Scottish and Southern Electricity Networks (SSEN), operating under licence as Scottish Hydro Electric Power Distribution (SHEPD), can confirm it has now completed the tender evaluation process to secure the future of Shetland's electricity supply.
The preferred bid for a proposed 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.
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.
SSEN's Director of Customer Operations, Dale Cargill, said:
"We are pleased to have reached this important milestone in securing the future of Shetland's electricity supply.
"Working closely with the energy regulator Ofgem, our priority throughout the tender process has been to find the optimum solution in terms of economics, efficiency and reliability to meet Shetland's long-term electricity needs.
"We would like to thank all bidders who participated in the tender process for the range of solutions put forward for consideration."
SSEN's transmission business, Scottish Hydro Electric Transmission plc, is also developing proposals for a HVDC transmission connection to the main GB transmission system in response to the potential need to provide connections to large scale renewable developments on Shetland. This proposal is unaffected by the new energy solution tender and SSEN continues to await the outcome of a UK Government consultation on the treatment of non-mainland onshore wind before it will be in a position to progress the development of the transmission link.
Throughout the tender process SSEN has been supported by specialist consultants The Renewables Consulting Group, Mott Macdonald, WSP Parsons Brinckerhoff, Baringa, and CMS, with the whole process overseen by an Independent Auditor, Fichtner, who has provided regular updates to Ofgem.