Editorial: The Old Rock 29.8.08

Power subsidy should be obvious

WHATEVER your view of the proposed Viking Energy windfarm development, the news this week that the government will not place a cap on the cost of exporting electricity from projects of its kind to the UK mainland was greeted with a surprising degree of equanimity here.

On the face of it, such a cap would be ridiculous, serving to plough millions of pounds of additional public subsidy into the coffers of already hugely profitable energy companies (the very issue behind the latest revolt by Labour MPs against the Prime Minister).

But as ever with the energy market, it is much more complicated than that. In order for a project of the magnitude of Viking’s to be successful – and, let’s not forget, potentially bring a strong return on investment for Shetland – we do need, as Aaron Priest says in our story today, clarity on the scale of transmission charges. It is possible that the lack of a cap could render the entire project uneconomical.

From the government’s point of view, with carbon dioxide emissions continuing to rise and eye-watering targets for the amount of electricity to be generated through renewable resources by both 2020 and 2050, it ought to be obvious that a subsidy to import power from the windiest areas of the country would make sense, particularly against the backdrop of the potentially massive public investment proposed for the next generation of nuclear power stations.

Meanwhile, it was heartening to hear of the vast array of smaller scale projects already under way in Shetland in the report for last week’s development committee written by business development official Maurice Henderson. For example, builders are to be on site in Eshaness later this year to construct the world’s first hydrogen fuel cell houses in a partnership between Hjaltland Housing Association and the PURE energy centre in Unst.

If successful, and marketed properly, ingenious projects like these could become valuable exports for Shetland. They have the great virtue of not being at the mercy of government whim.


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