Energy / Council hopes for funding to help energy hub spin

A schematic of how the energy hub might work.

A RECENTLY announced Scottish Government fund could help underpin development of Shetland’s future as an “energy hub”.

According to a report to go before councillors next week, the hub aims to create 1,750 jobs in Shetland by 2045 as part of the drive to transform the carbon economy to a “green” one.


Council bosses say the SIC has been trying to engage industry to sign up to the concept of the energy hub and that an intensive period of research will follow to focus on which directions will be viable for the future.

The council has spent £250,000 so far, mainly on “staffing costs”, and it has taken on consultants Gunther Newcombe, the former Oil and Gas UK boss, and ex-Sullom Voe Terminal manager Arthur Spence for advice on the project.

It is partnering with the Aberdeen based Oil and Gas Technology Centre to bring forward the energy hub plan.

SIC leader Steven Coutts said that that council was trying to make the hub happen “as quickly as possible”.


A steering group would be set up and match funding was being sought from the Scottish Government and industry.

“The government has various targets between 2030 and 2050 but we are clear that there are opportunities that can be taken now. We want to maintain that pace and see commitment from government and industry,” said Coutts.

According to Coutts, Shetland has a very bright future, but there are major short-term setbacks to weather before the likes of the hub comes to fruition.

SIC political leader Steven Coutts.
SIC leader Steven Coutts: Photo: Shetland News

The Scottish Government last week announced a £62 million Energy Transition Fund to support businesses in the oil, gas and energy sectors over the next five years “grow and diversify” and to help attract private sector investment in the region.


Although the fund’s stated aim is to help the sector recover from the double whammy of the oil and gas price slump and the Covid-19 pandemic, it is also squarely aimed at delivering a “net zero” greenhouse gas future.

SIC economic development manager Douglas Irvine said that now that fossil fuel corporations had embraced the renewable energy future, the pace and quantity of research and development was staggering.

According to Irvine the ambitious energy hub plan is as much about how Shetlanders will be living their daily lives as about major industrial projects like producing “blue” and “green” hydrogen.

Among the aspirations are: the provision of clean energy and elimination of fuel poverty; maintaining a pristine environment, and providing investment opportunities and sustainable employment.

Irvine said that there “will be hydrogen vehicles” in the isles by 2030, but how the council will “green” its own fleet of vehicles and ferries has yet to be decided.

The main focus now is to figure out what parts of the hub plan will be sought after by industry; as such, an intensive piece of research will follow.


The report says that the energy hub aims to provide 12 per cent of UK hydrogen requirements worth £1.5 billion annually.

It also aims to reduce carbon emissions in the UK sector by eight million tonnes a year by 2050.

According to Irvine this will be done by storing carbon dioxide in old pipelines and disused subsea infrastructure.

SIC chief executive Maggie Sandison said that the council had been working hard on the hub plan since the turn of the year, mainly trying to get industry to become stakeholders in the project.

“As far as supporting development of the hub itself, industry and the UK and Scottish governments have to be part of making this work,” she said.

Sandison said that with offshore wind predicted to increase ten fold by 2050, that could also be factored into how the hub could use and link to that resource.

SIC chief executive Maggie Sandison.

Sandison said that while certain sectors of the global economy were not ready for “net zero” technologies, production of oil and gas would remain viable. But green powered extraction of fossil fuels would minimise the carbon footprint of these resources.

The chairman of campaign group Sustainable Shetland, which believes renewable schemes “must be fit for scale and fit for purpose”, said that hydrogen could be worth pursuing “as that would not necessarily require” an interconnector link to the mainland.

Frank Hay, however, claimed that hydrogen has “yet to make a much of an impact as an energy source and is not very competitive cost-wise”.

He said he also believes that a proposed gas power station and LNG terminal in Lerwick “would be a far better use of oil and gas technology than thinking about powering oil and gas installations from onshore”.

Hay also claimed that the energy hub announcement “would appear to be a further PR exercise to boost support for the interconnector”.