Shetland Energy Hub must move quick to remain ‘ahead of the game’, says project leader

Sullom Voe Terminal. Photo: EnQuest

Shetland must continue developing its Energy Hub proposals “at pace” if it is to fend off competition from other regions, according to one of the project’s driving forces. 

Douglas Irvine, project lead for the SIC, told a full council meeting today (Wednesday) that it was important to “remain ahead of the game”.

Mr Irvine said that currently Shetland was “slightly ahead” of some regions but also behind “one or two”.

“If we want to progress we have to do it now,” he said. 

“We can’t wait, if we set this back even a few months, our ability to attract government funding will be more limited.”

“We need to keep moving at pace to remain ahead in the game.”

Last week, the SIC announced its partnership with the Oil and Gas Technology Centre (OGTC) to develop plans for the Energy Hub, which aims to deliver clean and sustainable energy. It is also hoped to help Shetland’s existing oil and gas industry achieve carbon net zero targets.

Plans for the hub are still in early stages with no specific projects agreed. However, ideas such as an offshore wind farm east of Shetland, and the creation of hydrogen from natural gas or electrolysis, are some of the ideas being suggested. 

Smaller scale community projects would also be developed through the hub project. 

Mr Irvine’s report to the council said the hub could generate £5 billion of revenue for the region, remove carbon emissions by eight million tons, and create 1,750 jobs. 

He said the formative phase would look at which options are viable commercially and which were not. 

While the council has already committed £250,000 to the project, Mr Irvine said funding from the Scottish and UK governments as well as the Highlands and Islands Enterprise would be needed.

He also said private sector investment was “core” to the project – and a steering group was working on that.

Lerwick North councillor Stephen Leask had questioned how strong the council’s position – and how much financial risk it could face. 

Mr Irvine said most of the risk would be taken by the major investors from the energy industry, rather than the SIC.

Martyn Tulloch, who leads the Net Zero Solution Centre, at OGTC, told the meeting that while other regions were advancing hub projects, with one in Humberside said to be the furthest advanced, he was not aware of any that had received Scottish government funding. 

“We have been approached by other regions but this is very much our sole focus at the moment,” he added. 

SIC leader Steven Coutts said the hub was a “crucial” project to Shetland’s future – and one that the council could not progress alone. 

He added it would need to bring “significant community benefits” .

“We want to see people thrive in Shetland with a strong and resilient community,” he added. 

Councillors agreed to progress the project into its “formative phase”, which will see the project team work with the energy industry and government agencies to identify next steps, including research projects and trials. 

Consultations will also take place with the community, businesses and other relevant interests 

A funding application is expected to be submitted to the Scottish government next month.