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  • Ofgem consultation on the costs of the new energy solution for Shetland

    Shetland is not currently connected to the electricity network that serves mainland Great Britain so has to be capable of meeting all its own electricity needs at all times.

     
    Lerwick power station
  • Lerwick Power station is reaching the end of its operating life. Ofgem, regulator of the energy industry, asked SSEN, operating as Scottish Hydro Electric Power Distribution (SHEPD), to undertake a tender for an optimum solution to meet Shetland’s electricity needs from 2020 onwards – one that is modern, efficient and ensures security of supply.

    Following an extensive consultation in 2014 and competitive tender process, SSEN has confirmed that the recommended solution is a subsea cable link provided by National Grid Shetland Link Ltd, with on island back up generation provided by Aggreko UK Ltd. 

    If you have any questions about the consultation, or the events, please contact Ofgem directly at: RIIO-ED1@ofgem.gov.uk

    Further information, including details of the consultation, can be found online via Ofgem’s website: https://www.ofgem.gov.uk/publications-and-updates/consultation-cost-new-energy-solution-shetland.

    SSEN identify preferred bidder to meet Shetland’s future electricity needs

    We have now completed the tender evaluation process and can confirm that the preferred bid for a new energy solution for Shetland is a joint project between National Grid Interconnector Holdings Ltd (NGI) and Aggreko UK Ltd, which combines a 60MW High Voltage Direct Current (HVDC) subsea cable link to the GB electricity network, alongside on-island backup generation.

    Read the full article here.

  • The proposed 260km link will run from Dounreay in Caithness to Scalloway on Shetland’s Mainland with a further underground cable to Gremista, near Lerwick, where the back-up generators will be housed. Once operational, it will provide a reliable electricity network supply for Shetland for at least 20 years.

    In line with the agreed regulatory process to establish Shetland’s new energy solution, SSEN has now made a formal recommendation to the energy regulator, Ofgem, to approve the proposal. The next stage in the process will be a period of public consultation by Ofgem in summer 2017 to give all stakeholders, including the people of Shetland, the opportunity to comment on the proposed solution and the regulatory arrangements.

    If regulatory approval is granted, contracts are expected to be signed later in 2017 followed by a three-year delivery period before the new energy solution is operational, expected by the end of 2020.

    In the intervening period, all Shetland’s electricity needs will continue to be met from existing generation sources on the islands, including Lerwick Power Station, which will remain operational until such time that the new energy solution is established.

  • Project background

    A new energy solution for Shetland

    Shetland is not currently connected to the electricity network that serves mainland Great Britain.  This means that the islands have to be capable of meeting all of their own electricity needs 24 hours a day, 365 days a year.  Generation and demand in Shetland have to be in balance at all times to keep the lights on.

    What’s the problem?

    At the moment, the main sources of electricity generation which can respond to customer demand are Lerwick Power Station and Sullom Voe Terminal Power Station.  Lerwick Power Station is nearing the end of its operational life and the availability of Sullom Voe Terminal Power Station in the long term is uncertain.

    Who’s involved?

    Scottish and Southern Electricity Networks (SSEN), operating under licence as Scottish Hydro Electric Power Distribution, owns and operates the distribution network of overhead lines and underground cables across the north of Scotland. Every year, we invest millions of pounds to maintain and improve the network that serves our customers.  In Shetland we currently also decide when the island power stations need to run to meet customer demand.

    SSEN is regulated by Ofgem which is responsible for protecting the interests of consumers and ensuring they have access to an affordable, secure and sustainable energy system.  Major investment decisions, such as a new energy solution for Shetland, require approval by Ofgem to ensure they are made on an economic and efficient basis.