Council / ‘Council has a duty to ensure the best possible return for its assets’ – Sandison

Chief executive responds to concerns in the community over the council’s negotiations with energy giants

THE COUNCIL’s chief executive Maggie Sandison has given a reassurance that the SIC’s negotiating team is driving a hard bargain in talks about the head of terms for the lease of land at Scatsta.

At the end of last month, Norwegian state-owned energy giant Statkraft and partners were made the preferred bidder to develop the site for future energy production.

Sandison said talks kicked off as soon as councillors gave the go-ahead for these to proceed on 30 May. She said she was confident the negotiations would conclude before the end of the year.

SIC chief executive Maggie Sandison. Photo: Hans J Marter/Shetland News

Statkraft has not yet revealed what exactly its plans are for the site between former Scatsta airport and the waters of Sullom Voe.

However, a race is on between a number of large players to get their hands on as much of Shetland’s vast renewable energy potential needed for the production of green hydrogen and ammonia.


Responding to anxiety expressed in the community that Shetland might ultimately lose out in this race – and will have things done to it rather than being a partner in it – Sandison said the council had “a duty to ensure that its assets are making the best return for the organisation”.

“The council’s position has always been clear that in addressing in the shift to net zero and the just transition Shetland’s resources have to return a benefit to Shetland, and we said that repeatedly in our negotiations with developers,” she said.

“I would hope that community understands that the council is trying to ensure that Shetland benefits from whatever comes after oil and gas, and in a way that actually benefits householders as well as the organisation and other parts of the community.”

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Considering the size of some of the local energy developments and their potential to generate billions of pounds for the companies owning them, there is a general feeling that the council has a tendency to undersell its land assets.

Currently Shetland Islands Council leases the land Sullom Voe Terminal is built on from Shetland Charitable Trust for £700,000 and sub-leases it to EnQuest for the same amount. This arrangement is due to run until 2025.

Meanwhile, the SIC expects to earn £1.6 million from the Shetland Gas Plant land lease this financial year.

In addition, Shetland Islands Council earned £141,964 for the 18 Viking turbines on the Busta Estate, plus £238,424 for rock mineral royalties, both for the 2021/22 financial year.

Sandison added that companies and government ministers are being lobbied on community benefit and the isles’ high levels of fuel poverty wherever appropriate.


And she expressed surprise at a recent Shetland News report which quoted a spokesperson of energy regulator Ofgem who said he had never heard of the ‘Shetland tariff’ – adding that in any case the government agency had no powers to look into such proposals.

“It is quite clear that in every engagement that we have, and where it is appropriate and the right audience, the council is raising the issue of fuel poverty,” she said.

Is the council’s plea for a ‘Shetland tariff’ heard at government level?

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