District heating price rise inevitable, company says
THE COST of heating Lerwick homes and businesses connected to the district heating scheme will go up by between seven to eight per cent from 1 April.
Shetland Heating Energy and Power (SHEAP) said the company, which is owned by the Shetland Charitable Trust, had been able to hold prices for the last three years.
The domestic charge for a unit of energy will go up by 8.7 per cent from 6.9 pence to 7.5 pence, however the standing charge of £160 per year will remain unchanged.
Company director Derek Leask said: “We had a couple of projects in this period that improved energy efficiency in the system, and we decided to use the revenue we saved to keep tariffs down as we felt the community was suffering enough from the cost of living crisis.
“We are a community-based energy company so were able to respond locally in this way.”
However, inflationary pressures have left the company with little choice but to increase its prices.
“We use electricity for our pumps which convey our energy round the town and those costs have increased significantly in recent years,” Leask said.
“Our domestic rates are also increasing next year and cost for insurance and materials for upkeep and maintenance of the system have all risen dramatically.”
He added that in the same three year period the average domestic electricity tariff has increased by around 70 per cent from 19.6 pence a kilowatt hour in 2020 to over 34 pence per kw/h. The unit cost would be even higher without the energy price cap.
“The fact that we can keep our increase at under a penny a unit marks the difference between ourselves and national energy companies,” Leask said.
“We don’t like price increases and try and provide affordable energy to the community. We believe our tariff of 7.5 pence per kilowatt still presents good value for money in the current energy sector.”
Earlier this month, Shetland Islands Council increased council house rents and council tax by 4.5 per cent.
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