Shetland has signed a deal with the giant power company Vattenfall which might one day see the community part-owning lucrative wave farms around the islands.
At this stage the agreement between the council, Shetland Charitable Trust and Vattenfall is limited to co-operating and sharing information as the Swedish company seeks to establish its proposed 10 MegaWatt Aegir wave farm off the south-west Mainland.
In return the islands will benefit from the first-hand experience of developing a pioneering wave farm.
But Vattenfall’s managing director of ocean energy Veijo Huusko suggested in Lerwick yesterday that the community might co-invest with his company at a later stage if wave farms start earning “potentially huge” amounts of money.
Last month Vattenfall revealed its hopes of ramping up production off Shetland from the 10MW it plans to install in 2015, with 14 Pelamis machines, up to 40MW and then to 100MW or more in the years beyond 2023.
At the official signing of the deal in the Lerwick Hotel, Mr Huusko said: “The opportunities are huge and therefore we need somebody who is friendly from a community perspective to be there with us.”
The council and the charitable trust are already involved with another power giant, Scottish and Southern Energy, in developing the proposed Viking Energy windfarm, 45 per cent owned by the trust.
But representatives of council and charitable trust at the signing were keen to downplay the parallels that will inevitably be drawn. Councillor Bill Manson, the charitable trust chairman, said any notion of financial involvement in wave farming was a long way off and would have to be fully debated if the time came.
He said the trust was party to the Vattenfall deal to glean information and keep abreast of developments. He stressed that the agreement was “not a precursor” to a community-owned wave farm but he admitted he could envisage such a venture perhaps in 20 years’ time, possibly replacing all or some Viking turbines which would be coming to the end of their lifespan.
However, at the moment the only commitment was the use of an official’s time in assisting the Aegir wave farm, he said. Otherwise it was a case of “helping where we can, short of spending any money”.
Council development chairman Alastair Cooper said the local authority wanted to help build up the skills base to host a wave power industry and to get involved at an early stage to participate in the research and development of a fledgling technology.
But he agreed that Vattenfall saw Shetland as a community that was willing to invest in renewable energy ventures and he felt the council might be “well-placed” to participate “if the conditions are right”.
The signing of the public-private partnership is to be highlighted today by Scotland’s cabinet secretary for finance, employment and sustainable growth John Swinney by videolink at the first Dynamic Shetland conference on renewables at the Clickmin Bowls Hall.
The minister hailed it “a unique opportunity” to work with a major European player to benefit marine energy in Shetland and to encourage the emerging industry’s development “for the benefit of everyone, from the start”.
He continued: “This partnership is the first of its kind in this new and burgeoning industry with the focus on helping the entire Shetland community capture the economic and social benefits of its sizeable marine energy resource.”
The agreement is in the form of a memorandum of understanding, previously sanctioned by councillors in private at a recent meeting. It has been supported by Highlands and Islands Enterprise.
There is the possibility that other wave or tidal power developers could join in later, provided all parties give their consent.
Among the benefits that the council brings to the table from Vattenfall’s point of view are its skills and experience in handling the oil and gas industry.
The charitable trust is key to Vattenfall because it is involved in seeking an interconnector power cable to the Scottish mainland for the Viking windfarm. Without such a link to transmit power the Aegir wave farm would be killed off. This week’s deal means Vattenfall will have an inside track on progress with the interconnector.
Vattenfall’s ocean energy manager for the UK and Ireland, Harvey Appelbe, said a close relationship with the community and the benefit of local knowledge would help Vattenfall avoid mistakes, such as trying to go too fast or seeking to develop in inappropriate places.
He too thought that one day the community might become an investor in wave farming.
Cynics might say that Vattenfall has another benefit from the deal signed this week in the form of positive PR to be gained from the image of an international power company marching towards a green future hand in hand with a tiny and remote community.