MOVES to supply offshore oil and gas facilities with renewable energy generated in Shetland could open up an avenue towards much cheaper electricity prices for islanders, Shetland Islands Council (SIC) believes.
The SIC has already initiated talks with the UK Government with the aim of overhauling the energy markets’ regulatory framework, a pre-condition to make a special Shetland Islands tariff a reality at some time in the future.
Affordable electricity prices would at long last make some inroads to tackling the islands’ extremely high levels of fuel poverty, according to council leader Steven Coutts.
Figures published by the Scottish Government earlier this week confirmed once again the extent of fuel poverty in Shetland, with 22 per cent of homes suffering from extreme fuel poverty where more than a fifth of household income is spent on heating.
Coutts acknowledges that despite many initiatives over recent years, very little in combatting fuel poverty has been achieved.
Speaking to Shetland News this week, Coutts said the current set-up was clearly not working when one of the major energy provinces in the country has one of the highest levels of fuel poverty, caused partly by the highest prices for energy anywhere in the UK.
The council’s move reverberates with calls made since Sullom Voe Terminal became operational in the late 70s that Shetlanders should have access to cheap fuel in recompense of hosting a national energy asset.
That of course never happened, but this time round, with the Viking Energy wind farm in the process of being built, the council seems determined to grab the opportunity this presents.
Key to the initiative is the requirement for the oil and gas industry to decarbonise as the country moves towards net-zero. Already there is an industry understanding that no new West of Shetland oil or gas developments will get the green light without taking its power from wind farms, and that will be from Viking Energy.
The council’s Orion project co-ordinator Gunther Newcombe said the initial offshore demand would be in the region of between 120 to 150 megawatts.
Coutts said platform electrification would “clearly not be feasible” for BP, Equinor and the other oil multinationals if they had to pay the same domestic rates everybody else on the islands does.
“What we are seeking is parity, because we don’t want a situation where one sector is benefitting from lower prices,” the Shetland west councillor said.
“It is an argument about parity and fairness, because at the end of the day the electricity the oil companies and the households will be getting is generated at the same place.
“Some of that work has started already, initially with an early conversation I had with Alister Jack, the secretary of state for Scotland.
“Quoting the case of Sullom Voe and highlighting the high levels of fuel poverty, there is an acknowledgement that the current set-up is not working, but how that can be changed is something that we all need to work together on.
“I believe we have a very compelling argument due to our geography, the contribution we will make in terms of renewable energy generation, and the importance of fairness and equity.”
But will anybody in government as well as the regulatory agencies such as Ofgem listen to a tiny local authority in the far north of Scotland? And with no real influence on the Viking Energy project, why should wind farm owner SSE Renewables be interested in entertaining the council’s wishes?
Coutts said the secretary of state took on board the points the council was making. Meetings with the various stakeholders such as energy regulator Ofgem, are now being sought, he said.
And with regards to the decision by Shetland Charitable Trust almost two years ago not to further invest in the massive wind farm, Coutts said he had not been involved in the trust’s decision and therefore could not comment on it.
He added: “We can only deal with the situation we find ourselves in now; we are looking for any opportunity to reduce energy cost for those in Shetland.
“I do believe that people like to see a direct link between generation of energy and more affordable fuel prices.
“I am committed to open this Pandora’s Box, get a solution that fits Shetland and try to address fuel poverty that has been a wicked issue in Shetland for too long.”
The Scotland Office has been approached for comment.
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