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Tuesday 23 July 2024
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Energy / Company warns of possible subsea cable outages

The Danish company NKT has been awarded the contract to manufacture and install the high voltage subsea cable between Shetland and the Scottish mainland.

RELIANCE on a subsea cable to keep the lights on in Shetland and allow the development of a number of large wind farm projects could potentially lead to blackouts, huge compensation payments and thus higher electricity prices for consumers.

That is the view of Burmeister & Wain Scandinavian Contractor A/S (BWSC), the company whose proposal for building a liquid natural gas fuelled power station in Lerwick has been rejected by the energy regulator.

Instead, in a decision announced last Thursday, Ofgem approved a 600MW subsea transmission link on the condition it is satisfied by the end of the year that the SSE Renewables owned 443MW Viking Energy wind farm is likely to go ahead.

As a consequence, and on the same day, SSEN Transmission awarded a £214 million contract to build the 260 kilometre HVDC link between Kergord in Shetland and Caithness to Danish company NKT.

In a 30-page document submitted to Ofgem as part of a consultation into the isles’ long-term security of energy supply, BWSC not only criticises Ofgem and SSE’s apparent reluctance to engage with the company but also raises some serious questions over the viability of the energy solution that now appears to be the chosen path.

Referring to the performance of the 422-kilometre Western Link, BWSC urges Ofgem not to commission new subsea cables until the issues and malfunctions of the £1.3 billion link connecting Scotland with Deeside, in northern Wales, have been established.

According to the trade press, the Western Link was more than two years late in being switched on at half its capacity in December 2017. Since then the interconnector that primarily takes wind energy from Scotland to the centres of population in England, suffered several months of long outages.

BWSC said that even without the Viking Energy wind farm (VEWF) and the other planned wind farm projects in Shetland there is already an overcapacity in wind energy coming from Scotland.

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Last year, wind farm operators in the UK were paid £139 million in compensation for being constrained off because the grid couldn’t handle the additional renewable energy.

By the end of May this year operators had already received £123 million in constraint payments at a price of £73 per MWh, which is significantly more than the strike price agreed for offshore wind at last year’s Contracts for Difference (CfD) auction.

“The overcapacity situation of wind power in Scotland is made worse by the chronic failure, for much of the time, since it was commissioned in 2018, of the Scottish Power/National Grid, Western Link,” the company writes in its submission.

“No HVDC link, however well-built and safeguarded can ever be guaranteed to be available at all times.

“Considering that VEWF, if built, will be the most remote wind farm from its market, it will surely be among the first to be constrained. SSE Renewables knows this.

“During anti-cyclones, Shetland will be depending on England to ‘keep the lights on’. This dependence in Shetland upon HVDC cables, wheeling power over many hundreds of miles, is unlikely to be without fault over the next 30 years, as history is currently demonstrating.

“During the past seven years 90 subsea cable failures occurred totalling over Euro 350 million in insurance claims.”

A standby power plant must be available within seconds of any electrical disturbance occurring between Scotland and Shetland, and run continuously until the fault has been identified and repaired, the company continues to say.

This “will most likely be a full-scale diesel power station with an overall operating specification more or less identical to the gas-fired power plant that we are proposing”.

BWSC said it challenges the assumption that such a standby power plant could be built for just £24.6 million. The company calculates it own proposal for a power plant plus LNG terminal at Lerwick harbour would cost around £105 million.

“By making LNG and therefore gas available on Shetland, far greater CO2 emission reduction can be achieved by bringing LNG to Shetland than purely by generating all Shetland’s electricity from wind power,” the company said.

Fuel poverty in the Shetland Isles is among the highest in UK. VEWF + Shetland Link will not result in reduced electricity prices for Shetland’s consumers.”

A request to SSE for a more detailed insight into its business case remained unacknowledged and unanswered.

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