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Energy / Locally owned company offers best energy price deal

DISTRICT heating is now the cheapest energy source available for people to heat their homes, and it is the only one that is being controlled locally.

Shetland Heat Energy & Power (SHEAP) director Derek Leask said the company – which operates the Lerwick district heating scheme – has been able to keep prices unchanged for several years at 6.9 pence per kilowatt/hour at a time other energy prices, such as electricity, as well as domestic oil and gas, have been going through the roof.

Leask was referring to the latest data from the Nottingham Energy Partnership which shows, unsurprisingly, that electricity is by far the most expensive energy at 33.65 pence per kw/h.

The data indicates that the economics of ground source and air source heat pumps have also become less favourable due to the rising electricity costs, the end of renewable heat incentive (RHI) payments and the harsh Shetland climate.

And, for the first time, mains gas, which is not available in Shetland, has become more expensive than heat from district heating schemes.

His comments came on the same day chancellor Rishi Sunak finally announced a government package to help families to pay their ever-rising household bills.

Government pledges £400 energy bill discount for all households

Earlier this week energy regulator Ofgem announced that it expects the energy price cap to rise to £2,800 in October, which represents a further price hike of more than £800.

Leask said district heating was now not only the cheapest energy available, but it also offered the greatest level of energy security.

“Every other energy source in the country has been affected by global social and economic issues but district heating by its definition is local, and it means we can run without being affected by the world issues that have such an impact on energy prices nationwide,” he said.

And Leask praised those who had the foresight to form a community owned energy company 25 years ago that then started investing heavily in Lerwick’s 40 kilometre long pipe-network which is essential in bringing heat to more than 1,200 local customers.

SHEAP director Derek Leask

SHEAP is wholly owned by Shetland Charitable Trust, which appoints a number of directors to oversee the operation of the company. All surpluses are reinvested in the trust.

“We probably have one of the most successful community owned energy companies in the whole of Scotland. I hear people saying sometimes ‘it would be good if Shetland had a community owned energy company’; they actually forget that we have one,” he said.

Leask said SHEAP had recently started receiving waste heat from the Lerwick power station next door.

The recent refurbishment of the council owned incinerator has increased the efficiency of the energy recovery plant from 85 to 90 per cent, meaning that more energy from burning the isles’ domestic waste is converted to heating homes and offices in Lerwick.

Leask said he acknowledged that people living outside of Lerwick were unable to benefit directly but noted that indirectly the district heating scheme was serving the entire community as many of the town’s public buildings such as the hospital, the new high school and the leisure centre were connected.

For many years there has been talk about creating smaller district heating schemes elsewhere in Shetland.

Leask said the company was ready to take on a new challenge: “With the new council now in there might be an opportunity at looking at new smaller heating networks at some of the country areas, we would be happy to take on that challenge and work on that.

“To make district heating work you need an ‘anchor load’, a big user like a swimming pool or housing estate, or the new Brae High School,” he said.