Trustees agree to £3.6 million expansion in district heating scheme for 330 new properties

Shetland Charitable Trust today agreed to invest a further £3.6m in Lerwick’s district heating scheme to allow it to expand to around 330 new properties.

The expansion will be thanks to a Wind to Heat renewable energy collaboration with power company SSE, and will become the biggest wind to heat project of its kind in the UK.

Shetland Heat Energy and Power Ltd (Sheap), a company wholly owned by Shetland Charitable Trust, has already won plaudits for its district heating scheme that feeds hot water into 1,000 homes and 100 non-domestic properties.

The scheme currently uses heat from the local waste to energy plant’s incinerator to heat water and has reached capacity. Sheap has a growing backlog of potential customers wanting to connect to the system.

Now, in a UK first, Sheap intends to proceed with the Wind to Heat project, using energy from wind turbines to heat water in a huge kettle-like thermal store. This will allow an extra 300 homes and 30 non-domestic properties to sign up, meeting some of the demand to get away from oil-fired and electric heating.

The trust is confident the project will pay for itself and provide a return for its investment to help fund the various organisations it supports through its £11m annual budget.

Sheap hopes to build the capacity thermal store in the grounds of Lerwick power station this year, ready for use next winter. It will take a further two years to complete the 330 new connections.

The project still hinges on SSE Renewables receiving planning permission to erect three turbines on Luggie’s Knowe, north of Lerwick. A decision is expected shortly following a public consultation, which has resulted in no outstanding objections.

If approved, the turbines will be the largest so far in Shetland. Construction is planned to start in 2013, with generation starting the following year.

SSE Renewables is offering Shetland Charitable Trust the opportunity to take a 50 per cent stake in the turbines, however that decision will be taken later this year.

The new scheme will form part of the NINES (Northern lsles New Energy Solutions) project.

This seeks ways to allow more renewable energy projects onto the Shetland power grid, which has limited capacity because it is not connected to the main UK electricity network.

Shetland Charitable Trust/Sheap has attracted £800,000 from the European Regional Development Fund towards the £2m cost of the thermal store and associated equipment.

The trust will invest the remaining £1.2m in the store, along with £2m on the infrastructure to connect more properties. A further £400,000 is being invested in the business to provide working capital, increasing the value ofthe trust’s shareholding to £1m.

Sheap chairman and councillor-trustee Gary Robinson said: “This is a very exciting project for Lerwick and Shetland, and we believe for the UK as a whole.

“The Lerwick district heating scheme has attracted people from all over the world who wish to replicate its success. This latest innovation, the first of its kind in Britain, will no doubt attract even more interest at a time when everyone is focused on reducing energy bills and environmental impact.

“We are especially delighted to have found a way to connect more customers to the popular heating scheme, which has proved itself beyond question since it opened in 1998.”

Shetland Charitable Trust financial controller Jeff Goddard said: “The district heating scheme is a success for the trust as it demonstrates we can improve the lives of local residents, help the environment and make a satisfactory return on our investment at the same time. I would call it a win/win/win scenario.”