16th November 2018
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Lerwick Power Station set to close with loss of 25 jobs by 2021

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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.”

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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  1. ian tinkler

    Here we are sitting on a vast resource of natural gas, albeit a fossil fuel, which is being exported overseas. Where without a doubt, it will all be burnt. Why do we not use it ourselves? It is on tenth as polluting as oil, a fraction of as environmentally damaging as wood chip incineration with less than on tenth the greenhouse gas emissions. It is here, it is cheap, and it is clean. Whoever burns it, Shetland or overseas, the carbon dioxide emissions (greenhouse gases) will be identical. The truly ignorant Greens and scientifically illiterate politicians have to pursue utter stupidity of a flawed renewables policy. (I fully support renewable energy, based on sound science, however, not this idiocy!)

    • George Penman

      Free enterprise doesn’t care about the locals or local economy it’s sole interest in life is to make more money for the rich.

  2. John Tulloch

    This is madness. A similar cable proposition in the 1990s was estimated at £100 million, so how much is this cable going to cost?

    What on earth would be wrong with generating power using gas from Sullom Gas Plant at a fraction of the cost of other forms of generation, without the need for a very expensive submarine cable?

    This is a result of the current obsession with what David Cameron rightly referred to as “green crap” and very little to do with economics. It has stemmed from the obsession with turning Shetland into a colossal ‘aircraft carrier’ of wind turbines which, in turn, incentivised the production of associated alternatives e.g. new Lerwick Power Station, to be as expensive as possible.

    So, is Viking Energy now “dead in the water”, or is this a ‘Trojan Horse’ – establish the principle of a cable and then make it bigger, later on?

  3. Gordon downing

    The loss of 25 jobs and a rise in electricity bills. Typical profit before people

  4. John Groat

    If I am correct at present a large percentage of Shetlands electricity comes from sullom terminal, I see no mention about this in the press release , is it to be done away with in future

  5. Avalina Kreska

    What happened to the Nines Project? It looked good on paper…

    • John N Hunter

      The NINES project has increased the use of renewables for power generation from below 10% to nearly 30%. There have been articles on it in the local media recently.

      • John Tulloch

        May we see the calculations, please, and the dates and times on which the associated data were taken?

        I would be extremely sceptical about the validity of this claim. If it all worked perfectly, they might manage that during the summer however there isn’t enough renewable power to supply a third of Shetland’s energy over an extended period in the winter.

        And at £18 million installation cost to supply 234 houses (“HOW MUCH?”), it seems a bit pricey, even for a green boondoggle. I make that £77,000 per house.

        What concerns me is whether the cost of this nonsense is included in figures for the amount by which Shetland’s electricity is subsidised by Mainland consumers?

        Because that figure is being used as part of the justification for Viking Energy.

      • John N Hunter

        There is a hell of a lot more to NINES than installing hot water tanks in 234 houses. There is also the rechargeable battery at Lerwick Power Station. These act as reservoirs to absorb energy when it is generated to allow the power output from renewables to be balanced on the network.

        The big problem with renewable energy is that it is produced at random times that do not match demand. It also is very spikey so needs smoothing.

        In Foula the system there used surplus windpower to pump water to a hydro plant so that power was always available. The geography of Shetland means you can’t have a have a major hydro scheme here so more innovative solutions are needed.

      • Johan Adamson

        John T the NINES project always seemed a good one, retro fitting insulation and air source heat pumps to older property to save tenants money on fuel and improve their heating. The SIC had the opportunity to do this too, but Neil Grant declined. Surely if we all had air or ground source heating we would all reduce fuel consumption? I would much rather have people in energy efficient housing, especially here in Shetland.

        It is expensive, however. Our ‘big reverse fridge’ plus associated plumbing cost a fortune, which we probably wont get back in our lifetime and I would think the price of the heat pumps would go down as soon as the grants and feed in tariffs are reduced – like the cost of solar panels have done.

      • John Tulloch

        Don’t forget, SOMEBODY has to pay for all this green self-indulgence and the cost of it goes straight to consumers’ bills, including those 50 percent of Shetland homes already in fuel poverty. Expect that figure to rise.

        Those installing heat pumps, solar panels, etc., are being subsidised by other consumers, often in poor quality, rented accommodation who will be the last to have their properties upgraded with effective insulation, etc.

        Once everybody in the UK is connected to NINES-like systems or have ground source heat pumps, etc., installed, then everybody will be paying the full cost of it and it will be astronomical – and on top of paying for normal generation as back-up for when the wind isn’t blowing or the sun not shining.

        It’s lunacy. We shall all end up in fuel poverty.

  6. James Soper

    Is this proposed cable the same cable that would take the Viking Energy Windfarm energy south? If so how does this effect the Viking Energy wind farm plans?

    • Lindsay Wiseman

      To quote Tavish Scott, “Our future energy needs will be dependent o a seabed cable. What happens when that breaks? We will then be reliant on a diesel generator.” Please note he says when not if! How will this future breakage affect the interconnecting cable Viking Energy and now Peel are relying on?

  7. ian tinkler

    James Soper, no, it theoretically has nothing to do with the Viking project.
    Just another piece in the centralization plan. I would love to know which politicians are leaning on Ofgem promoting this piece of lunacy. Anyone out there hazards a guess?

  8. John Tulloch

    NGSLL were bragging at the consultation on Thursday about how expert they are at subsea cables however, only this year, their UK-France cable (8 x single cables) was snagged by a ship’s anchor, taking out four cables i.e. 50% of capacity. Shetland will have only 2 single core cables so a similar incident of fouling by a trawler or a ship’s anchor, inadvertently, or in a storm, would take out the grid connection. Subsea cable repairs can take a while, possibly, months, to organise (availability of cable ships) so then you are dependent on 64 portable diesel generators, parked in a field at Gremista.

    The submarine cable must be buried in a trench on the seabed and properly protected – NGSLL saying it “could be buried” isn’t good enough, they need to confirm that it WILL be buried and properly protected.

  9. ian tinkler

    Under EU dictates, all subsea cables should be buried, that is also Scottish Government policy! (National Marine Plan (NMP) for all activities in Scottish waters out to 200 nautical miles to achieve “clean, healthy, safe, productive and diverse seas”.).
    Estimated extra cost for every Kilometer of cable, a cool £3 million. (SSE figures)
    Now it does not take a genius to estimate the extra costs here. (£780 million) It would take a lunatic to endorse this silly plan, however, if it has to be progressed, why not take the cable via Fair Isle?
    That at least would give Fair Isle folk a reasonable and reliable(?) power source without the utter dog’s breakfast of green lunacy they are being hoisted with and at the same time save £2.65 million!.



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