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Business / Energy study to map out capacity of local supply chain

The arrival of the Buchan Alpha into Dales Voe for decommissioning in 2017. Photo: Shetland News

A DETAILED study of local companies’ capacity to support large scale developments in the energy sector in areas such as oil decommissioning and wind farms is set to be carried out in Shetland.

Shetland Islands Council (SIC) and Highlands and Islands Enterprise (HIE) have put a contract for the supply chain mapping exercise out to tender.

They are keen to get a firmer grasp on the capability of local industry, in sectors like engineering, to service future developments in energy industries.

The study will also be used in efforts to raise the profile of the local sector, particularly in relation to attracting inward investment.

More decommissioning of oil and gas platforms will be carried out in Shetland following the arrival of the Buchan Alpha at Dales Voe in Lerwick in 2017.

Ninian North platform topsides are due at Lerwick for dismantling next year, and the Scottish Government has pinpointed Dales Voe as the preferred location for an ultra deep-water base for decommissioning in Scotland.

Photo: Shetland News

The 103-turbine Viking Energy wind farm, meanwhile, could become reality between now and 2023/24 if it is successful in winning government subsidy this year, which would trigger the construction of a £700m subsea cable connecting Shetland with the national grid.

An event organised by HIE and Viking Energy was held in Lerwick last year aimed at bringing together local contractors and renewable developers.

At the event it was said that as many as 600 construction jobs could be up for grabs if all of Shetland’s proposed wind farm developments go ahead.

It was also estimated that the Viking project alone might punt £49 million into the local economy during the construction phase with another £6 million being spent annually in running costs.

A proposed 29-turbine wind farm in Yell, backed by the Energy Isles consortium, is in the early stages of planning, while Peel Energy has permission for smaller developments in Yell and outside of Lerwick.

Like the Viking wind farm, these three proposed developments also need connection to a subsea cable to allow them to export energy.

Local suppliers, meanwhile, also got a chance to engage with the oil and gas industry at a two-day event in Lerwick last year.

Opportunities were reiterated in the decommissioning sector, as well as ongoing work at Sullom Voe Terminal and Shetland Gas Plant.

But HIE team leader Katrina Wiseman said after these events a gap was been identified in the knowledge and understanding of the capability and capacity of the existing supply chain.

SIC business development team leader Thomas Coutts said the new study would also look at how the local supply chain could be marketed outside of the isles.

“The purpose of the study in question is to understand the capacity of the local supply chain to support large scale developments in the energy sector,” he said.

“This is particularly in relation to the development of deep water decommissioning, Shetland’s role in servicing the wider oil and gas sector, and developments in onshore renewables, including Viking Energy.

“The study is also intended to provide recommendations as to how the capabilities of the local supply chain can be promoted outwith Shetland.”

Wiseman added: “On the back of the successful oil and gas event and renewable energy events held in Shetland in late 2018, a gap has been identified in the knowledge and understanding of the capability and capacity of the existing supply chain in Shetland, amongst those procuring products and services in the energy sector.

“There are high value opportunities for Shetland arising in the oil and gas, decommissioning, and renewable energy sectors.

“To inform these projects and to support inward investment in the future, this work will help us to understand the capacity of the local supply chain to support large scale developments, to increase the profile of the local sector, and to ensure that future opportunities are made available for Shetland based businesses.”