Climate Change Programme Consultations

Contents

• Use of Energy
• Electrification for Decarbonisation
• Hydrogen for Decarbonisation
• Applications
• Transport
• Lifestyle

Long term outcome 1 – Reduce emissions

Target: Bring Shetland land and marine based energy emissions to net zero and contribute to national targets through the export of clean energy

Use of energy

Energy Security

The IEA defines energy security as “the uninterrupted availability of energy sources at an affordable price”

A secure and affordable fuel source has always been essential to life in Shetland.  When the first people settled in the isles, the native woodland would have been the main source of fuel leading to the woodland cover being removed.  Eventually peat provided abundant fuel and covers most of Shetland. 

Several factors led to the decline of this largely free fuel.  Coal was imported from the 19th century, giving better heat than peats.  The second factor was islanders’ living standards improved after the middle of the 20th century: by the 1970s even rural communities were abandoning peats in favour of oil and electric central heating.  People no longer had the same connections to the land, and families had more money to pay for services.  Electricity and oil were also easier and cleaner to use.

How we currently use Energy

As discussed in Section 2, the Shetland NZRM has highlighted the magnitude of the challenge to decarbonise energy use in Shetland. 

Emissions from oil and gas were excluded from the Shetland NZRM because, even though they are located within the area boundary, the fuels are exported, and therefore classified as Scope 1 emissions for end users outside Shetland. 

In addition, the UK Continental Shelf’s (UKCS) emission intensity for producing a barrel of oil is 20.81 kgCO2e/boe. In terms of Shetland’s midstream oil operations, Sullom Voe Oil Terminal emitted 29,794 tCO2e of Scope 1 emissions and 72,003 tCO2e of Scope 2 emissions. SVT’s Extraction Intensity ratio is more than twice as large as the UKCS average at 45.01 kgCO2e/boe, which is due to the relative maturity of SVT’s oil fields. Based on the assumption that 0.43 tCO2e is emitted per barrel of oil, upstream oil extraction in the UK accounts for roughly 5% of the total emissions resulting from the oil on average.

Energy/Mitigation Hierarchy

When aiming to reduce emissions, it is essential that we follow a “mitigation hierarchy,” which illustrates the importance of reducing energy usage before relying on technology such as renewables-generated energy or emissions offsetting. This is because reducing energy use is cost-saving, does not rely on technology, and is the only method of mitigation that is guaranteed to reduce emissions. This is the case no matter which technology produces the energy. Avoiding emissions can be achieved throughout the whole energy system by outright using less energy or by improving efficiency.

The Energy Hierarchy gives us a basic framework to changing our approach to energy use by breaking down the challenge into 3 interconnected parts:

1. Be Lean: Do more  

There are opportunities to decrease the total energy consumption of the islands, and educating the population to use less energy will undoubtedly improve, particularly if energy costs remain high.   

2. Be Clean: Do better  

When considering the whole energy system, there tends to be multiple inefficiencies.  This means that more energy must be generated or used to account for these losses. Minimising these losses will thus reduce the amount of energy that needs to be generated from either fossil fuel or clean sources.  

Examples could be the grid balancing techniques that are being proposed for use in Shetland and the re-use of surplus heat and oxygen from the production of hydrogen. The heat that is typically lost could instead be used in a district heating scheme.

3. Be Green: Do Differently  

De-carbonising the energy sector in Shetland means removing all fossil fuel combustion for energy generation, be it the Shetland Power Stations or individual kerosene powered heating systems.  One route to decarbonisation is to electrify as many of the processes that currently require fossil fuels. However, for this to be effective, electricity must be generated through renewable and clean resources, and has to be affordable.   

Doing each of these parts in isolation will not be enough to reach our net zero targets, so all three approaches must be taken together to make the lasting changes that are so important.

We will statement for the use of energy

• We will support the most appropriate use of energy following the energy hierarchy, matching supply and demand to maximise efficiencies.

Electrification for Decarbonisation

Current situation  

As electricity is relatively easy to generate from renewable sources, certain applications that have traditionally been powered by fossil fuels are becoming electrified, including cars, vessels, heating and some industrial processes. 

Electric vehicle ownership in Shetland continues to grow and three Shetland based companies have developed or are developing an electric boat.  We are also seeing an increase in the uptake of heat pumps to replace other heating systems and the number of marine vessels using shore power to reduce the use of auxiliary power while in port.

At present the Sullom Voe Terminal (SVT) and Shetland Gas Plant have their own power stations, with the SVT Power station also supplying the Shetland grid.  There is no electrification of offshore assets from Shetland.

Future    

Battery electric vehicles, vessels and planes are very efficient and are quiet.  However, their energy storage density is poor compared to other fuels, making the technology better suited to smaller vehicles, vessels and planes and for travelling shorter distances.  Along with the necessary improvements in battery technology it will be necessary to upgrade charging infrastructure across the roads network, airports and ports.  

In order to facilitate the electrification of transport and heating in Shetland, research must be undertaken in conjunction with SSEN Distribution and Transmission to understand where reinforcement works are required to allow new or larger grid connections.  Future Energy Scenarios are discussed in Section 5 above.

Electrification for decarbonisation of oil and gas

Governance, policy and framework

The North Sea Transition Deal (NSTD), signed by the UK Government and industry in March 2021, supports the North Sea Transition Authority’s (NSTA's) approach to cut oil and gas field emissions and set bold targets – down by 10% by 2025, 25% by 2027, and 50% by 2030, against a 2018 baseline.

Future

Locally onshore oil and gas assets will need to be electrified, if the operations of the terminals are to continue for future decades.  The power station at the Sullom Voe Terminal is due to be decommissioned in 2025, with options currently being considered for obtaining an electricity supply from the local electricity grid.

In addition, the decarbonisation of oil and gas installations is being investigated by oil & gas companies as a key requirement to meet emissions targets set by the North Sea Transition Authority by 2030.  The electrification of oil and gas assets has been happening in Norway since the 1990s but the UK is yet to power any installations from green power.

An announcement has already been made by developers BP, Equinor and Ithaca Energy that they have signed a Memorandum of Understanding (MoU) on 7th December 2022 to explore electrification options for the region covering the Clair, Rosebank and Cambo fields to the west of Shetland. The energy requirement for these three fields is around 220MW and would require a significant amount of infrastructure onshore in Shetland, along with electricity cables between Shetland and the installations.  Figure 43 provides a summary of the system requirements.  At the time of writing no final decision had been made.

In addition, the UK Government has announced that, in a bid to both back the North Sea O&G industry and to make Britain more energy independent, hundreds of new oil and gas exploration licenses will be granted. As 40% of the UKs remaining O&G reserves are located to the West of Shetland, this would suggest that there will be further requirements for electrification from shore if exploration leads to further field developments. 

In addition to O&G any clean fuel development at Scatsta and Sullom Voe could require significant amounts of electricity and the NE1 offshore wind sites will require a route to market for their energy.  This could be via Shetland.

Electrification for decarbonisation we will statement

• We will develop a Local Area Energy Plan (LAEP) for Shetland.

Hydrogen for Decarbonisation

Current Situation

At present there is no production or use of hydrogen in Shetland but there is a great deal of development interest.  The heavy reliance on fossil fuels and constrained electricity grid mean that clean fuels will be a requirement for reaching net zero, particularly for large on and off road vehicles, aviation, marine and rural heating applications. 

Governance, policy and framework

Governance on the use of hydrogen relates to the sector seeking to use the hydrogen. For example, the NEPTUNE Project provides a summary of the decarbonisation targets for Shetland’s marine sector along with detailing the approval bodies that must be satisfied.

Through its Hydrogen and Energy Strategies, the Scottish Government has emphasised the deployment of hydrogen as a solution to the decarbonisation of various industry sectors, because it is such a versatile fuel.  However, green hydrogen is relatively difficult to produce and the electricity required has a cost.  It is therefore expensive, and so we need to have a Shetland approach to the deployment of hydrogen and related synthetic fuels.  As affordable hydrogen can’t be a like for like fuel switch with our existing hydrocarbon based fuels.

Future

While electrification is a recognised, proven option for decarbonising a range of sectors, there are situations where it is not a viable solution. Large industrial processes, certain transport and heating applications and a range of other scenarios need another solution to transition away from fossil fuels, where electrification isn’t possible due to technology availability, power requirements or grid constraints.  In addition, biofuels are either not available or can only provide a short to medium term solution. This is where hydrogen, or its derivatives, come in. 

It is important that we understand how demand will grow in Shetland over the next 10 years and where hydrogen may facilitate other opportunities such as the production of synthetic fuels. 

Opportunities:

• Green
• Highly versatile
• Learn from other areas
• Reduces additional strain on electricity network

Challenges:

• Cost
• Associated infrastructure
• Safety and regulatory approvals
• Not currently available in Shetland

Hydrogen for decarbonisation we will statements

• We will prepare a local approach to the use of hydrogen in Shetland aligned with other local strategies such as for heat and transport.

Applications

Buildings - Heating for a Net Zero Future

Emissions from domestic and non-domestic buildings make a significant contribution towards emissions.  They also represent an area which is comparatively easy to decarbonise as there are known solutions. 

It is widely acknowledged that the fabric first approach should be taken.  This means the performance of the building should be maximised first, before considering the use of mechanical and electrical building service systems. 

Heat pumps and district heating will be key to the decarbonisation of heat.  However, further deployment of district heating schemes will require the identification of low cost, low carbon heat sources such as surplus heat from green hydrogen generation. 

The main challenge relates to undertaking the works across the whole building stock and the associated cost.  The Council is currently preparing the Local Heat and Energy Efficiency Strategy (LHEES), which will provide a detailed strategic plan on heat and energy efficiency for Shetland.

The use of heat will also play a wider role in energy storage and smart electricity systems to help balance supply and demand.  This will be of particular importance as the use of electricity grows.

The Cost of energy efficiency and heat

The Shetland NZRM presents an estimate for the resource costs required to reduce energy consumption in Shetland.  Upgrading the building fabric and replacing fossil fuel heating systems in domestic buildings is estimated to be in the region of £360-600 million. For non-domestic buildings it is estimated at £190-230 million.  While these measures would result in energy bill savings, these may not necessarily be proportionate to the amount of money spent per household.

Paying for energy efficiency

Funding is available from a range of sources. However, as highlighted above, the overall cost is significant.  This means that finance from a range of sources will be required to deliver the level of change required in Shetland. 

One of the key actions is to build up on-island expertise to apply for external funding in support of energy transition projects. This can be best achieved by having a clear understanding of all the projects required, backed up by confirming data.  The Council is currently preparing the LHEES, a strategic plan local heating and energy efficiency, and staff are also engaged in the Islands Centre for Net Zero Project, which seeks to accelerate decarbonisation across the three island groups.

The other side of the challenge is having the workforce and supply chain available to undertake the work required.  Many of the funding schemes are highly bureaucratic and have been developed based on a centralised delivery model, better suited to an urban setting.  It is therefore necessary to find local solutions which enable our local supply chain to be able to deliver projects as the funds and data alone can’t deliver change.

Insulation

How it works

Insulation aims to trap heat within a home, restrict external moisture and when installed correctly allow for ventilation.

Types of insulation:

• Loft
• Internal wall
• External wall
• Underfloor

Opportunities:

• Reduce energy consumption
• Improved comfort

Challenges:

• Condensation and ventilation problems if not installed properly
• Retro fit measures do cause upheaval

The Council has information and advice on the cost of living crisis and support available to households, communities and businesses.

One of the challenges is to help people find the best pathway forward with the resources that are available to them. With so many different options available and a confusing number of funds to apply for, there is a possibility of individuals giving up before they even begin the process or spending a lot of time going in circles. There is a pressing need to simplify the systems in place to support the domestic switch to net zero. 

An example of a resource available, is the Greener Homes Network a database of case studies of homes which have installed energy efficiency and renewable energy technology.

Types of heating systems

Storage Heaters

• Strengths: 
  • Affordable to install.
  • Available now.
  • Once we are connected to the UK Transmission network it can be classed as green.
  • Opportunities for smart grid and demand side management
• Weaknesses/Limitations: 
  • Can have high running costs.
  • Benefits from a suitable electricity tariff and high building performance
• Unknowns:
  • Requires a suitable electricity tariff

Heat Pumps

• Strengths: 
  • Efficient.
  • Proven technology.
  • Financial support available
• Weaknesses/Limitations: 
  • Benefits from being installed in a well-insulated property.
  • High upfront cost.

Hydrogen

• Strengths: 
  • Green.
  • Versatile
• Weaknesses/Limitations: 
  • Not currently available
• Unknowns:
  • Government policy is currently moving away from the use of hydrogen as a heat source.
  • Rules and regulations for use in heating

District Heating

• Strengths: 
  • Green.
  • Affordable.
  • Insulated from global energy markets.
  • Scottish Government have set targets to support increased deployment and uptake
• Weaknesses/Limitations: 
  • Geographically limited to pipe network
• Unknowns:
  • Affordable clean heat source.
  • Business model development for deployment

Biomass and Biofuels

• Strengths: 
  • Direct or near direct replacement for fossil fuels.
  • Short to medium term alternative to reduce carbon emissions.
  • Available now for some applications.
  • Future fuel sources include seaweed, willow and agricultural crops
• Weaknesses/Limitations: 
  • Sustainable feedstock.
  • Emits greenhouse gasses.
  • From 1st April 24 SG will bring in regulations to prohibit the use of direct emissions heating systems in new buildings with plans for all buildings by 2045
• Unknowns:
  • Long term sustainability.
  • Technology development for carbon capture at all scales.

Wind 2 Heat

• Strengths: 
  • Based on known technology.
  • Low carbon.
  • Flexible.
  • Can operate on a range of scales.
  • Can integrate with the electricity network to provide wider benefits.
• Weaknesses/Limitations: 
  • Difficult to finance route to market.
  • Higher capital cost than a grid connected project.
• Unknowns:
  • Regulatory approval of innovative system set up.

Fossil Fuels (oil, gas, coal)

• Strengths: 
  • Available now
• Weaknesses/Limitations: 
  • Emits greenhouse gasses.
  • From 1st April 24 SG will bring in regulations to prohibit the use of direct emissions heating systems in new buildings and the phasing out the need for fossil fuelled boiled with a target of no replacement boilers by 2025 with plans for all buildings by 2045

Storage Heaters

How they work

Storage Heaters are one of the most common heating systems found in Shetland.  They store off-peak electricity as heat.  Heating elements, heat ceramic bricks at set times, this heat is then released slowly.

There are various types of storage heater available.  Modern storage heaters are insulated to allow them to hold their heat for longer and have programmable timers, fans and thermostats making them more controllable than older style storage heaters. 

Future

Storage heaters are a common type of heating in Shetland.  As electricity becomes greener they will be classed as a green heating system.  However, the challenge for storage heaters relates to ensuring they are affordable to run and opportunities such as their role in grid balancing are progressed.

Heat Pumps

How they work

A heat pump captures heat from outside and moves it inside.  The heat pump uses electricity to do this, however the quantity of heat moved is greater than the amount of electricity required to power the system.

There are 4 types of heat pump: air, exhaust air, ground, and water.

There are also hybrid options available which combine a heat pump with another heating system.  For further information see the Energy Saving Trust website.

Heat Pumps are versatile and can be used for a single property or for district heating, either as a heat source for the network or each individual property can have their own heat pump connected to an ambient loop. 

SHE&P has investigated the potential of using heat pumps in the sea in Lerwick as a potential heat source to expand the Lerwick District Heating Scheme.  The project wasn’t progressed but could be an option in the future

Current situation

A wide range of heat pumps have been installed throughout Shetland.  Air source Heat Pumps are the most noticeable as they have an external unit installed outside the property.  One of the largest heat pump installations in Shetland is at the Sumburgh Lighthouse.  This system includes 14 boreholes each around 120m deep connected to two heat pumps to provide heat to the whole site.  The site also benefits from a solar array to meet a significant proportion of the energy needs of the site

Future

Heat pumps will play a significant role in the decarbonisation of heat in buildings.  The Scottish Government have highlighted them in the Heat in Buildings programme with various strands of action to accelerate deployment.  The largest challenge in the transition of heating systems is the initial upfront cost with grants and low interest loans available.  However the maximum benefit will only be achieved if the energy efficiency of the building is also improved.

Wind to Heat

How it works

Energy from a wind turbine is stored as heat, either as hot water, storage heaters or a thermal battery.  The system can work on a range of scales from micro schemes such as those used in community buildings through to large scale wind turbines with large thermal storage tanks.

The projects can maximise energy generation from a curtailed grid connection

Current situation

Wind to Heat projects were installed in community buildings throughout Shetland but there were a range of technical challenges, particularly with the robustness of the early technology used and the backup to servicing. 

Future

Wind to heat installations are going to become more important and widespread as capacity on both the distribution and transmission networks decrease.  The installations are based on known technology and there are many opportunities to develop this further.

Biomass

How it works

Biomass pellets, chips or logs are burnt in a boiler.  Biomass heating works on a range of scales from individual buildings through to a heat source for district heating.

Current situation

Biomass heating systems are used throughout Shetland on a range of scales but a key limitation is the need to import biomass.

Case study - Scalloway District Heating scheme

Scalloway district heating network was developed in 2016, with an annual heating demand of 1,000,000 kWh.

The heat source is 2 * 250 kW Froling biomass boilers, using locally produced, dried wood chip for energy.

Fuel is stored within the integral silo with 100m3 capacity

Each individual heating demand is monitored remotely with its own online resource, which provides both back up history on performance, but also notifies engineers of faults and maintenance requirements.

The Scalloway District heating scheme project currently supplies energy to the following public buildings: Scalloway Primary School, Scalloway pool, Health centre, Nursery and Games hall

The development cost for the entire project was £500,000 and was funded by

• Developer own resources
• Scottish district heating fund
• RHI support

Key points

• Back up energy is provided by existing oil fired boilers.
• Carbon savings are in the order of 260 tonnes per year.
• Fuel is manufactured locally in Lerwick.
• All maintenance and servicing is carried out by local HETAS certified engineers.

Future

Biomass heating will have an important role in the short to medium term, but the Scottish Government has set targets to phase out the use of direct emissions heating systems in Scotland by 2045.  The first significant target is to end the use of direct emissions heating systems in new build homes warranted from 2024.

In the short to medium term biomass can displace some hydrocarbon-based heating systems across the isles but a key challenge is finding a sustainable local source of biomass. 

An expansion of the industry would increase the fuel demand and therefore allow the direct importation of wood pellets in bulk by sea, which would in turn reduce the carbon footprint further and end the need to import on the ferry from Aberdeen.  Fuel would be stored in a quayside silo and distributed by road tanker.

Hydrogen for heat

How it works

Hydrogen can be either used directly in a boiler to produce heat in a similar way to gas or LPG or the surplus heat produced through the electrolysis process can be captured for use either directly or within a district heating system.

Future

It is unlikely that there will be a hydrogen gas grid in Shetland but there are many opportunities to maximise the benefits of hydrogen use in Shetland through co-location and consideration of the whole energy system. 

We will statements for building and heating

• We will support the development and delivery of LHEES.
• We will seek to find local solutions to the delivery of energy efficiency measures.

Transport

Current Situation

Transport is a significant source of emissions in Shetland.  Our remoteness means a higher dependency on sea and air transport and the linear geography of our settlements on 14 islands requires high levels of road and ferry travel.  Road transport is an area where there is advancing technology available, such as electric cars, to transition away from using petrol or diesel.  That may help to replace certain vehicles in some uses but there are questions with future global sustainability due to finite mineral resources such as lithium.  The technologies for other clean fuel solutions are beginning to emerge such as hydrogen or biofuels but there is a long way to go before these can be generally deployed in road and sea transport. Keeping our communities resilient in such complex circumstances is of paramount importance but our future transport system will not be a like for like switching of technologies. In the course of change we must support improvements to public health through reducing emissions and overcome other challenges such as rural and island inequalities.

We must achieve lower levels of car ownership with more active travel, use of public transport and the adoption of different vehicle ownership models such as car pools and increased car sharing.  Improved digital connectivity is required to reduce the need to travel.  We must also consider the logistic challenges for our businesses and the delivery of services as these are vital for our long-term sustainability. 

ZetTrans are currently undertaking a full revision of the Shetland Transport Strategy, to take account of new environmental, societal and economic challenges and strategic and technological developments. For that reason, the Energy Strategy will be confined to transport fuel requirements.

To reduce emissions, all vehicles need to utilise 100% renewable/clean energy, whether that is renewable electricity, clean hydrogen, biofuels or synthetic fuels. The transition will increase electricity consumption both directly through the charging of electric vehicles and for the production of clean fuels such as green hydrogen and its derivatives.  The transition will also require new charging and refuelling infrastructure.

Fuel types for Propulsion

Hydrocarbons (Diesel, Petrol, MGO, LPG)

• Strengths:
  • Available now.
  • Current use and enabling infrastructure in place.
• Weaknesses/Limitations: 
  • Legislation and targets in place to reduce emissions.
  • Shetland is highly reliant on fossil fuels for transport.
• Unknowns:
  • How transition will be managed.

Batteries

• Strengths:
  • Very efficient.
  • Available now.
  • Rapid technology developments.
• Weaknesses/Limitations: 
  • Range/Duration is very limited.
  • Charging infrastructure.
  • High demand for batteries for a range of other applications.
  • Safety.
• Unknowns:
  • Maximum economic range.
  • Recycling and the circular economy.

Hydrogen

• Strengths:
  • Various use options including dual fuel, and fuel cells.
• Weaknesses/Limitations: 
  • Availability of hydrogen.
  • Significant space required to store the fuel limiting range.
  • Safety concerns.
  • Cost of fuel cells or efficiency of direct combustion.
• Unknowns:
  • Cost trajectory
  • Standardisation of rules and regulations

Ammonia

• Strengths:
  • Cost-effective long-range fuel.
  • Already transported on tankers in large quantities.
  • Existing market for ammonia.
  • Known risk profile.
• Weaknesses/Limitations: 
  • Significant safety concerns around its toxicity.
• Unknowns:
  • Standardisation.

Methanol

• Strengths:
  • Easy to retrofit.
  • Relatively safe.
• Weaknesses/Limitations: 
  • Source of affordable green carbon to make the fuel.
  • Production efficiency.
• Unknowns:
  • Cost of green carbon capture

Biofuels

• Strengths:
  • Easy to retrofit
• Weaknesses/Limitations: 
  • Limited availability
• Unknowns:
  • Optimum use of feedstock