Energy / Scatsta hydrogen lease and community benefit details revealed
The council will receive just over £1m in rent annually, and the project will pay out around £2m a year in community benefit
STATKRAFT says it is to take forward plans for a hydrogen project at Scatsta after agreeing a lease on the site – with landowner Shetland Islands Council (SIC) set to receive £1.13 million in rent a year.
The proposed scheme is an electrolytic hydrogen to green ammonia production facility of up to 400MW, on land adjacent to the disused Scatsta Airport.
The SIC said there will also be a fixed community benefit payment to the council of £5,000 per MW installed capacity – the equivalent of around £2 million per annum at today’s value.
The SIC said these funds will be managed by the council and used to lever in further funding for strategic projects.
Statkraft said the green ammonia produced will be used by a wide range of industries, including as a sustainable fuel for marine shipping and to decarbonise fertiliser production.
It added that the construction of schemes like Shetland Hydrogen Project 2 – the formal title for the Scatsta project – will allow excess renewable power that cannot be utilised by the grid to be transformed into hydrogen.
Statkraft has three wind farms on Shetland in pre-construction – Mossy Hill near Lerwick, and Energy Isles and Beaw Field on Yell.
There has been some frustration at the length of time for news to emerge of the Scatsta project, with councillors last discussing the lease arrangements in private at the end of March.
But Stuart Marley, Statkraft’s principal hydrogen project manager, said today’s (Wednesday) news marks an “exciting milestone for the potential to develop green hydrogen and ammonia production in Shetland”.
“This scheme offers an opportunity to combine Shetland’s renewable resources with innovative technology,” he added.
“The historic links with energy production mean there is a wealth of talent in the region to draw on to ensure projects are run safely and efficiently.
“While we are currently in the early stages of development, we will work closely with local stakeholders and the wider Shetland community, as we progress this project.”
Council leader Emma Macdonald said: “This project aligns closely with the principles we recently approved in ‘A Fair Share for Shetland’, which aims to ensure our islands and our community benefit as much as possible from the development of renewable energy projects in our area.
“There are a number of renewable projects either underway or in planning for Shetland, and it is critically important that we as a council do what we can to ensure the isles see a benefit if the projects proceed.”
The SIC said the development is also expected to create multiple operational and maintenance jobs, and generate further income for the council from the shipment of products through Sullom Voe harbour.
A spokesperson for Statkraft previously told Shetland News that construction is expected to begin in 2028/29, with a grid connection date of 2032.
Statkraft recently announced that it would stop development of new green hydrogen projects, but parts of its global portfolio, including “mature” projects such as Scatsta, will be developed further before the company seeks investors to take them forward.
There is also hydrogen development proposed for the nearby Sullom Voe Terminal as part of operator EnQuest’s plans to transform the site in the transition away from fossil fuels.
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