John Watt’s letter (‘Costs more than oil‘ SN 4/3/16) has deservedly won wide readership with an impressive 67 “shares” to date on Facebook.
John calculates the price of oil heating as 4.5p/unit (kWh) versus the district heating scheme’s 6.6p/unit. In Argyll oil-fired heating costs about 3.3p/unit (kerosene, 27.8p/litre), which raises an important question over how much dearer oil is in Shetland where significantly more heat is needed due to the colder climate. Little wonder fuel poverty is rife in the isles.
You also report that Shetland Heat Energy and Power (SHEAP)’s planned new heat pump system for recovering heat from the sea is intended to replace supplementary oil burning in the district heating system.
SHEAP is a subsidiary of Shetland Charitable Trust (SCT), created to provide income for the trust.
The heat pump will cost £1.6 million and will be paid for with a low interest loan from the Scottish government, to be repaid using money from SHEAP’s customers and/or the trust. Presumably then, those stakeholders may look forward to a reduction in the price of heat and/or an increase in income for the trust?
Interestingly, the SHEAP statement does not refer to economic benefits, which seems odd. Given Shetland’s shocking level of fuel poverty (over 40 percent), surely they would be boasting about any such benefits – if there are any?
Gaps exist in SHEAP’s reported information, however. From my own personal experience as a power station engineer, it seems highly unlikely that this project is viable without major subsidy.
A (low interest) loan from the Scottish government is mentioned and energy minister Fergus Ewing is quoted: “Heat is…. responsible for nearly half of Scotland’s greenhouse gas emissions, so the imperative to take action is very clear.”
Ewing declares “the imperative to take action is very clear”, yet he doesn’t mention any subsidy?
Surely, as a subsidiary of SCT in its current regime of spending cuts, SHEAP would not spend £1.6 million on a financially unviable project that will become a drain on customers’ pockets and/or trust reserves?
The SHEAP operations manager is quoted: “The primary aim is not to increase the number of households joining the district heating scheme, but to offset some of the oil we burn with a renewable source.”
What, even if it puts up heating costs or reduces trust income?
Key questions need answers:
- What is the price of heating oil in Shetland?
- What subsidy is available to make SHEAP’s investment viable?
- What will be the effect on district heating charges?
- What will be the effect on charitable trust income?
- Is the trust’s priority to burn less oil or to make energy affordable?
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