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Shetland Islands Council wants more community benefits in the form of cheaper energy prices

Publication: Shetland News

Shetland is ripe for the creation of a publicly-owned energy company to strike favourable deals with energy producers to seriously tackle the islands’ crippling fuel poverty issues, according to the council.

Maggie Sandison | Photo by Shetland News | Licensed for use on Scottish Beacon | All rights reserved

The idea, which was first floated by local energy consultancy Voar earlier this year and is seen as a crucial component in the discussions on the so-called ‘Shetland tariff’, is now included in a lobbying document Shetland Islands Council (SIC) is taking to governments and Edinburgh and London.

The Shetland Forward document, which can be found here, seeks partnership with the government and appeals to the country’s sense of fairness.

It focuses on three major projects the SIC is keen to move forward during this and future councils. They are: Energising Shetland, the Short Crossings Project and connecting everybody to superfast broadband.

Chief executive Maggie Sandison said the council has had some positive feedback from the Scottish Government and the UK Government in the form of the Scotland Office.

A meeting with Ofgem, the energy regulator, has now also been agreed, she confirmed.

Sandison said it was clear for everybody to see that the Isles are an energy powerhouse that has been supplying the UK with ‘old’ energy for decades and was about to become a major producer of ‘new’ energy – yet people’s energy bills continue to be the highest in the country.

With reference to Ofgem’s recent proposals on social tariffs, she said the door was open to discuss island tariffs that could potentially reduce local energy bills from an average of £4,738 annually to the current price cap of £1,923 for an average UK household.

She also said in an interview with Shetland News that although there was no mechanism in place for community benefit payments from offshore wind, the community did not expect anything less than what is provided by onshore developers.

The three companies working on developing offshore wind farms 20 miles to the east of the islands – which would have a total capacity of 2.8GW – have agreed to pay £56 million in auction fees to Crown Estate, plus around £12 million per year once the project is generating. she said:

“All goes to Edinburgh, and none of it comes to Shetland.

“The SIC has been pursuing a position that the host community needs to see benefits back from offshore wind.

“We want to make sure that energy is treated with a degree of parity, and what we are saying is that we should not always assume that the community benefit needs to come in terms of cash into a community vehicle.

“There is also the potential to covert that into cheaper energy. (…) Ofgem has offered to come and talk to us about their proposals around tariffing.

“We will soon be operating almost predominately on electricity from onshore wind, and we will still be paying a price that is associated with gas, which is utterly nonsense.

“We currently have 750MW of wind planned and/or consented, and we use 50MW at peak. I absolutely accept the fact that you have to pay for electricity, but currently, our energy costs are twice the national average, and that is because of our location.

“So, if they [Ofgem] could just bring us in line with everybody else, that would make lives bearable for Shetland and address some of the cost of living challenges.”

None of this will be happening overnight, and Sandison is well aware that households and businesses will be faced with high energy bills again this winter. She asked:

“We are trying to negotiate to see something different happening here in Shetland, and of course there is a chance that we won’t succeed. But why give up trying?

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