Energy / District heating scheme generates income for charitable trust

The waste to energy plant in Lerwick. Photo Shetland News
The waste to energy plant produces the hot water for the Lerwick district heating scheme. Photo Shetland News

SHETLAND Charitable Trust has benefitted from a £190,000 surplus generated by the Lerwick district heating scheme.

Shetland Heat Energy & Power Ltd, better known as SHEAP, is a limited company wholly owned by the charity that looks after Shetland’s oil funds.

The arrangement means SHEAP is not required to pay corporation tax on the surplus while Shetland Charitable Trust receives the funds tax free.


The six-figure profit was earned from supplying district heating to properties in Lerwick during 2019/20.

Established in 1998, SHEAP is one of the largest and longest-running heat networks in Scotland.

It buys hot water produced by Shetland Islands Council’s energy recovery plant and circulates it to heat more than 1,200 homes and larger buildings, including schools, the hospital, care homes and the Clickimin Leisure Centre.

The heat comes from incinerating unrecyclable waste that would otherwise have been landfilled at higher cost and with higher emissions of methane and other gases which contribute to climate change.


SHEAP director Derek Leask said the company was expanding and developing its business and was looking forward to contributing more towards the Scottish Government’s targets for reducing carbon emissions.

“We’re very pleased to be able to pass on a significant sum of gift aid and it’s great that money generated from district heating goes back in to benefit the community, especially in these difficult times,” Leask said.

“We hope we’re meeting our aspiration to serve the community well through generating gift aid while keeping prices affordable and contributing strongly to reducing Shetland’s carbon footprint.”

Shetland Charitable Trust provides grant funding of around £8.4 million to local charities including to local amenity, arts and recreational trusts as well as towards the rural care model.