Community / UK Government sympathetic towards ‘Shetland Tariff’ – but no commitment given

UK Government levelling-up minister Dehenna Davison during the interview with Shetland News on Wednesday.

THERE was no commitment from the UK Government that it will deliver on the campaign for a ‘Shetland Tariff’ of reduced bills for people on ‘energy islands’ other than a promise to continue discussions to “find a path forward”.

The council-led initiative that aims to let islanders benefit from renewable energy projects through lower energy prices was aired at the first meeting of the islands forum, set up to let islands benefit from the government’s levelling-up agenda.

Held in Orkney this week and chaired by the Chancellor of the Duchy of Lancaster Nadhim Zahawi, the meeting was attended by representatives from island authorities from around the country.

Speaking to Shetland News after the two day event, newly appointing levelling-up minister Dehanna Davison said she had listened to what Shetland had to say.


“We had a good discussion about that this morning, and there was also an opportunity for island representatives to talk to [energy regulator] Ofgem about some of the very specific challenges on those points, which was really important,” she said.

“I am not going to sit here and give you a commitment right now – it’s not my department.

“But what I can say is that this forum was a really good opportunity for these issues to be raised, and definitely from my perspective and the chancellor of the Duchy of Lancaster’s perspective, this has very much been heard and we are keen to work with the community in Shetland to see how we can find a path forward on this.”

The SIC is pressing the UK Government to take steps that would change energy regulations to allow islands such as Shetland, which will soon be a net exporter of renewable energy, to benefit from a tangible reduction in people’s electricity bills.

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A key player in the oil and gas industry for half a century, Shetland has the largest level of fuel poverty anywhere in the UK while paying some of the highest energy tariffs.

The council’s political leader Emma Macdonald said that this week’s islands forum was the “start of an engagement” process with the UK Government and acknowledged that it would take some time before tangible benefits would be achieved.

SIC political leader Emma Macdonald. Photo: Shetland News

“This [the Shetland Tariff] is not a quick fix,” she said, adding that more immediate action was urgently needed on energy prices.

Earlier this month, the local authority published research which showed that almost everybody in the isles would be in fuel poverty in the spring if the energy price cap rose as expected.


The government has since announced emergency measures to cap domestic and business energy prices, but people in Shetland are still faced with domestic electricity bills that could be higher than £5,000 per year.

“We need a solution now; people need to be able to put the heating on this winter,” Macdonald said.

Meanwhile, the SIC will have to wait until later this year to hear whether an application for £25 million from the UK’s Levelling Up fund towards a new Fair Isle ferry and associated infrastructure was successful.

The council had hoped the government would use the islands forum as a good opportunity to make an announcement.

Davison said the government had received a “huge raft of bids” and it would take a little longer than expected to evaluate them all.


‘There will be an announcement coming this autumn; we try to speed up that process as much as we can,” she said.

The next islands forum is expected to be held in March next year. A location is yet to be confirmed, with the Scilly Islands understood to be one possibility.

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