Climate Change Programme Consultations

Section 4 - Place: Energy Generation

Contents

 

Introduction

Our current energy system has evolved to reflect technological innovations in energy production and use.  This section provides a summary of different types of energy generation including: oil and gas, renewables, bioenergy, hydrogen and its derivatives.  Section 5, considers how these fit within the whole energy system and Section 7 considers the use of energy.

Shetland is in the middle of a highly productive energy region.  The islands have been an oil and gas energy hub for over 40 years and the excellent renewable energy resources provide an opportunity for renewable energy from onshore and offshore wind and tidal.  In addition, there is potential for the generation of hydrogen and its derivative fuels along with biofuels.

The future Shetland energy system will be composed of a variety of technologies working together to cover all of our energy needs.  The production of Oil and Gas is in decline and changing Government priorities make future predictions on the rate of decline unclear.  We have an excellent renewable energy resource but technology readiness, the route to market for the energy and how the different components best complement one another is unclear.  Therefore cooperation, collaboration and strategic planning are important to optimise all the available opportunities.

 

Oil & Gas

How does it work

Oil and gas are formed from organic material mainly deposited in sediments on the seabed and then transformed through a set combination of events over hundreds of millions of years. 

Oil and gas deposits can be recovered in areas where there is a suitable combination of source rock, reservoir rock, cap rock and a trap.  The waters off the coast of Shetland to both the east and west have been well explored.  We therefore, do not anticipate the discovery of any further large reservoirs.   However, the UK Government continues to promote exploration as part of its current energy security policy.

Current Situation

The islands have been an oil and gas energy hub for over 40 years. Over 8 billion barrels of oil have been exported from Sullom Voe since 1978.  The Shetland Gas Plant did process 10% of the GB gas requirements when it opened in 2016, this has now reduced to 4%.

The infrastructure at Sullom Voe Terminal, the Shetland Gas Plant, to oil and gas fields east and west of Shetland with gas pipelines connecting Shetland to the UK Mainland forms a huge part of the UK’s energy infrastructure.  Lerwick’s proximity to oil and gas activities, complemented by its deep-water capabilities mean the harbour is ideally placed to meet the needs of industry in the recycling and disposal of large structures.  As a result Lerwick was one of the first ports in the UK to handle major offshore industry decommissioning projects.  Following completion of recent capital developments Lerwick Port Authority have created a modern port to meet the sector’s changing requirements.

In addition, our people have built up a wealth of knowledge and experience in engineering, logistics and other associated sectors, including environmental monitoring and marine planning. 

Future 

The prospects for continuing oil and gas production through Shetland are uncertain at the time of writing. The staple Brent and Ninian systems are close to completion, and no decision has been taken on the future production of Clair oil through SVT beyond 2025. Shetland Gas Plant production is in decline. Should national energy policies continue to favour oil and gas production in the era of energy transition, Shetland could have a continuing nationally significant role. 40% of the remaining UK oil and gas reserves lie to the West of Shetland. The reservoirs are well understood and it is unlikely that there will be any further large reserves discovered.  This means that, irrespective of the climate emergency and the energy security agenda, we must plan for a Just Transition away from oil and gas.  The eventual transition away from oil and gas is inevitable.

Many factors will affect political and commercial decision making in the oil and gas sectors determining whether oil and gas production will end in Shetland before 2030 or continue by 2050. These factors are summarised below.

Governance, Policy and Frameworks

Governments react to public pressure. The Climate Change movement has been a significant driver for UK and Scottish Government policy decisions in recent years, with the spotlight on Glasgow for COP26 in November 2021.  Since then the world energy crisis has accelerated thus putting energy security and the cost of living at the top of the political agenda.  Overall the policy environment is facilitating a shift towards a low carbon future. The draft Scottish Government Energy Strategy and Just Transition Plan:

“supports the fastest possible just transition for the oil and gas sector in order to secure a bright future for a revitalised North Sea energy sector focused on renewables”

This is at odds to the recent UK Government policy paper: Powering up Britain, where one of the vision points is:

“maximising the vital production of UK oil and gas as the North Sea basin declines”.

At this time a balance has to be met between the climate emergency and energy security. 

In the coming decades, government policy will swing with the mood of the electorate, with inconsistent government energy policy an enemy to the confidence of energy investors.

Energy Majors Business Planning – all of the Energy Majors have signed the UN Paris Climate Change Agreement to limit global temperature increase to 2°C in this century. We need to understand how they plan to meet this target, along with the opportunities and challenges for Shetland.  We must ensure that these plans engage with the Energy Development Principles and the holistic energy solution for Shetland.  The electrification of offshore assets for example will require a clean source of power and a substation onshore to supply the power at the correct voltage and frequency, along with a cable network to connect to the assets. 

Eventually, companies relying solely on profiting from oil and gas will struggle to compete in an energy market where consumers and investors favour cleaner forms of energy.

Global Energy transition would be much quicker if international energy companies switched more of their extensive research and development budgets and negotiation experience towards the new technologies required to advance the green agenda. In order to engage fully in the development of renewable energy these companies will need to reinvest the money earned from their main trade, oil & gas, into new technology projects and supply chain development.  The integration of renewable energy with the established oil & gas industry is a key part of a just energy transition and will last until renewable energy becomes the predominant source of energy on the planet.

Reducing our dependence on oil and gas

In order to enable a just transition to net zero it will also be necessary to consider how we use oil and gas.  Both as an energy source and as a key element in many manufacturing processes.  Consumer demand will be a key driver for change.

The inevitable conclusion is that oil and gas production will still be required as part of the transition to clean energy. Oil & gas production and refinement will become cleaner and their industrial uses will reduce as the use of clean energy is prioritised but there will still be a global oil and gas industry in the net zero future.

Decarbonising offshore oil and gas facilities using shore power based on renewable energy presents a significant conundrum.  Using that same energy to decarbonise UK homes or to produce hydrogen on Shetland would save more carbon emissions, contribute more to the net zero movement and provide a bigger economic impact.

Shetland’s involvement in oil & gas activities will depend on national politics, international supply and demand, regional competiveness and the state of the oil and gas reserves. However, the world needs to move on from oil and gas use as fast as it practically can.

We will statements for oil and gas

  • We will engage with oil and gas companies to contribute and encourage the progression of their general decarbonisation plans, within the whole energy system for Shetland- using the Energy Development Principles as the basis for discussion.
  • That said, we will also emphasise that clean energy produced in and around Shetland should have priority use for achieving clean, secure and affordable energy for Shetland and for on-island wealth building.

 

Renewable Energy Generation

In addition to oil and gas, Shetland has an excellent renewable energy resource.  The UK and Scottish Governments have set ambitious targets for renewable energy generation.  Shetland will have a role to play in meeting these targets.  However, due to our location, the development of renewable energy generation will be determined by the route to market for the energy.  It is therefore essential that energy generation is considered within a whole energy system.

This section covers the different types of renewable energy generation that are applicable to Shetland.

 

Onshore Wind

How does it work?

Power from the wind has been harnessed for thousands of years, the most historically notable being sailing ships and windmills for grinding grain.

Wind turbines work by utilising the power in moving air.  As the blades turn, the rotational energy created turns a shaft which is converted into electricity by a generator.  This electricity can then be used to supply a house or building, or be fed into the National Grid system.

Governance, Policy and Frameworks

In Scotland, applications for consent for the construction, extension and operation of electricity generation stations with capacity in excess of 50MW are made to the Scottish Ministers for determination.  Applications below this threshold are made to the relevant local planning authority.

Current Situation

With the highest average annual wind speed in the UK at 16.8mph, Shetland has an exceptional wind resource. Shetland also benefits from having the highest average capacity factor, meaning a turbine in Shetland will produce more power than an equivalent turbine on the mainland.  This has been proven by the turbines at the Burradale Wind Farm which have an annual average capacity factor of 52%, one of the highest in the world, compared to a UK average of 28%.

At the time of publishing, Shetland has over 11MW of wind energy connected to the distribution network, all of which is locally owned. 

While Shetland has this resource, the local electricity distribution network is highly restricted, limiting the amount of renewable energy generation which can be connected. 

The 443MW Viking Wind Farm is under construction with a further 246MW planned across 3 sites.

A 600MW interconnector is under construction, which will connect Shetland to the National Grid for the first time.  Once the interconnector is in place, there will still be restrictions on grid connections to the distribution system. However, this may change over time. Continued discussion with SSE, OFGEM and National Grid will be required to enable the most flexible local arrangements.  For further information on electricity and associated infrastructure see Section 5 whole energy system.

Future

Onshore wind will play a large role in decarbonising the Shetland energy system. When the 443MW Viking Energy Project switches on in 2024, the Shetland grid will make the shift away from diesel powered generation.  Instead, the grid will be powered by renewable onshore wind energy with energy storage. The fossil fuelled generators will only be required for backup to tackle any intermittency issues.  Taken together the onshore wind projects already in operation and those underway will far exceed the electricity demand in Shetland with the excess exported via interconnector to the UK mainland.

Any additional onshore wind will be considered in line with planning guidelines.  However, due to the constraints on the Shetland electricity distribution and transmission networks, any additional onshore wind will need to be associated with increased demand and considered within the whole energy system for Shetland. 

The advised policy position is to oppose further development of larger scale sites in favour of supporting continued generation on existing and consented sites. Should such developments proceed against this advice then the Energy Development Principles must apply.

Opportunities:

  • Excellent wind resource
  • Wind is an established technology 
  • £/MW to install a wind turbine has reduced 
  • Community benefit is voluntary but is established 
  • Energy source for other uses including heat, hydrogen and electrification of offshore assets.  
  • Local capabilities development

Challenges:

  • Over development in a limited land area 1,466km2 
  • Need to protect and improve our existing natural resources e.g. peat bogs 
  • Route to market for energy
  • Local supply chain support and back up from manufacturers   
  • Project finance.
  • Affordable energy for local consumers

 

Offshore Wind

How it works

Offshore wind turbines, similar to onshore wind turbines, work by utilising the power of moving air.  As the blades turn, the rotational energy created turns a shaft which is converted to electricity by a generator.  This electricity can be transmitted to shore via a network of subsea cables or potentially used directly offshore to produce hydrogen.

Depending on the water depth turbines can either be fixed or floating.  Floating technology is advancing, allowing access to deeper waters such as those around Shetland. Advantages of floating turbines include:

  • Expansion of the viable area for wind energy development
  • Reduced visibility from shore
  • Access to areas with higher and steadier wind characteristics

Current Situation 

Offshore wind is relatively new and floating offshore wind is another step in development.  The world’s first commercial floating offshore wind site is the 30MW Hywind Scotland project developed off Aberdeen, and commissioned in 2017. This was followed by the 50MW Kincardine Offshore Windfarm also off Aberdeen which became operational in 2021. This is the largest offshore floating wind farm in the world at the time of writing, and operates in depths between 60 and 80 metres.  Further larger floating offshore windfarms are under construction and planned 

There are different technologies available depending on the sea conditions and depth, with fixed-bottom foundations functioning in shallower waters near shore.  The floating foundations can take the form of a spar, semi-submersible or Tension Leg Platform (TLP) and are anchored to the seabed by mooring lines.

The Offshore Renewable Energy Catapult is the UK’s leading technology innovation and research centre for offshore renewable energy.  They use their facilities to bring industry and academia together to drive innovation in renewable energy.

Governance, Policy and Frameworks

Offshore wind is already Scotland’s second largest source of renewable energy.  This is set to increase further with both the UK and Scottish Government’s setting ambitious targets for offshore wind.  The offshore wind generation potential in the waters around Shetland is large and there will be a role to play in contributing towards these targets.   

The Crown Estate for Scotland, agree leases for a specific area of foreshore or seabed to be occupied by a third party “tenant” for an agreed purpose, such as renewable energy, and give consent for the tenant to develop on the lease site, if other required permissions are granted.

Applications for offshore wind are made to the Marine Directorate at the Scottish Government. The Scottish Ministers have developed the overarching National Marine Plan, along with the Sectoral Marine Plan for offshore wind.

For projects within the 12NM limit these will also require a works license from the Council.

The future

Option Agreements have been signed for 2.8GW by 3 developers on the NE1 site to the East of Shetland through ScotWind, with interest in further sites and further ambition from the Scottish and UK Governments to encourage further offshore wind.

It is expected that the scale up of offshore wind technology will happen rapidly and the timelines are shorter than those anticipated even a couple of years ago.  In order for this to happen extensive research is required: for technology development and site specific marine research. 

The strategy acknowledges that offshore wind will impact marine biodiversity and other users of the sea.  However, the Council has little control of the waters beyond 12 miles or projects over 50MW.  As these decisions are approved by the Marine and Energy and Climate Change Directorates at the Scottish Government/Crown Estate Scotland.  The Energy Development Principles are used to guide discussion with any prospective developers.

The route for taking all this energy to market is a key unknown and will be a significant factor in all future energy scenarios for Shetland.  The options currently being considered include:

  • An electric interconnector to the mainland UK.
  • An electric interconnector to Shetland for conversion to hydrogen and potential further processing to ammonia, e-methanol or other synthetic fuels. 
  • Conversion offshore at the wind farm to hydrogen, with either a pipeline or vessel to transfer to market.  

The hydrogen economy is discussed in further detail in Sections 5 and 7. 

Opportunities:

  • Wind resource
  • Existing onshore infrastructure for marshalling and assembly along with ongoing operation and maintenance.
  • Onshore value adding activities – hydrogen, ammonia and e-methanol

Challenges:

  • Balance between different demands on our seas.
  • Route to market for energy.
  • Technology development
  • Understanding all of the infrastructure required both direct and indirect.

 

Tidal

How it works

Tidal energy is produced by the ebbing and flowing of the tides and can be converted into electricity via tidal turbines. Due to the nature of the tides, this form of renewable energy is very predicable when compared to wind or solar. This gives it advantages when used for electricity production, as the generation output:

  • is guaranteed and predictable to the minute, and
  • is not determined by the weather.

A tidal stream turbine works in the same way as a wind turbine and they can be floating or placed underwater on the seabed. As sea water is nearly a thousand times denser than air, tidal flows have a higher energy density than wind, despite moving slower. Tidal turbines can generate the same power as a wind turbine, but from a smaller area.

Current Situation

Orkney and Shetland are global leaders in tidal turbine technology with plans to scale-up production and spread knowledge around the world to deliver clean, predictable electricity generation. 

Shetland has a good tidal resource.  A marine resource survey was commissioned in 2011 for wave and tidal energy around Shetland. This data was combined into the Shetland Marine Spatial Plan to create a valuable resource for developers investigating suitable sites.

Various tidal devices have been tested in Shetland. One of the earliest was the Stingray in 2003.  This was the first tidal stream device tested in the UK and produced power in Yell Sound. The construction jetty at Sullom Voe was used for practising and perfecting the lowering mechanism of the device and then the ‘Stingray’ was deployed from a barge between Bigga and Yell. This was a major achievement in under 6 months to deploy a device and generate power.

Our neighbours in Orkney have been making strides in other types of marine energy. EMEC, European Marine Energy Centre in Orkney was established in 2003.  It is the world’s first and leading facility for demonstrating and testing wave and tidal energy converters – technologies that generate electricity by harnessing the power of waves and tidal streams, in the sea.

Governance, policy and frameworks

The Crown Estate for Scotland, agree leases for a specific area of foreshore or seabed to be occupied by a third party “tenant” for an agreed purpose, such as renewable energy, and give consent for the tenant to develop on the lease site, if other required permissions are granted.

Applications for tidal projects are made to the Marine Directorate at the Scottish Government. The Scottish Ministers have developed the overarching National Marine Plan, which covers the management of both Scottish Inland (out to 12 nautical miles) and offshore waters (12 to 200 nautical miles).

For projects within the 12NM limit these will also require a works license from the Council.

  • Scottish Government, Draft Energy Strategy and Just Transition Plan - Draft marine energy vision for Scotland
    • The industry group recommends the introduction of marine energy deployment targets, including at least 40 MW of installed capacity from tidal stream energy by 2027

Case Study - Nova Innovation

Nova Innovation launched their first turbine in 2014, a 30kW grid connected device. A great deal of learning came out of this trial including that turbines can be deployed quickly, safely and cost effectively using small local workboats. 

In 2016 Nova developed the world’s first offshore tidal array in Bluemull Sound.  They have worked with Tesla to add energy storage to their tidal technology, creating the world’s first tidal power station to deliver baseload tidal power. Nova continue to develop their turbines and the array.  The fourth turbine deployed in August 2020 is a direct drive generator, meaning it has no gearbox. Turbines five and six were installed earlier this year.  However, three of the earlier turbines are to be decommissioned, bringing the installed capacity to 300kW.  The decommissioning of the earlier turbines will provide Nova with “unique learning” on the process and pave the way for more turbines being installed at the site near Cullivoe.

Through the EnFAIT project Nova Innovation have been able to reduce their production costs by 30% and hope to increase this to 40% by the end of 2022.  In addition, they plan to reconfigure the turbine array to better understand how the wakes produced by upstream turbines affect power generation downstream, in order to optimise the array layout.   

In 2021 the world’s first “water to wire” electric vehicle (EV) charge point powered purely by the tide was installed and is consistently used by local residents. 

In 2022, Nova Innovation were awarded an Option Agreement from Crown Estate Scotland to develop a 15MW tidal array at Yell Sound, between the islands of Yell and Bigga. 

In 2023, Nova Innovation secured just over £130,000 from the Scottish Government’s hydrogen Innovation Scheme.  Along with partners: the University of Strathclyde, Shetland Islands Council and Ricardo Energy to investigate potential markets for both the hydrogen and oxygen produced from electrolysis. 

Jobs and economic value were created for Shetland through an integrated supply chain:

  • Substructures fabricated in Lerwick by LEF
  • Manufacture of the blades and onshore housing by Shetland Composites
  • Concrete ballast blocks by Hunter and Morrison
  • Installation and maintenance using local vessels.
  • Shore logistics using local haulage companies
  • Crane lifts by Petersons
  • Maintained at Ocean Kinetics

Future

The Wave and Tidal resource assessment undertaken in 2011 highlights the potential for tidal power around Shetland.  Tidal power benefits from being predictable and can be integrated into the grid with energy storage to provide baseload and deal with the intermittency of other renewable technologies (such as solar and onshore wind). 

Although tidal power companies like Nova are now making power reliably and moving away from prototype demonstration towards mass manufacture, the cost of energy from the tide remains higher than wind or solar.

Over the coming decade we need to support tidal energy to further reduce their costs and support their journey towards commercialisation which will also help to diversify energy generation. 

Opportunities:

  • Predictable
  • Baseload electricity 
  • Not subject to the weather 
  • Cost reduction  
  • Range of technologies available to suit different sites  
  • Local knowledge  
  • Other renewables have gone before, lot of learning done already
  • Tidal turbines typically smaller than a wind turbine of the same capacity

Challenges:

  • Technology still developing
  • Sites limited geographically
  • Route to market for energy 
  • Achieving competitive viability
  • Need for steady support to allow the technology to mature 
  • Operating in seawater: challenging structural loads / vibration / biofouling

 

Wave

How it works

Wave energy harnesses the motion of the waves.  There are several different technologies available depending on the site under consideration. 

The amount of energy generated is determined by the height, speed and wavelength of the wave.

Current situation

A marine resource survey was commissioned in 2011 for wave and tidal energy around Shetland.  This data was combined into the Shetland Marine Spatial Plan to provide a valuable resource for developers investigating suitable sites.

Several wave developers have considered sites around Shetland but no projects have been developed. 

Governance, policy and frameworks

The Crown Estate for Scotland, agree leases for a specific area of foreshore or seabed to be occupied by a third party “tenant” for an agreed purpose, such as renewable energy, and give consent for the tenant to develop on the lease site, if other required permissions are granted.

Applications for wave projects are made to the Marine Directorate at the Scottish Government. The Scottish Ministers have developed the overarching National Marine Plan, this plan covers the management of both Scottish Inland (out to 12 nautical miles) and offshore waters (12 to 200 nautical miles).

For projects within the 12NM limit these will also require a works license from the Council.

The future

Wave technology is being investigated in other locations but at present the technology is not suitable for the harsh and variable conditions around Shetland. 

Opportunities:

  • Energy diversity
  • Developing technology

Challenges:

  • Competition for marine space

 

Hydro

How it works

Hydroelectric power is energy derived from flowing water. Hydro power has been used for hundreds of years globally. Locally, there were small horizontal wheeled water mills built in every Shetland community.  These mills were powered from burns (streams) and, for most of the rural population, provided the oatmeal part of their diets. Larger vertical wheeled water mills were located at places such as Quendale, Girlsta and Weisdale. This form of water powered milling had largely disappeared by the middle of the 20th century.

The amount of hydroelectric power generated depends on the water flow and the vertical distance (known as ‘head’) the water falls through.  There are various types of turbine to suit different sites.  Hydro turbines range in size from pico schemes of 200-300W providing power to a single property to small ~12kW devices like the one which used to operate in Foula, through to the largest hydroelectric power station the 22.5GW Three Gorges in China.

Current situation and future

Applications in Shetland are limited, various micro hydro sites have been investigated and the potential is low.  Therefore, any projects need to be considered as part of a system.  The Foula Electricity Scheme did have hydro as part of the energy mix on the island and have recently undertaken a study on the existing infrastructure to consider the options for reinstatement and connection to the island grid. 

 

Solar

How it works

Solar energy harnesses the heat and light from the sun’s rays:

  • Solar PV (Photovoltaic), capture the sun’s energy converting it into electricity.
  • Solar thermal, capture energy from the sun to heat a liquid flowing through glass tubes.
  • Passive solar, this when a property is designed, constructed and orientated so that it maximises the sun’s energy. While this is best applied to new buildings, it should also be a considered when designing extensions or renovations. 

For further information on solar see the Energy Saving Trust website.

Although regions closer to the equator have more solar energy, solar energy benefits from having fewer moving parts and less maintenance requirements than other renewable energy technology. 

Current situation

Solar systems have the potential to reduce a property’s energy bill over a year. In Foula and Fair Isle, these systems have proven to be a good addition to the energy mix.  The systems are most productive in the summer when there is less wind, providing a good balance with other renewables. 

Foula Electricity Trust have a 17kWp PV array, commissioned in March 2007.  Fair Isle Electricity have a 50kWp array, installed in 2018. Both of these solar installations are key components of the island electricity systems discussed further in Section 5.

Governance, policy and frameworks

For the majority of householders the installation of solar panels typically fall within what is known as “permitted development rights”.  This means that, if a solar panel or system is more or less flush with an existing roof, the Council will not ask for a planning application.

However, your property may be covered by certain designations and it is therefore recommended that installers of PV or solar panels contact/or write to the Council’s Planning Service to obtain confirmation as to whether planning permission is required. Similarly the Council’s Building Standards Service should be contacted to ascertain whether a building warrant is required, prior to commencement of works.

Similar to onshore wind projects in excess of 50MW are made to the Scottish Ministers for determination. Applications below this threshold are made to the relevant local planning authority.

Case Study – Bressay Development Ltd.

Bressay Development Ltd (BDL) is a community led organisation with a wide vision to support the community of Bressay.

Following a Community Asset Transfer, BDL, now owns the former Bressay school and site.  BDL undertook the Speldiburn Green energy and heating project, which was completed in April 2021.  This project has seen a 60% reduction in the energy consumption and CO2 emissions on the site.

Work undertaken

  • Removal of all storage heaters and replacement with air source heat pumps
  • Additional loft insulation in the old part of the building.
  • 40 solar panels split across the east and west elevation were added to the roof of the wooden extension.  Output 15kW.

“It is so lovely to walk in the front door and feel instantly comfortable and that's appealing to visitors and customers too.”

Lessons learnt

“We weren't sure we would get either this level of savings or this change in temperature - we didn't expect both to be so impressive!”

Hypothetical example

The cost of a solar installation varies greatly depending on:

  • whether the project is a new build or a retro fit,
  • the type of panels and the size of the array,
  • whether the array is roof or ground mounted, and,
  • associated equipment such as batteries and controllers to make use of the energy generated within the property.

The Energy Savings Trust has an online solar calculator.

Annual generation will depend on:

  • the size of the array
  • the efficiency of the panels, and,
  • the location, orientation and direction of the panels. 
  • The main variable is how overcast the skies are, while the panels can generate energy on a cloudy day they are more efficient when the sun shines. 

As electricity import prices are high and export prices are low, it is advantageous to use as much electricity on site as possible. 

Operating costs will depend on:

  • Operating costs are low as there are limited moving parts. 

Size a domestic PV array is around 20m2 compared to a solar thermal array which is around 5m2

Payback period

For an initial cost of £8,000 and annual generation of 3,086kWh the payback period for this hypothetical example is around 12 years. However, it assumes no financial assistance, a zero interest loan, 80% energy use on site and electricity prices to remain at 27p/kWh. 

Lessons learnt

  • Do your research, there are lots of options available.
  • Learn how the system works so that use within the property can be maximised

The future

Solar energy will play a role in the future energy system for Shetland.  It is versatile, benefits from minimal maintenance and can operate on a range of scales.  The Net Zero Route Map for Shetland includes targets of deployment of roof mounted solar technologies on c. 25% and c. 40% of buildings for pathway A and B respectively.  Targets have also been set within the Shetland Islands Council Climate Change strategy and solar is included within LHEES.

Similar to other electricity generation technologies the deployment of solar will be limited by grid capacity.  Therefore, it is anticipated that the main application will be to reduce the amount of power a property requires from the grid. 

Opportunities:

  • no moving parts
  • minimal maintenance
  • Wide range of applications

Challenges:

  • matching electricity generation with demand
  • upfront cost of purchase and installation
  • Afterlife & recycling of panels

 

Geothermal

At shallow depths of less than 200m the energy is largely derived from solar energy, a typical example of this is a ground source heat pump. 

Deep geothermal generally refers to depths of over 500m.  Good geothermal potential sites either need large ‘radiothermal’ granites or hot sedimentary aquifers.  It is unlikely that there would be any substantial hot aquifers beneath Shetland due to the geology but there are several granite masses which were investigated and could be investigated further in conjunction with a heat load. 

How it works

A pair of boreholes are drilled for ‘production’ and ‘re-injection’ of the hot water, which is used for space and water heating at the surface.  The amount of heat from a single system ranges between 2-5MW, with temperatures in the 65°C-95°C range.  Systems have a low carbon intensity and can function for many decades.  As the majority of the costs are associated with drilling the holes which may go down to 5km and the cost of driving the pumps is relatively small, the long term costs can be predicted.

Current Situation

A study was undertaken in 2013 for SHE&P to explore options for expanding the district heating scheme in Lerwick.  The results of the research was that a deep geothermal borehole to create a direct heat source is unlikely for Scalloway or Lerwick but there was some potential for Brae.  Further investigation would be required to determine the suitability and match to a suitable heat load.  As this study dates back to 2013 it would be necessary to re-evaluate the cost and business model. Geothermal energy is also being investigated offshore.

 

Nuclear

The Scottish Government is currently opposed to the building of new nuclear stations using current technologies.

Existing nuclear is expensive and the construction of new nuclear plants take decades.  As Shetland is highly restricted on energy export routes and there are various other alternative options nuclear would appear more suited to sites close to population centres.

 

Support Mechanisms for Renewable Energy Generation - CfD

The UK and Scottish Government along with others have a number of mechanisms to support renewable energy generation and the transition to net zero.  Contracts for Difference (CfD) is the UK Government’s main mechanism for supporting low-carbon electricity generation.  CfDs incentivise investment in renewable energy by providing project developers with protection against volatile wholesale prices. Additionally, they protect consumers from paying increased support costs when electricity prices are high.  In February 2022 it was announced that CfD rounds are to become annual to speed up deployment.  However, CfD has made it more difficult for smaller community energy projects to find a financeable route to market. Although with rising wholesale energy prices long-term, Power Purchase Agreements (PPAs) are becoming an option in some circumstances, where generators enter into a long term agreement with a customer to sell their electricity at a predetermined price. 

To further the Hydrogen Economy, the UK Government is in the process of developing the Hydrogen Production Business Model, which is set to act in a similar way to CfD to incentivise investment in hydrogen production.

We will statements for renewable energy generation

  • We will support and encourage research and development of renewable energy generation in and around Shetland.
  • We will support and encourage further research to understand the physical capacity and capability for future energy generation projects across all technologies both onshore and offshore.
  • We will oppose further development of larger scale onshore wind sites in favour of supporting continued generation on existing and consented sites. Should such developments proceed against this advice then the Energy Development Principles must apply.

 

Alternative Fuels

Hydrogen and its Derivatives

How it works

Hydrogen is an abundant gas that can be used to power vehicles, homes, generate electricity and can be converted into other useful fuels. It doesn’t emit CO2 during use, so can be considered a clean fuel and will be key in the decarbonisation of many sectors.

Hydrogen doesn’t occur naturally, so power is required in order to produce pure Hydrogen. There are various different production pathways for making hydrogen, denoted by a colour depending on the method of production.

Governance, Policy and Frameworks

The UK currently has no dedicated planning regime for hydrogen, however, the UK Hydrogen Strategy aims to have a regime in place before 2024. Currently, planning permission is based on regimes applicable to the chemical and gas processing industries, as well as power generation and carbon capture and storage.

The UK Hydrogen Strategy and Scottish Hydrogen Action Plan currently has a planned investment of £240 million and £100 million respectively to ramp up hydrogen production to 20 GW, with a 10 GW contribution highlighted in the Scottish Action Plan.

The EU’s ambition is to have 100 GW of electrolyser capacity by 2030 with Europe currently being the most ambitious continent for hydrogen production, which is based on available and commercially mature technologies. Companies developing electrolysers include NEL, Thyssenkrupp, and ITM, who are developing in the UK. In July 2020, the EU announced their €1 billion Hydrogen Strategy.

National hydrogen strategies are also being developed including Germany and France who have invested €7 billion each to enable production, use, and import of hydrogen.

Current situation

There is considerable hydrogen production knowledge in Shetland already, provided by the Unst-based Pure Energy Centre (Pure), both a manufacturer of hydrogen systems used in many countries and a hydrogen systems advisor.  Pure works on the development of wider renewable energy projects including green energy storage technologies.

Case Study – Hydrogen Production in Orkney

The Orkney Islands have been home to, and centre of, renewable energy innovation for more than 60 years. 

EMEC alongside other local organisations including Community Energy Scotland, Eday Renewable Energy and Orkney Islands Council kickstarted hydrogen activity in Orkney through a project called Surf ‘n’ Turf. An electrolyser was installed at EMEC’s onshore facilities in 2016 near its tidal test site on the northern island of Eday. Funded by the Scottish Government, the project demonstrated how green hydrogen could be generated via electrolysis using tidal and curtailed wind energy and act as an energy storage solution. In 2017, EMEC generated the world’s first tidal-powered hydrogen

Future

Hydrogen production in Shetland could create a new economic market through local use, the further processing to synthetic fuels, as well as export nationally and internationally through the existing connections to the UK mainland and Europe.

Currently, there are a number of projects planned that aim to produce industrial quantities of hydrogen, which would form part of Shetland’s future energy industry. The successful bidders of the NE1 offshore wind site could be a key part of that future industry.

Potential benefits include:

  • associated jobs and local skills development,
  • direct community benefit funds,
  • Local supply-chain development and capacity building,
  • And secure and affordable energy.

There is significant demand developing in Europe, especially in Germany and the Netherlands, which will benefit from the quantities of hydrogen that can be produced in Shetland.

Opportunities:

  • Opportunities to use Oxygen and surplus heat
  • Potential route to market for electricity from offshore wind
  • Can take a phased approach
  • Economic diversification

Challenges:

  • Policy & regulatory barriers
  • Chicken and the egg of matching supply and demand
  • Need to reduce costs
  • Viewing hydrogen within the wider whole energy system.
  • in the early stages it would be best to locate production near demand

 

Ammonia NH3

What is it?

Ammonia is a colourless gas with a characteristic pungent smell. It is soluble in water and is an essential feedstock in the chemical industry being primarily used in the production of nitrogen based fertilisers. 

Ammonia is produced using the Haber-Bosch process developed in the early 20th century.  This process uses a metal catalyst under high pressures to react nitrogen and hydrogen to create ammonia.  For further information you can visit Innovation Outlook Renewable Ammonia. 

Ammonia production is an energy and emissions intensive global industry.  According to the International Energy Agency (IEA) global ammonia production accounts for 2% of total final energy consumption.  As the majority of the current ammonia produced is from grey or brown hydrogen associated emissions are also significant. 

Current situation

According to a report by the IRENA and the Ammonia Energy Association published in May 2022:

Ammonia is one of the seven basic chemicals used to produce all other chemicals and is the second most produced by mass after sulphuric acid.  Around four-fifths of all ammonia is used to produce nitrogen fertilisers, such as urea and ammonium nitrate; as such, it supports food production for around half of the global population.

Ammonia also has an emerging market for use as a fuel for transport.

Since ammonia consists of hydrogen and nitrogen it has the advantage and potential of being a CO2 neutral substance. However, there are still emissions associated with NOx which represent a significant challenge.  Along with the direct use of ammonia, it can also be used as a hydrogen carrier by cracking the molecule to separate the nitrogen and hydrogen molecules.

Future

Ammonia production from green hydrogen represents a potential opportunity which requires further investigation. 

The cost of renewable ammonia is higher than conventional ammonia with the cost of producing hydrogen a key component.  A report from IRENA anticipates that it will be after 2030 before renewable ammonia achieves parity with ammonia from fossil fuels with carbon capture and storage.  

Opportunities:

  • Use in industrial processes such as the production of fertilisers. Already a huge market which needs to reform to reduce emissions.
  • Direct use as a fuel, early stage but shows promise

Challenges:

  • Hazardous – but has a well-known risk profile and has been handled for over a century.
  • Cost reduction
  • Use of ammonia as a fuel could increase emissions of nitrogen oxides

 

Methanol CH3OH

What is it?

Methanol is a colourless water-soluble liquid.  It is an important organic feedstock in the chemical industry. 

At present nearly all methanol is produced from natural gas ~65% and coal 35%.  However chemically identical renewable methanol can be produced by either combining green hydrogen and captured CO2 from a range of sources or from biomass.

Current Situation

Methanol is one of the key basic chemicals used to produce all other chemicals.  Methanol also has an emerging market for direct use as a fuel for transport and heat.

According to a paper produced by IRENA and the Methanol institute published in 2021 around 98 million tonnes of methanol is currently produced per year, a figure which has doubled over the past decade.  Lifecycle emissions from the production of methanol are responsible for around 10% of the emissions for the chemical industry around 0.3 gigatonnes of CO2 per annum. 

E-methanol is several times more expensive than conventionally synthesised methanol.  With production costs directly linked to the cost of the feedstock namely green electricity for the production of hydrogen and the cost of extracting CO2.

Future

Methanol production from green hydrogen represents an opportunity which requires further investigation.  It has an existing market which has grown significantly over the past decade and as it is such a versatile chemical there are a range of opportunities to be explored- either as a fuel for transport and heat or for export to other markets.

Opportunities:

  • Versatile
  • Uses existing technology
  • Key basic chemical in the production of other chemicals

Challenges:

  • Cost reduction

 

Synthetic Fuels and Biofuels

Synthetic fuels also known as e-fuels, are manufactured fuels like the production of methanol discussed above from the combination of hydrogen and carbon dioxide. In addition there are biofuels which are produced from plants or bio-waste, these are discussed further below.  Both synthetic and biofuels can be a drop–in replacement for fossil fuels with the same chemical formula.   

Bio energy and bio fuels

How it works

Biofuels are produced through various processes from plants and bio-waste. 

Examples of the processes include:

Bio refinery

How it works

Bio refineries are processing facilities that convert biomass into value-added products such as biofuels and biochemicals. 

Current Situation

Various feed stocks are being investigated locally, including: farming kelp and fallen stock from aquaculture. 

Anaerobic digestion is a process in which bacteria breakdown organic matter such as food waste, in the absence of oxygen.  As the bacteria consume the organic matter, they give off biogas which rises to the top of the digester.  Biogas consists mainly of methane, which can be used for various applications.

The current situation and future

At present there are no anaerobic digestion plants in Shetland, although it was identified as an option in the recent Net Zero Route Map.  The Scottish Government is planning to ban any biodegradable municipal waste being sent to landfill from 2025 and a recent report by the ClimateXchange to examine the potential to reduce emissions by processing agricultural waste.

Case Study - Seagreen

North Fish (Shetland) Ltd, have established a new business, Shetland Carbon Ltd to develop opportunities within the kelp/marine regeneration environment using the Sea green branding.

The North Fish proposal is to create an inward investment opportunity with sequestration opportunities for businesses looking to offset their carbon footprint, and in so doing generate the income to develop the concept offshore where a bigger potential exists.

As part of the process, Shetland Carbon is currently evaluating seabed licence opportunities to enable the process to be developed at scale. Competition with existing aquaculture sectors makes inshore opportunities very limited.

North Fish will provide all of the energy demands of the distillation of ground kelp into bioethanol. Distillation requires significant volumes of energy, and North Fish (Shetland) Ltd propose to utilise their own wind generation to provide the energy required with a private wire connection to produce very low process costs

To get the venture started nearshore licences are required to develop both the technology in offshore farming, and also to raise the short term volume of product to allow the development of the bio refinery.

The future

The Scottish Government’s Draft Energy Strategy and Just Transition plan states the following on bioenergy:

Our aim is to see bioenergy used only where it can best support Scotland’s journey towards net zero. In the short- to medium-term, bioenergy should only be used where it can be most effective in reducing emissions and where there is greatest need for alternatives to fossil fuels. In the longer-term, we want to encourage the use of bioenergy with carbon capture technology where possible.

In the short to medium term biofuels could be used in Shetland to help reduce our reliance on fossil fuels for some of our hard to decarbonise sectors such as our marine fleet. 

Biofuel production needs further investigation in a Shetland context and to consider the wider benefits such as the development of the complementary industry of kelp farming to provide a sustainable feedstock for biofuel production and a range of other products for other applications.

Opportunities:

  • Near direct replacement of their hydrocarbon equivalent.
  • Circular economy / Waste reduction.
  • Co products for cosmetics, nutrition natural fertilisers and carbon trading opportunities

Challenges:

  • Volume of fuel required, particularly for marine applications.
  • Secure feedstock to ensure continued supply

We will statements for alternative fuels-

  • We will support and encourage research and development of future fuel production and use in Shetland.
  • We will promote the production of fuels and chemical feedstocks that may be used locally to increase island resilience and decrease dependency on imported fossil fuels