Shetland: A Case Study for a Sustainable Future

Introduction

The current energy crisis has sparked heated debate around Europe and the world about the role of renewable energy and fossil fuels. The war in Ukraine has brought into sharp focus the importance of a sustainable energy supply. Additionally, with the climate crisis looming in the background, renewables undoubtedly will have a greater role to play in our energy generation system in the future.

When considering renewables and long term energy security, conversations do not often turn to Shetland. On the face of it, the archipelago is one of Europe’s fossil fuel poster boys. The islands are home to Europe’s largest Oil and Gas terminal, the economy is dominated by the high carbon activities of fishing, agriculture and tourism and the ferries along with air travel are only ways to travel both within and o the islands. To add to this, peat is still traditionally cut for fuel, as with many remote communities the housing stock is poorly insulated and islands electricity comes from a diesel power station. It is often said that the locals ‘sweat diesel’. More recently this has come to a head, prior to government intervention in household energy prices, locals were worried that energy bills could rise above £10,000 per year. This in an area that already experiences some of the highest fuel poverty within the UK.

Even prior to the current energy crisis, the Scottish Government has attempted to wean Scotland’s islands o fossil fuels. In May this year it was announced that 6 of Scotland’s islands would take part in the Carbon Neutral Islands Project, where it is hoped they will reach net zero by 2040 – 5 years before the mainland’s target. One of the islands chosen was Yell, the second largest island in Shetland.

While this progress should be applauded, non-governmental bodies have loftier goals in their sights. Despite the reliance on fossil fuels, Shetland has huge renewable energy potential; being the windiest place in the UK has at least one advantage!

Renewable Energy Projects

There are already a number of renewable energy projects established or close to completion in Shetland. Most notably is the Viking Wind Farm project on the mainland, which once completed will be the most productive onshore wind farm in the UK. There are also the proposed Beaw Field and Energy Isles Wind Farms, both in Yell, which have huge electricity generation potential. Away from onshore wind, three sites in the Crown Estate’s Scotwind leasing scheme were let in August and a further consultation relating to o shore wind potential to the West of Shetland as part of the Marine Scotland Targeted Oil and Gas Decarbonisation project is taking place. Additionally since 2016, Shetland has been home to the first tidally produced electricity in the world which has recently been expanded to provide EV charging facilities in Yell. What this demonstrates is Shetland’s huge renewable energy potential, far greater than the island’s demand, which has been unlocked by the installation of a new underwater interconnector linking Shetland to the Scottish mainland and therefore the national grid.

This is where the ORION Clean Energy Project comes in. ORION is a multi-sector project bringing together government agencies, private enterprise and the Shetland Islands Council. The project is separate from the central and devolved government and has far more ambitious aims than those outlined by the Scottish Government in the Carbon Neutral

Colin J Bathgate Solicitor Harper Macleod LLP LLB (Hons) DipLP MPhil

Islands project. ORION seeks to bring together the major renewable projects in Shetland to work towards a common goal. Furthermore it seeks to repurpose the existing oil and gas infrastructure in and around Shetland for the production of hydrogen and the storage of Co2 in the existing oil wells. With the infrastructure already existing, these projects become significantly more viable than they otherwise would be. Additionally, Solum Voe Oil and Gas terminal is ideally placed to be repurposed for hydrogen generation. There is the potential for the tankers that currently export gas from the terminal to continue operating, however exporting hydrogen.

Other Opportunities

Additionally there are possibilities not covered by the ORION project. While renewable energy is vital in the journey to net zero, there are other aspects that have potential to succeed in the context of Shetland.

A reliable supply of clean, a ordable energy produced on Shetland would mean that the usage of peat as a fuel could be reduced. Healthy peat has the potential to sequester significant amounts of carbon that would otherwise have polluted the atmosphere. Peatland restoration projects are being conducted all over Scotland and ‘credits’ of sequestered carbon sold to polluters under the Peatland Carbon Code. Therefore not only would keeping peat in the ground reduce emissions, it could result in valuable revenue for landowners whose counterparts on the mainland are already exploiting.

Electricity generation does not need to be on the huge scale that is planned by ORION. O grid communities have long had to fend for themselves and innovation is invaluably borne from necessity. Some of Scotland’s most carbon e cient communities are some of its most remote, with the island of Eigg recently in the news for producing 100% of its electricity from renewable sources. In Shetland the islands of Fair Isle and Foula are also o grid, and have the potential to generate their islands electricity demand renewably. Lessons can be learnt from such remote communities on how to transition to renewable supplies. Additionally the Community and Renewables Energy Scheme administered by the Scottish Government where subsidies are available for local groups to develop renewable installations.

Conclusion

While this article has focussed on Shetland, the islands provide a case study for other areas around the UK. While not every area has the onshore or o shore potential that Shetland does, what it does demonstrate is what can be achieved when organisations think beyond government targets. The ORION project brings together the public and private sector, free from central government oversight, to work collaboratively to create a true world leader in renewable energy.

This integrated approach, if successful, has huge economic potential for the multinational companies involved in the project. While at the same time, it could transform the lives of the people of Shetland by providing them with highly skilled employment and a cheap, secure energy supply. Opportunities are also available for small scale landowners and communities in the shape of subsidies for natural capital grants for small scale renewable energy generation. If these opportunities are taken up, a truly ‘just transition’ for the benefit of everyone could be more than mere political rhetoric and result in tangible economic and social benefits for local people.

Shetland shows what is possible when organisations from across the public and private sector work together and look beyond government targets. It also shows what local people and communities can achieve if they work together. The possibilities are potentially huge and can be replicated throughout the UK.

Harper Macleod has had a presence on the islands since October 2015, but our connection to Shetland stretches back more than 40 years.

Our o ce in Lerwick provides access to a full range of legal services for businesses and individuals, as well as the islands’ largest estate agency and conveyancing practices.

We are one of Scotland’s largest independent law firms, with a unique footprint across the Highlands, Islands and Moray. We specialise in a range of services including those contributing to Shetland’s modern rural and marine economies. This includes corporate advice, banking, crofting, renewable energy, agriculture, employment and commercial property.