Sullom Voe is the heart of Shetland’s energy future

By David Thomson, Chief Executive of Shetland Aerogenerators Ltd.

Coal isn’t normally the first thing that springs to mind when discussing energy in Shetland but we’re certainly at the coalface of the transition. The amount of roadworks north of Lerwick is our current daily hassle, replacing turbine section convoys from a couple of years ago.

More and more of this disturbance is for change that would’ve happened here soon anyway. Even if the Viking Wind Farm hadn’t been built and the associated subsea transmission link was not required then we would’ve still had to renew much of our electrical infrastructure to keep it up-to-date and ready for the demand of the future. As a relevant example: Sullom Voe Oil Terminal wants to decarbonise. The cables going into those dug up roads will allow the power station at the terminal to close and massively reduce emissions. That’s good right? Well yes. Unless you work there.

Electricity is just a fraction of our energy use. The bigger bit of the challenge ahead is how we switch our heat and transport systems to types that aren’t constantly spewing fumes, and how we begin to end our crippling dependency on fossil fuels. That’s becoming urgent for most people living in Shetland. The levels of fuel poverty we have demonstrates that it’s vital we swiftly reduce the influence gas prices have on our electricity bills.

As a quick reminder, it isn’t windmills and net zero that mean your bills are expensive. We could take all the net zero bits out, but we’d have to replace most of that with something even more expensive instead, so that isn’t a good idea regardless of whatever any ill-informed political commentators say. It has only been a few years since coal was a big power source in this country. We managed to stop using coal. That’s good right? Well yes. Unless you’re a coal miner. It's gas prices that are causing the problem now. We need to do to gas what we did to coal.

So, we’ll all be much better off once we move away from oil and gas? Well yes. Unless you work in oil and gas. There are a lot of Shetlanders who do. Or unless you work for a company whose turnover depends in part on activity related to oil and gas. There are a lot of Shetland companies in that boat.

It is worth emphasising how important the terminal is to Shetland. There are over 500 jobs at the site. The Council makes up to £8 million a year from port activity. It has been worth 15% of the entire local economy for many years and sustains a fair few local companies that would struggle to fully diversify. Social, political and financial pressures are really squeezing the oil majors. We’re already seeing job losses at facilities including Grangemouth and Mossmorran. Sullom Voe isn’t immune to these pressures.

No-one is suggesting the site might shut up shop tomorrow, but long-term throughput is highly uncertain. Many have made the comparison that our oil and gas workers risk becoming the coal miners of this generation. Shetland risks losing that industry, and it will be global influences that decide, not us.

As jobs begin to go then the rest of Shetland’s economy suffers and families without good alternatives start to leave. As port income drops then the Council’s ability to provide public services becomes harder. This is barely theoretical. This community erosion could arrive here in merely a few years. Just ask Grangemouth.

Inconveniently, the climate challenge and our fuel poverty challenge (plus several other good reasons) mean we are absolutely going to need to decarbonise regardless. We’re about to make a huge step towards decarbonising our electrical system with the Viking Wind Farm feeding through the transmission system into our local grid. As things stand, however, it doesn’t look like we’re going to make much progress on the heat and transport situation before well into the next decade.

Recently, Veri Energy – a subsidiary of EnQuest – launched a programme towards the production of e-fuels at the terminal. Statkraft’s hydrogen and ammonia project nearby at Scatsta has broken cover. My company’s Neshion Energy Park project neighbouring the terminal is exploring how we can supply and support these next generation of projects and be not just another wind farm. Shetland’s clean energy resources will be used in Shetland to transform the fuel chain we use every day.

Despite all the disturbance going on around us, we might need to ask what more we can do to encourage the next stages of the transition. The renewable energy transition is an opportunity in terms of climate, in terms of economics, in terms of community wealth building.

If we get the timing right, then we get the best outcome for Shetland in regards both decarbonising our energy system (which we’re going to have to do anyway) and providing alternatives for the threatened bits of the Sullom workforce.

Shetland’s journey to clean energy is well underway and we’re seeing the scale of change involved in just the early steps of that transition. We need to make sure we get a Just Transition, and the future of Sullom Voe Oil Terminal is critical to that in more ways than one.