The future of the Lerwick Power Station has been thrown into disarray following a move which looks likely to force its closure within the next four years.
Twenty-five permanent jobs are set to be lost following the decision, which also kills off the idea of any new power station being built.
Plans have instead been made for power to come via a 60MW subsea cable from Caithness. Back-up power will be dependent on a series of diesel-powered generators which will be brought into action in the event of a break in the cable.
It follows proposals in 2013 for a new power station in Rova Head. Brakes were put on that project when the energy regulator sought a competitive tendering exercise.
Now, Scottish and Southern Energy Network’s (SSEN) preferred bid proposed to Ofgem for the new energy solution is a joint project between National Grid Interconnector Holdings Ltd (NGI) and Aggreko UK Ltd. SSEN expects the 260km cable link to run from Dounreay to Scalloway. A further underground cable will go to Gremista in Lerwick, where plans are in place to have the back-up generators housed.
SSEN says that, once operational, the cable will provide a “reliable electricity network supply” for a minimum 20-year period.
A formal recommendation has been made to Ofgem to approve the proposal.
Public consultation will be carried out by Ofgem over the summer to give all stakeholders, according to a press statement, “including the people of Shetland” the opportunity to comment.
If approval is granted, contracts are expected to be signed this year, followed by a three-year delivery period before the cable becomes operational by the end of 2020.
SSEN’s director of customer operations, Dale Cargill, said: “We are pleased to have reached this important milestone in securing the future of Shetland’s electricity supply.
“Working closely with the energy regulator Ofgem, our priority throughout the tender process has been to find the optimum solution in terms of economics, efficiency and reliability to meet Shetland’s long-term electricity needs.
“We would like to thank all bidders who participated in the tender process for hte range of solutions put forward for consideration.
“Lerwick Power Station will remain operational until the new energy solution is established, expected during 2021, and during this period we are fully committed to maintain open, transparent and regular engagement with all affected employees and Trade Union representatives to discuss the options available when the station ceases to operate. This includes redeployment opportunities across other Scottish and Southern Electricity Networks operations on Shetland.”
However, Isles MSP Tavish Scott is not happy about the move. He met staff at the power station last week and was given the news yesterday that the plant would close. He has heavily criticised Ofgem’s ruling, insisting “good jobs” and the commitment of staff have been “sacrificed on the high altar of rightwing free market economics”.
“This is a disastrous policy for Shetland and we must not accept this very bad decision,” Mr Scott said.
“Ofgem do not care about local jobs, people or an island community. Ofgem are only interested in money. Our future energy needs will be dependent on a seabed cable.
“What happens when that breaks? We will then be reliant on a diesel generator. So much for security of supply. This is the ultimate in decisions made by faceless bureaucrats who don’t care about the islands.
“I am devastated for the 25 hard-working men and women who work for the Hydro in Lerwick and across Shetland. Five young apprenticeships depend on the power station as do five more contracting jobs. This team work hard for Shetland.
“This is the thanks they get. The power station puts millions of pounds into the islands’ economy. Why should these good jobs, and the commitment of the local Hydro staff be sacrificed on the high altar of right wing free market economics?
“Ofgem who know the price of everything and the value of nothing should be ashamed of themselves. Shetland will lose for ever these highly skilled, much valued positions. That is disastrous.”
Mr Scott added: “Shetland should oppose this bad decision. I will work with the islands council and other organisations who want better for our islands in this. Above all I will fight for the men and women who in a few years time, will be out of a job.”