The winds of change

Ambitious plans are being advanced by Shetland Islands Council for the transition to clean sources of alternative fuel production.  Douglas Irvine, Executive Manager, Economic Development, discusses the far-reaching plans for renewable energy in Shetland. 

Over 1000 people work directly and indirectly in the oil and gas industry and related occupations. In addition to the essential oil and gas work, Shetland is also very heavily dependent on the use of hydrocarbon fuels for all aspects of life in the remotest community in the UK. The economy is marine based with fishing, aquaculture and sea transport being particularly heavy users of hydrocarbons. On land there are no trains so all transport is by road and access to the nine smaller populated islands is by ferry crossing. Mains electricity is generated from oil and gas fuelled power stations. 

As a consequence, Shetland’s reliance on hydrocarbon fuel sources is enormous with a carbon emission count that is the highest per capita in the country. And all fuel has to be transported to the isles in coastal tankers leading to the cost of fuel being 10% to 20% higher than in populated mainland centres. These factors combined mean that Shetland experiences some of the highest hydrocarbon fuel prices in the country and consequent high levels of fuel poverty, while, ironically, being a main production centre for unrefined hydrocarbons.  

It is a situation that has to change and ambitious plans are being advanced by Shetland Islands Council and a number of partner organisations for the transition to clean sources of energy. Investigating wind sourced hydrogen development is a key part of the plans for that transition, which are being progressed in line with the Scottish Government’s guidelines for Just Transition.

Wind Energy

It is the phenomenal wind resource around Shetland that provides the impetus for change. The wind resource in the Shetland region is the strongest in Europe and that is why Scottish and Southern energy are currently developing the Viking Energy 450 MW wind farm with a 600 MW interconnector to the national grid sanctioned for completion by 2025. That will join Shetland to the national grid for the first time. 

Together with the existing small wind farms on Shetland, and considering the others projects being planned, the prospect is for around 750MW of land-based wind power to be available by the middle of the decade. The possibility of wind development offshore has risen with the ScotWind Licencing round including a 2 GW site to the East of Shetland. 

Hydrogen as an Alternative Fuel

Shetland’s new focus is to pursue the development of measures such as alternative fuel production in the isles as a significant source of energy, to compliment the renewable electricity, wind and tidal power developments that are in progress, and to meet targets for reduction in energy use. At present, renewable sourced hydrogen is internationally regarded as the most likely alternative to hydrocarbons in a range of uses where direct energy from renewable sources are not suitable. 

These future energy ambitions lie at two very distinctive levels. The first level concerns the energy development options, including hydrogen production, for Shetland to remain a national energy hub with high levels of industrial scale production to meet national and international energy demands. That is the reason behind the ORION Project, described below. The second level of activity is to provide the hydrogen fuel for local domestic, commercial and service needs and that work is being done under the title of the Shetland Clean Energy Project.

Shetland’s approach to these diverse scales of development are of course very different. The large-scale ORION Project promotes the hydrogen production opportunities in and around Shetland to potential energy industry investors. At the local development level the approach is a hands-on one, taking projects forward in partnership arrangements with known local businesses, a clearer customer base and a well-established hydrogen production adviser. The Pure Energy Centre in Unst has over 15 years of experience assisting and guiding hydrogen development projects in the UK and beyond. But none in Shetland so far

The ORION Project

The ORION project (Opportunities for Renewables Integration with Offshore Networks) is a national scale endeavour, which is a partnership between Shetland Islands Council and the Oil and Gas Technology Centre in Aberdeen, and involves Highlands and Islands Enterprise and the Oil and Gas Authority. The Project aims to achieve a net-zero transition of the nationally important oil and gas provinces around Shetland. 

This is to be done in stages working towards industrial-scale green hydrogen production by 2050. The project is founded on a combination of the abundant wind and tidal energy resource in Shetland with the remaining oil and gas reserves and the existing oil and gas infrastructure. It includes shore based green electrification of offshore oil and gas production, blue hydrogen production with carbon capture and storage, repurposing offshore installations for green hydrogen production, and redeveloping the Sullom Voe Terminal and Shetland Gas Plant to manufacture and export alternative fuels such as ammonia and methanol. 

The ultimate aim of the project is to ensure Shetland moves beyond the capacity of self-sufficiency in cleaner energy, to be capable of exporting renewable energy into the national grid and offshore, significantly contributing to the UK hydrogen demand, and helping develop offshore carbon capture and storage projects.  The ORION project is a transformational shift for Shetland and the surrounding oil and gas province, which will benefit the local community, the wider supply chain, long-term security of employment, and energy security of significance at a regional and national scale. 

The objectives of the ORION project are:

• By 2050 supply 32TWh of low carbon hydrogen to UK consumers annually which is 12% of the expected UK total requirement;
• Produce green hydrogen, utilising wind and tidal energy, to fuel domestic heating, road, and marine transportation;
• Provide more than 3GW of wind generated electrical power to Shetland, the UK grid and electrification of the offshore oil and gas sector;
• Enable all West of Shetland hydrocarbon assets to be net zero by 2030 and abate 8Mt/year CO2 by 2050;
• Generate £5bn in annual revenue by 2050 and contribute significantly to the UK Exchequer;  
• Provide sustainable employment for 1,750 people, both regionally and locally, whilst maintaining a pristine environment.

The first steps towards achieving these objectives are to obtain funding to undertake initial research and feasibility studies into a number of the development options. An application has been made to the Scottish Government’s Energy Transition Fund for support and the project team is seeking match funding from interested energy sector businesses. 

The Shetland Clean Energy Project (SCEP)

At community level, the guiding vision is to support the transition towards providing clean sustainable energy for Shetland’s own future requirements. The preferred approach is to start commercial hydrogen production in a small way with up to 4MW of production at three sites where constrained wind power will be available. Potential early customers include Shetland Islands Council, which is investigating the use of hydrogen for fuelling larger vehicles, ferries and other marine craft, and for heating purposes. Other potential customers include the Lerwick District Heating Scheme, aquaculture businesses and road haulage. 

SCEP is part of the Islands Deal Net Zero Energy Centre project, which is an integral part of the Islands Deal with the UK and Scottish Governments.  Working in partnership with Orkney and the Western Isles, Shetland is promoting SCEP as one of the island energy projects to benefit from Islands Deal funding.

Networking

Shetland’s ambition to transform energy production and use in the islands, with the inclusion of hydrogen fuel as part of the energy mix, needs to draw on the experiences of other places and organisations. Stakeholder engagement to develop and share learning and knowledge on hydrogen production is an essential part of the transition to alternative sources of energy. Joined up working through the Islands Deal process has enabled sharing of ideas with Orkney and the Western Isles. 

Shetland Islands Council has also joined the Scottish Hydrogen Fuel Cell Association, the DeepWind Offshore Wind Cluster, the North East Carbon Capture and Storage Alliance, the North Sea Hydrogen Ports and Maritime Community and is in the process of joining a number of other collaborative organisations working in the alternative energy sector. The work of the APSE Scottish Renewables and Energy Efficiency Advisory Group provides another important opportunity for Shetland Islands Council to strengthen relationships with all member Scottish Councils with an interest in promoting hydrogen development in their areas.

 •      Douglas gave a presentation on Shetlands renewables ambition at the APSE Scotland Renewables and Energy Efficiency Advisory Group on 3 November 2020.  The presentation can be downloaded here.