18th October 2018
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Carmichael wants joint effort on grid connections

5 comments, , by , in News

A combined effort is needed between governments, regulators and the private sector to secure grid connections for the isles – according to isles MP Alistair Carmichael.

Speaking at the Green Investment Bank conference this week, Mr Carmichael said any failure to act on grid issues post-referendum would be a “missed opportunity of tragic proportions.”

He said: “Last year the coalition government also announced a specific strike price for Scottish Islands which will help to unlock their renewable potential.

“That was a welcome and necessary step and it established an important principle. It provides, however, only a mechanism for supporting generation capacity once it is installed.

“Without grid connections for the islands we shall never see that capacity installed and the potential for the generation of tidal and wave power will not be realised – or at the very least it will not be realised here.

“Other countries have their eyes on the same prize so now, with the referendum behind us, I want to see all the effort of Scotland’s two governments, along with the regulator and the private sector, focused on making this happen. Not to do so would be to invite a missed opportunity of tragic proportions.”

On the work being done by the Green Investment Bank, Mr Carmichael added: “In its first two years, the UK Green Investment Bank has backed 34 projects, directly committing more than £1.4 billion and bringing alongside a further £3.5 billion of additional private sector capital.

“The marketplace remains challenging but I am confident the bank will continue to go from strength to strength, mobilising much needed investment.”

About Ryan Taylor

Ryan Taylor has worked as a reporter since 1995, and has been at The Shetland Times since 2007, covering a wide variety of news topics. Before then he reported for other newspapers in the Highlands, where he was raised, and in Fife, where he began his career with DC Thomson. He also has experience in broadcast journalism with Grampian Television. He has lived in Shetland since 2002, where he harbours an unhealthy interest in old cars and motorbikes.

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5 comments

  1. John Tulloch

    Brace yourselves, Viking Energy and Windfarm Supporters Group, I think we all know what’s coming next – no cable!

    Of course Mr Carmichael will “fight his damnedest” to make them stick to their pre-referendum hogwash..er…promise to the “toothless” Our Islands, Our Future.

    (“Free beer…er…tomorrow,…we said, in the…er..fullness of time, following a.. er…comprehensive study!”)

    No? Then why does OFGEM need a consultation about saving costs on Shetland’s future electricity supply arrangements?

    If there was a grid connection on the way, Shetland would be generating its own electricity most of the time and when it wasn’t doing so, it would be importing electricity from the mainland grid, at mainland grid prices?

    Is this to be OIOF’s dividend for “not playing the oil card”?

    Shetlanders need command of their own resources, then if the future authorities want a grid connection, they will be able, easily, to afford to buy one.

    Reply
  2. David Spence

    John, I believe the Scottish Office refused to finance a cable from N/W Scotland to the Hebrides on the basis it would cost too much. I may be wrong, but a figure of around £720 million was mentioned. The distance from Shetland to mainland Scotland is 3 times the distance as previously mentioned. Using very basic maths, this would cost the Scottish Office just over £2.00 billion for the cable (I presume this would also incorporate a second or even third cable as backup?). If you include the cost of the Viking Energy Project, this brings the overall project to about £3.00 billion.

    I believe, yet again, the return for the Charitable Trust in being a (dreaded) Shareholder of the Viking Energy Project is between £20 – £23 million a year? Doing the basic maths again, this means the investment return for the CT, will be just under 1%. This does not take into consideration the costs to carrying out any maintenance etc to the wind turbines and infrastructures per year that may be necessary.

    Now, you don’t have to be a rocket scientist to realise that the Viking Energy Project is not, by any means, worthwhile investing in, given the rather abysmal return for the people of Shetland (aka CT).

    I would like to have a public inquiry as to who advised the CT in investing in the Viking Energy Project, People within and outwith the CT/VEP who would personally benefit from it financially. The amount of monies either individuals or companies, as a percentage, have invested within the VEP?

    Reply
    • John Tulloch

      Thanks David,

      From memory, I think I recall an article in the Shetland media which stated a contract had been let, provisionally (OFGEM consent awaited), to ABB of Sweden to install a cable and the price was reportedly about £0.5 billion.

      For those ready to jump in, I repeat, “provisionally” let, dependent on agreement from OFGEM.

      I hope someone will correct me if this price is wrong.

      I don’t have any knowledge of what the onshore plant and equipment at each end (the ac/dc conversion, transformers, switches, etc.), would cost but it would be considerable and two conversion substations would be required (one at each end), whatever the length of the cable, so I wouldn’t assume that trebling the length of the cable would treble the overall price, although, it would certainly bump it up, considerably.

      Reply
  3. David Spence

    Thank you John. I know my figures may be rather high, but even so, a figure of around £500 million for a cable connecting Shetland to mainland Scotland, one could, probably, easily double this figure if you take into consideration other large building projects. The Dome in London 5 times over budget, The Scottish Parliament 10 times over budget and the Trams fiasco in Edinburgh 3 times over budget.

    I know one shouldn’t necessarily use these as examples, but given the complexity of the engineering problems of laying a cable(s) onto the seabed, one could, probably, double if not triple the cost. I believe the cost of the Viking Energy Project was estimated to be around £600 – £700 million (excluding the cost of an Interconnecting Cable) again, you can probably double this figure for, lets say, unforeseen circumstances (but more than likely, material and productions costs going up, as well as the profit margin going up).

    I am highly sceptical of the costs being quoted for the VEP, which do seem to vary quite significantly from different times. Needless to say, the cost always going up.

    Based on figures for the VEP, it seems very obvious that this project is not financially viable in terms of the constant increasing costs projected for the project, and for the CT to persistently ignore questions being asked as to whether the VEP is worth investing in. As the costs of the project keep going up, one should question the CT’s involvement, and whether or not such a project will cripple the CT and, potentially, create more problems for local businesses and investment than going ahead with a project that is bleeding it dry, and is getting nowhere.

    Reply
    • John Tulloch

      As I understand it, David, they’re depending on someone else to pay for the cable installation, not the Viking Energy project and you’re quite right, if the project has to pay for it, it’s much less likely to go ahead, even with the inflated “Island Strike Price” for the output from it, arranged courtesy of Alistair Carmichael.

      That must always have been known to those involved in running the project, including when they asked SCT for £6 million, to continue developing it, however, I don’t recall the cost of the cable being mentioned as a concern?

      The cable being proposed would, of course, provide additional capacity for output, renewable or otherwise (e.g. gas-fired), on top of Viking Energy and I was surprised by the reported price, given the reports about cost estimates for the much shorter Western Isles link in the past?

      We’ll have to wait and see what happens about the cable being paid for by UK bill-payers but Alistair Carmichael sounds concerned.

      Reply

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