23rd October 2017

Why not generate power locally? (John Tulloch)

The proposed new Lerwick Power Station at Rova Head was, at least, 50 percent bigger than necessary. It had double the capacity (120MW) of the latest 60MW subsea cable proposal which itself exceeds Shetland’s peak winter demand by about a third. The projected cost of the new power station was therefore excessive and it is little wonder Ofgem balked at the idea.

Q1. Why was the new Lerwick Power Station design so excessively over-sized?

Q2. What would be the cost of a ‘no-frills’, 70MW power station at Rova Head, instead of 120MW?

Q3 What would be the cost of a ‘no frills’, 70MW power station sited at Sullom Voe with upgraded (underground) transmission lines to Lerwick?

Subsea cable connections to Orkney and the Western Isles already existed when the former North of Scotland Hydro-Electric Board was privatised in 1991. By the mid 1990s, its successor company, Scottish Hydro-Electric, keen to cut costs, considered connecting Shetland to the Mainland grid by subsea cable and rejected the idea due to excessive cost.

That assessment was based on the power station using heavy diesel fuel, as now, versus importing cheap coal or gas-fired energy via a grid link. However, a new power station would now use very cheap gas – less than a third the cost of diesel fuel – from Total’s Laggan-Tormore gas field, in which SSE holds a 20 per cent stake, via Sullom Gas Plant.

Gas would cost a fraction of imported mainland renewable energy (Scottish coal power stations have all closed). So there would seem less incentive now than in the 1990s to install a subsea grid connection.

Furthermore, local generation would avoid substantial power losses associated with the very long transmission distance and AC-DC conversion in the proposed subsea cable link.

Finally:

Q4. What will be the capital cost of this proposed Caithness-Shetland subsea grid connection?

John Tulloch

Lyndon,

Arrochar.

17 comments

  1. Thomas Leask

    Sub sea cable is all fine and well until some poor fishing vessel dregs it up or severs it. Then the whole island is up a creek athoot a paddle.

    Reply
  2. James J Paton

    Mr Tulloch may be surprise to hear me praise him. His excellent questions, which due to a privatised industry, may never get answers, due to ‘commercial sensitivities’?

    I maintain that Shetland needs to look first and foremost at energy conservation, then at long- term sustainable energy production from a mix of sources.

    For me a key question, if gas is to be the ‘solution’, what happens when the gas runs out? Also how does Shetland off-set it’s CO2 emissions? Is carbon-capture in empty oil-wells a possibility?

    Although against the scale, and proximity to housing of the Viking Energy and related interconnector proposal, irrespective of Charitable Trust investment, now a non-starter?

    Additionally Shetland needs to work out and accept, that it’s energy costs will always be much higher, unless Government or a large corporate producer is prepared to subsidise with profits made on the UK mainland.

    It is a great irony with oil and gas production ‘on site’, although there were/are many reasons why the Council or an energy provider could not do a deal. I recall BP/Terminal partnership saying they could not guarantee supply. The Terminal power station has had only one, but quite a long, breakdown of production, (1980’s) when diesel had to be transported in.

    Ultimately I believe the Shetland community needs to take ownership of its own energy needs and provision. A tall order?

    Reply
    • Ali Inkster

      The gas west of Shetland will outlast any power station built to consume it.

      Reply
  3. Gordon Simpson

    With the technologies available, being installed around the world as we speak (type – whatever) I believe we could be self sufficient in power with little or no need for a gas turbine.
    Tesla provide (sell) large battery banks that can regulate the ups and downs of power generated from renewable sources. It wouldn’t take much calculation to find a level that provides for all, and allows for seasonal changes.
    The only reason they are determined to get an undersea cable here is to harvest our renewable energy source, to meet their own targets, to put the ugly turbines (hundreds of them) as far away from their own backyards as possible, to comply with international promises made no matter what the inefficiencies. Need I rant more?

    Reply
    • John Tulloch

      Thanks to JJP and GS for comments:

      Technology aplenty is, indeed, available. Sadly, it’s eye-wateringly expensive and consumers must pay.

      Onshore wind is the cheapest, practical, renewable energy. Utilities are forced to take it at 9p/kWh. Marine energy is even more expensive than offshore wind (12p/kWh), and also cannot provide constant supply. Energy storage is needed.

      The US National Renewable Energy Laboratory (2015) estimated utility-scale lithium ion batteries cost $300/kWh. That means a battery to supply Shetland for one winter day would cost around £140 million – on top of the cost of the renewable energy plant whose own cost would far exceed a gas power station.

      A 70 MW gas-fired plant should cost much less than the 120MW, Rova Head proposal (£200 million) and the marginal cost of the electricity should be no more than about 2p/kWh, to which must be added overheads like staff, maintenance, rent, etc., which benefit the local community.

      Gas supplies running out is a red herring. The cable or power station will last 20-30 years. Gas will remain plentiful long after that.

      Presently unaffordable solutions should be considered when they are needed or become economic, not before.

      Reply
  4. John Tulloch

    Peel Energy has two wind farm projects going through planning permission, Mossy Hill (49.9MW), roughly between the Brig a’ Fitch and Gulberwick and Beaw Field, Burravoe, Yell.

    The proposed cable could cater for either, but not both, of these wind farms.

    Beaw Field has the disadvantage of needing transmission lines, including a submarine cable across Yell Sound, to connect to the cable terminal at Lerwick. Mossy Hill, a couple of mies away, will have no problem.

    What wonderful luck for Peel Energy that a grid connection is coming to Lerwick at the very moment they came up with their Mossy Hill idea?

    Reply
  5. John Tulloch

    £millions per year will be lost to the Shetland economy if this grid connection goes ahead.

    It is by no means clear that this is the “most economic solution to Shetland’s future energy needs.”

    Reply
    • Jim Anderson

      John, interesting, exactly how many millions will be lost?

      Reply
      • John Tulloch

        Lerwick Power Station local expenditure isn’t public knowledge and a new power station would be different. However, permanent job losses, alone, will comfortably exceed £1Mpa. Add other losses like local contractors, transport and accommodation for visiting staff and contractors, other services and materials purchased, site rent, rates and water charges, apprenticeships, training and education and, potentially, waste heat and cheap gas fuel for the district heating scheme, etc, and it soon mounts up to a ‘pretty penny’ – £2-3Mpa, depending on design?

        A grid cable would enable connection of e.g. Peel Energy Mossy Hill wind farm, offsetting some losses however the handful of permanent jobs, work and expenditure would be a fraction of that for the power station.

        Given that 350MW Viking Energy will create 140 construction jobs versus the power station’s 400, the 49.9MW Mossy contribution will be small.

        The standby power details are unknown, quite possibly, 30-40 containerised, diesel generators, maintained at a central depot south and needing minimal onsite attention. That would also raise serious concerns re security of supply and emissions.

        The original Shetland power proposal included a grid cable with a new, permanent, standby diesel power station at Rova Head, well away from habitation.

  6. Ian Tinkler

    It is just a way of making Shetland dependent on Scotland for electrical supply and power, instead of the other way round. We need all we can here on Shetland not everything, including vital standby electricity generation. Why must everything be centralised to the mainland? Why do our elected councillors remain silent here? Powerless or just gutless?

    Reply
  7. John Tulloch

    The cost of the NGSLL-Aggreko cable is £303 million.

    The cost of SSE’s gas-fired Rova Head proposal, rejected by Ofgem for not being cost-efficient enough, was £200 million.

    Hang on, that’s £103 million more for the cable than for the power station?

    GIven that imported renewable energy is likely to cost in the region of 9p-15p/kWh versus, 2p-4p/kWh for gas-fired electricity, depending on the current gas price, where is the “cost efficiency” coming from?

    Reply
    • John N Hunter

      The SSE representatives at the event in Lerwick recently told me that they approached the gas plant for a quote when they were considering the fixed link but none was provided.

      Reply
      • Christopher Johnston

        That was an excuse, not a reason.

      • John Tulloch

        Don’t you find it a bit odd that SSE would do all that work – all the public consultations, etc., designing a state of the art gas power station, putting it through planning permission and applying to Ofgem to accept it as Shetland’s “new energy solution” – without any confirmation that a gas supply would be available?

        Not to mention that SSE is a 20 per cent shareholder in Laggan-Tormore/Shetland Gas Plant?

      • Christopher Johnston

        John Tulloch, as Hamlet’s mother said, “The lady doth protest too much, methinks.”
        I suspect SSE went through the exercise as a political maneuver so they could tick off a box on a lawyer’s list of smokescreens to cover their real goal – a large capacity undersea cable from Shetland to the mainland, with a converter station at each end, at minimal or no expense to them.

  8. ian tinkler

    I do not believe that value for money is remotely on the agenda here. It is either that the Green Lunatics have completely taken over the asylum or that some influential money men are manipulating a financial killing. As always, all of our political leaders are not finding the time even to voice an opinion. I wonder why so silent? Could it be they are afraid to voice an opinion or too ignorant to hold one?

    Reply
  9. Haydn Gear

    They are all afraid of saying the wrong thing Ian. After all , there will be money at stake and it will be considered prudent to keep it zipped.

    Reply

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