By BILL MANSON
It’s worth considering some aspects of the Viking Energy Partnership’s recently lodged consent application for a large-scale windfarm in central Shetland.
Shetland has some of the best natural energy resources in the world and yet we currently have no means through which we can effectively put the full potential of those resources to use – to do this requires a grid connection cable to the UK mainland.
The Viking Energy project is the key to having that connection put in place. A small renewable project (or projects) would not justify a cable and would therefore forego most of the financial benefits such a connection would bring.
As our energy hungry world is turning increasingly to renewables to meet its needs, it’s certain Shetland’s natural resources will be developed with or without our participation. The community element of this project is a huge positive for Shetland.
In 2003 Scottish and Southern (SSE), now our partner, was already investigating the possibility of developing a 250MW windfarm in Shetland. A number of other companies were also investigating the potential for large-scale wind power here in the isles.
One or more of these companies would have taken matters further had they not been pre-empted by the Viking Energy project, then owned by Shetland Islands Council. These investigations would certainly have led to one, but most likely two or three, actual development proposals by today, which would be unlikely to benefit Shetland on the same scale as the Viking Energy project.
There is much more to the project than “it would happen anyway, so why not” – there are a number of potential rewards for the community.
Shetland now has an enviable level of service in education, social care, roads and transport from which all residents benefit. However, income from the Sullom Voe terminal is now very much reduced and our services are largely supported by income from investments.
We wish to expand upon our present standard of provision of services but income from oil funds is already overstretched trying to maintain existing standards. It is anticipated that demand for service provision will increase; for example, there are well-researched estimates that provision of care places must be doubled over the next decade as our population ages.
Today, we have a chance of maintaining a secure financial future for Shetland. An equity stake held by Shetland’s community funds ensures that we have a say in what happens in this project and how it happens, not to mention a large share of the profit estimated at £23 million per year (after repaying interest and capital). This profit will go into helping sustain employment and opportunities for future generations of Shetlanders.
In addition to the financial return of the project into community funds it’s estimated that when you add in rents to landowners and crofting tenants as well as wages, business opportunities and other local benefits, the annual financial benefit to Shetland could be in excess of £37 million. We’ll aim to ensure that much of the money spent on the project will be fed directly back into Shetland’s economy and will benefit the people of Shetland. For example, VE have already approached the NAFC Marine Centre about developing an apprenticeship based HND course in mechanical and electrical engineering.
Payments will be made for localised community benefit. Collectively these will amount to well over £1 million a year. It’ll be up to the individual communities to decide how this money is handled. There will be prior consultation as to how this should be distributed.
For a community of 22,000 people, this level of benefit is very significant and is unlikely to be matched by any alternative developments.
How the financial returns, including those to Shetland Charitable Trust, are then used will also have significant beneficial impacts.
Irrespective of the economic benefits to be gained, many Shetlanders are very aware that the greatest environmental threat to both Shetland and the rest of the world is climate change. Shetland has always been an outward looking and forward thinking place; conscious of the world around us and willing to play our part. We can make a contribution to reducing our reliance on fossil fuels and set an example to other communities as to the benefits of producing clean energy.
Finally, it’s worth commenting further on the financial implications of the project. Though we consistently check our estimates, as is the case with any planning application, we cannot finalise these estimates. The source and terms of borrowed capital can only be arrived at after a satisfactory outcome to the consent application. However, with the application now submitted and the global market starting to settle down again after the upheavals of the credit crunch, more attention can now be concentrated on finalising these figures.
Any project, particularly of this size and complexity, cannot be successfully achieved unless it’s pursued by committed and enthusiastic people. Together with our partners from SSE, those working for the Viking Energy project have the necessary commitment and enthusiasm to achieve our goals. However we must stress that we will not be blindly carried away by said commitment.
Final decisions about this project will only made at after determination of the consent application. At that time estimates can be finalised; appropriate advice taken; and the risks and rewards of the final development can be fully assessed.
What’s required of the Shetland public at this time is to make their decision based on the documents submitted with the application. These documents can help folk to weigh up the potential environmental effects of the proposed development and the measures proposed to mitigate them, before commenting (for or against) the project.
Finally, I’d like to stress once again that sooner or later energy resources around Shetland will be developed – with or without local involvement or participation. I strongly believe that it will be better to have this happen sooner and with a real local influence than later with no community element.