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Energy / First minister sympathetic to calls for ‘Shetland tariff’

Photo: Shetland News

FIRST minister John Swinney has sympathy with calls for a “Shetland tariff” – but he says reform of the UK energy market is required.

Speaking on Friday after a planned visit to Shetland fell foul of the weather, the SNP leader suggested it is “absurd” for an area involved in generating energy to have high levels of fuel poverty.

Although there are community benefit schemes for onshore wind farms, reduced energy costs are seen as one other way of compensating local people for having to live in an increasingly industrialised landscape – and for islanders to directly benefit from renewable energy projects on their doorstep.

Shetland is set to host what is expected to be the UK’s most productive onshore wind farm when the 103-turbine Viking Energy project goes live later this year.

Smaller wind farms are planned for the outskirts of Lerwick and Yell, while hydrogen production is mooted – as are offshore wind farms to the east of Shetland.

On top of this is Shetland’s long-standing role in the oil and gas industry through Sullom Voe Terminal and the nearby gas plant.

Despite this Shetland has one of the highest levels of fuel poverty in the country, with the colder climate, some poor insulation and lack of availability of cheaper energy options seen as reasons why.

All this combined has led to calls – including from Shetland Islands Council – for a special “tariff” for the isles to compensate.

First minister John Swinney. Photo: Scottish Government

When asked by Shetland News if he sympathises with the idea, Swinney said he did – but conceded it would all have to come down to change at a UK level.

Matters relating to the generation, transmission, distribution and supply of energy is reserved for decision making at a UK level.

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“It’s one of the absurdities of the UK energy market that the areas that are now generating – well, Shetland’s always had a significant contribution towards the generation of energy within the United Kingdom – but in terms of the electricity market, the areas of the country that are now formidably contributing towards the electric market are actually paying very high fuel costs and have high levels of fuel poverty,” Swinney said.

“I am very sympathetic to the points that are advanced but what this requires is reform of the United Kingdom energy market, and that is long overdue.”

The first minister said he does not feel the market reflects that energy is now coming from a wide range of sources compared to the past.

“If you go back 30 years or so, most of the electricity in the country came from large power stations, and now our electricity largely comes from a diffuse range of renewable energy projects around the country,” Swinney said.

“That is going to get more diffuse in the years to come, and Shetland is making a significant contribution towards that not least from the Viking Energy project but from a range of other ventures that will contribute to that diverse energy mix.

“So I think it’s [the ‘Shetland tariff’] a really substantial idea.”

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