by the local authority although the council’s share in the project had been sold to Shetland Charitable Trust in 2007.

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They were told that the guarantee was not for the Viking Energy project but for an interconnector that could also benefit other potential projects such as the planned Vattenfall wave farm or the proposed wind farm at the southend of Yell.

Councillors Gray Robinson and Jonathan Wills said they found it “odd and bizarre” that the council should hold such a guarantee, particularly since the SIC had also acted as a planning authority on the project.

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Councillor Wills said: “We sold our shares and the project is no longer a council asset. I am bewildered why we have not transferred this guarantee to the charitable trust as well.”

Director of development services Neil Grant told a meeting of the audit and standards committee on Thursday that the guarantee remained with the SIC because it was council policy to promote the construction of an interconnector cable to kick start a local renewable energy industry.

He added that the National Grid also regarded the council as “a safer pair of hands”.

Executive manager for governance and law, Jan Riise, added that the guarantee was not for Viking Energy, but “for infrastructure for the renewable industry.”

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Since 2004, and in parallel with the development of the Viking Energy project, the SIC has been underwriting the cost incurred in planning for the cable.

These have increased from £352,500 in November 2005 to almost £1.9 million in the current financial year. However, they have now been reduced to £300,000 due to a new National Grid methodology to calculate the risk.

Cllr Gary Robinson said he had until recently not been aware that the council was underwriting this liability and added that it felt like a “gun (being held) to our head, because we sat as a planning authority on the Viking project”.

The debate in the council chamber was followed by the chairman of the anti-Viking Energy campaign group Sustainable Shetland, Billy Fox, who had previously lobbied councillors on the issue.

After the meeting he said: “I raised my concerns on the item prior to the meeting by email; I am grateful to councillors Wills and Robinson for sharing them. 

“Contrary to what Neil Grant and Jan Riise said this is a guarantee being held for Viking Energy Ltd for the National Grid to carry out an investigation into the viability of a cable. 

“It is an anomalous position for the council to hold such an obligation for a company in which it has no interest.  There was instruction for the guarantee to be carried over to the charitable trust when they bought Viking Energy Ltd, this has not happened.”

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