IN THE third and final part of his series on the proposed Viking Energy windfarm, PAUL RIDDELL examines the financial impetus behind the project, the interconnector between Shetland and the mainland, the issue of peat disturbance and the impact on local democracy.
WHILE the windfarm project goes to the heart of Shetland’s future identity, it is being driven by a desire to preserve the prosperity bequeathed by the oil era now passing in fits and (maybe) starts.
In teaming up with Scottish and Southern Energy, the council is at least implicity attempting to answer the question: how does a post-oil era Shetland maintain the standard of living – in social care, in leisure facilities and in arts and heritage – to which it has become accustomed?
North Sea oil production peaked in 1999, and although the French firm Total wants to construct a gas pipeline from the Laggan field west of Shetland to Sullom Voe, which would prolong the life of the terminal and the employment and financial benefits it brings to the community, the UK government has so far opposed the project.
The support of Scotland’s First Minister and a re-organisation of Whitehall departments may alter the government’s view, but won’t alter the fact that Shetland needs to look beyond oil.
The contraction of oil revenues means the income streams that gave the Charitable Trust’s and the SIC’s reserves the rosy glow of rude financial health have more or less dried up. And, as the havoc wreaked by the global financial crisis on these pots of money suggests, a substantial influx of fresh cash is often more preferable to a stagnant fund invested in equities.
Take a look at some of the organisations and projects funded wholly or in part by the Charitable Trust and you get a glimpse of a potentially very different Shetland: Shetland Arts (which is getting £755,000 this year), Shetland Recreational Trust (£2.9 million), Disability Shetland (£12,933), The Swan Trust (£47,900), Shetland Folk Festival (£16,800), Shetland Fiddle and Accordion Festival (£12,000), Shetland Amenity Trust (over £1 million), COPE Ltd (£145,000), care home places (over £3 million), grants for senior citizens (£53,000) and the Christmas grant scheme (over £1 million and more if the Inland Revenue judges it not to be a charitable payment).
Without these bodies and benefits, the population would almost certainly fall as people sought work elsewhere; economic activity would drop, and the isles may even enter a vicious downward spiral.
This raises the question, why does it have to be a windfarm? Why not something else? In ploughing resources and effort into a proposal that will forever alter the landscape of north central Shetland, is the council not guilty of squandering other potential opportunities for economic development in Shetland?
In a small island group where the economic margins are very tight and where economic diversity is circumscribed by limited, declining resources of oil and fish and a climate and geographical location inimical to large-scale agricultural production, it is difficult to see where other potential opportunities of the right scale are going to come from. Opponents argue that Shetland should be developing many small-scale renewables projects to harness the wind and other natural energy resources; this is certainly happening. But to earn large sums of money, argue those in favour, we need to export this energy in vast quantities.
The Windylights 2 brochure produced by Viking Energy states: “Shetland Islands Council decided to pre-empt the external developers and investigate the concept [of a windfarm] to see if harnessing of Shetland’s unique resources could be done for local benefit (as was done with the oil industry in the 1970s). Shetland’s involvement as a developer as well as host gives the Shetland community a level of control. If, as a community, we get it right, we can have full public consultation, proper environmental awareness and the growth of a local industry with a genuine competitive advantage …
“The Viking windfarm offers the prospect of annual returns that could transform this community’s ability to fund existing services and provide new services in the future. Without new sources of income, Shetland Charitable Trust could soon find itself with a shackled, standstill budget or having to make swingeing cuts in existing services to pay for new ones. Not least of the demands in the future will be a need to care for an increasingly elderly population.
“A project like this can provide an average of £18 million every year in profits … it would double the trust’s income. That money could either be invested directly into the fabric of this community or laid by and reinvested for use by future generations.”
Viking Energy director and councillor Allan Wishart puts it starkly: “If we want to live in the kind of Shetland we live in now, we are going to have to find a lot of money to sustain these services.”
For Sustainable Shetland chairman Billy Fox the council does indeed have a moral responsibility to provide services. “The problem here lies in the scale of this project and the location. Comparisons to Sullom Voe made by Viking Energy and the council are unrealistic and quite frankly irresponsible. The risk to our environment and the probable knock on effects to tourism, property prices and people’s quality of life, plus the very real financial risk, do not merit us pursuing this project. “Yes we have a great wind resource in Shetland but we are also a very long way from the markets. A ‘world class’ wind resource would be matched by a ‘world class’ price tag for building, connecting and transmitting this power.
“The scale of the civil engineering is enormous, and we feel it is not being fully recognised by Viking Energy. It is not a local authority’s job to take risks with community funds; what is needed is astute management of what are considerable funds that are the envy of every local authority in the land. Putting all our community funds (the initial capital and quite likely underwriting the overall debt) into a single project is just reckless in the extreme.”
IN ORDER for Shetland to gain revenue (the precise figures are a very long way from being determined, dependent as they are on the level of transmission charges and the unit price paid for the electricity under the long-term contracts Viking would be looking to sign) the crucial link in the chain is the interconnector to the Scottish mainland.
That, if approved by the electricity regulator Ofgem, would be built by Scottish Hydro-Electric Transmission Ltd (SHETL), a subsidiary of Scottish and Southern Energy.
It proposes to construct a substation in the Kergord valley to convert the alternative current (AC) produced by the wind turbines to the direct current (DC) necessary for long-distance transmission linked to a 4.3-mile underground cable to the shoreline in Weisdale Voe.
From there, a 200-mile subsea cable would transmit power to Portgordon on the Moray coast. A further underground cable would carry the current to Blackhillock near Keith and into the national grid (see map).
SHETL is legally bound to maintain an “efficient, co-ordinated and economically viable” electrical system in the north of Scotland and to ensure power plants can link to the national grid. However, it must also ensure any cables are “environmentally considerate” and are “not unecessarily expensive”.
Estimates for the interconnector vary depending on the number of cables – one; two to allow power transmission to and from the national grid; or three to ensure back up in the event of failure – but £500 million is probably a conservative figure. The cost will be borne by SHETL, which in turn charges for transmission; so we will pay in the end.
A spokeswoman for SHETL said this week it was likely to be well into next year before final proposals are submitted to Ofgem for consideration.
ONE OF the most contentious aspects of the Viking project is the inevitable disturbance to the peat that covers most of the land area in question, which prompts accusations that the windfarm will actually cause more harm than good to the environment.
Peat is a superb store of carbon dioxide; if drained or disturbed, the carbon dioxide is released into the atmosphere.
A recent study of windfarm development by scientists from the Macaulay Institute in Aberdeen and the University of Aberdeen suggested that if damage to peat was minimised the loss of carbon dioxide during construction would be made up for within just under two years. In the worst case scenario the so-called “payback” time would be 32.5 years – longer than the lifetime of the Viking windfarm, which is estimated at 30 years.
Politicians such as the Conservative MEP Struan Stevenson have campaigned for a moratorium on windfarms on peatlands on this basis, although he has been accused of propagating “bad science, myth and the misconception that there is no carbon benefit in developing these projects” by Jason Ormiston, chief executive of the industry trade body Scottish Renewables.
Mr Stevenson’s fellow MEP Alyn Smith, of the SNP, said recently: “Struan has had some good sport on this, but I think it is time to stop showboating and come clean. If he does not like windfarms then let him say so rather than inventing pseudo-scientific distractions. There are plenty of real issues around windfarms and Struan is simply not being constructive.”
A more practical approach would be to consider the merits of each project.
Viking project officer David Thomson is confident that the environmental impact assessment which will be published as part of the planning application will demonstrate that the windfarm will cause minimum disturbance to peat – and in some places restore peat to areas where it has been eroded naturally.
While quarries will have to be dug, access roads built and bases for the turbines constructed, he says the disturbance caused will be more than made up for by improving the condition of peat elsewhere.
“There are bits in very good condition, but the tops of the hills are mostly eroded. We have brought in substantial additional expertise to look at improving the condition of peat here. Our aim is to ensure that the area continues to be a net sink for carbon. We have spent a lot of time and effort on this.
“The design team has developed a network of access tracks which is as small as it can practicably be, with the minimum disturbance to peat cover.”
Billy Fox is unconvinced. He cites the view of the executive director of the United Nations Environmental Programme, Achim Steiner, who has stated that “the conservation and improvement of existing peat habitat is one of the most cost effective ways we can mitigate against global warming”.
He is critical of Viking Energy for immediately seizing on the best estimate in the Macaulay study of payback in 1.9 years. “What they failed to look at was the example given at the other end of the spectrum which showed the payback time could be as long as 32.5 years. The real debate is: where does the Viking Energy proposal lie within this spectrum?”
He also takes issue with those who say that the areas where the turbines are to be located are unloved and unvisited.
“Remarks have been made that the proposed wind farm area is ‘a bleak barren desert’; this is far from the case. The area in question represents the largest undisturbed area of peat moorland and blanket bog in Shetland. In mid-summer it teems with flora and fauna. I would challenge any of our councillors to walk from Kergord or Lunklet Burn to Voe in mid-summer and dismiss this as a barren landscape.”
Tourism, Mr Fox believes, will be badly hit by the spectre of huge steel turbines dominating the landscape.
WHEN I visited Donnie and Evelyn Morrison, who were featured last week, they were critical of the impact the Viking project was having on local democracy. Councillors like Allan Wishart, Bill Manson and Frank Robertson, who are involved either directly or through their membership of the charitable trust, the Morrisons and others argue, have been disenfranchised: they can no longer represent their constituents.
“We have three councillors here in the West Side and only one of them can represent our interests, but we don’t know what Florence Grains thinks of the project,” said Donnie. “We feel isolated on this.”
Allan Wishart has visited the Morrisons to try to address their concerns, but as a director of Viking, albeit one with a sympathetic ear, he was seen as one of the enemy.
Surely it is incumbent on councillors to offer their views on what would be a colossal civil engineering project that would change the very essence of Shetland?
Despite visits and consultations last year by Viking Energy, many people in the areas that will be affected by the turbines feel that their views are not being taken account of.
Much of the tension arises as a result of the lengthy period of time that massive projects like this take to go through due process: consultation with individuals, consultation with different social and environmental organisations, planning.
Besides consultation with individuals during meetings Viking has consulted with environmental organisations such as Scottish Natural Heritage and the RSPB. The latter has faced public criticism for opposing the giant windfarm in Lewis in the Western Isles, which was blocked by the Scottish government earlier this year, and yet seemingly being comfortable with the Shetland scheme. It remains to be seen whether that is indeed the case. Viking, quite rightly, has pointed out that “both agencies completely reserve the right to object to the project during the planning process”.
The planning application is due to go in either by the end of this year or early next year. Until then, and the associated publication of all the various studies being carried out by Viking and independent experts, discussion will continue to centre around an incomplete picture. The planning process is likely to last up to a year.
As noted earlier, SHETL will seek approval from Ofgem for the interconnector some time next year. It is not known how long Ofgem will take to decide.
THE Viking windfarm has further to travel on the road to fruition than it has so far. To succeed, it will rely on three crucial factors falling into place. Firstly, SHETL must secure consent from Ofgem for the interconnector. Without that, Shetland cannot export electricity to the national grid, the very raison d’etre of the project.
Secondly, planning permission must be granted by Scottish ministers. Thirdly, the cost-benefit analysis has to stack up: the transmission charges Viking will have to pay SHETL must be low enough and the unit price good enough to ensure the scheme is highly profitable.
The $60 million question will be whether, if these three conditions are met, and the environmental and social and health impact assessments are favourable, it will ever win local support? Short of a full-scale opinion poll being carried out, it is difficult to be sure of the extent of support/opposition in the community. There are zealots on both sides, but what does the normally disinterested majority think?
As I said at the outset of this series, the scale of division in the community is worrying. Whether that is lessened, or simply exacerbated, by the publication of new information remains to be seen.
Viking has already scaled down the number of turbines slightly and moved their proposed location into areas that are perceived to be less visible to those living nearby, behind hills etc.
It is surely not idle speculation to wonder whether the company may go further in this direction. After all, the most common, and most bitter, complaint about the windfarm is that it is just too big. Why not 100 turbines instead of 154?
? In last week’s article I confused the theoretical efficiency of a wind turbine calculated by the scientist Albert Betz with the amount of time a turbine is likely to produce energy.
They are separate measures. The point I was trying to make was that Shetland is a windy place – hence the logic, all other things aside, of building a large-scale windfarm here.