Fuel poverty

Fuel poverty, where a household spends more than 10% of its combined income on energy in the home, continues to be a major problem in Shetland. ORION aims to help tackle fuel poverty and improve community wealth by providing power and fuel locally as well as becoming net exporters of electricity and future fuels and creating highly skilled jobs. The benefits of the project extend beyond Shetland, supporting communities in Scotland, the UK and Europe by creating and exporting clean power and fuel.

There are a number of areas ORION will focus on:

Remove Shetlanders’ reliance on fossil fuels:

• Marine gas oil, diesel, petrol and kerosene made up 63% of Shetland’s energy mix in 2018. (Pure Energy, 2020)
• Electricity, hydrogen and clean fuels generated from wind energy could replace these fossil fuels and reduce Shetland's carbon footprint.

Reduce importation requirements, which adds to the carbon footprint and inflates costs:

• Energy prices are over 60% higher than the UK average due to transportation and storage costs. (SIC Energy Efficiency team)

Provide alternative fuels for transport, power and heating:

• In 2018, 197GWh of electricity was generated and consumed in Shetland, of which 79% was generated using fossil fuels. Some 20% was wind generated while solar, tidal and hydro produced 1%. (Pure Energy, 2020)
• A total of 195GWh of road fuel and 471GWh of marine gas oil was consumed during 2018, as well as 120GWh of aviation fuel. (Pure Energy, 2020)

Transformational change towards isles-based generation of clean, affordable energy:

• Energy usage in Shetland is 27% higher than the UK average due to the cold climate and inefficient housing stock (SIC Energy Efficiency Team)

Scottish Government figures confirm that island communities are more vulnerable to fuel poverty than mainland inhabitants.

Action is needed to tackle the issue and ORION plans to play its part.

SIC aims to lead the transformation of Shetland to a carbon neutral community, through the works incorporated in the council’s net zero route maps. ORION will be a large and vital part of Shetland becoming carbon neutral through the provision of clean, affordable energy.

Energy Security

• 105,560 barrels of crude oil per day, above 5 million tonnes per annum, is produced from the offshore region neighbouring Shetland which is then processed and transported from Shetland via the Sullom Voe Terminal (SVT) (Shetland in Statistics, 2017)
• 90,000 barrels equivalent of gas per day is produced from the offshore region neighbouring Shetland which is then processed and transported from Shetland via the Shetland Gas Plant (SVT) (Shetland in Statistics, 2017)

Though the offshore Shetland region is a major extraction area for oil and gas in the UK, the price of the fossil fuels is one of the highest in the country.

This seeming contradiction is explained by the lack of a refinery on the isles. Oil extracted off Shetland is shipped away to be refined before coming back to Shetland at a much higher cost for use in transport, heating, etc.

As the world moves away from oil and gas, the price of renewably generated energy from sources like wind and solar should decrease. This has already begun to occur. According to one report, 62% of renewable power generation in 2020 had lower costs than the cheapest fossil fuel options.

However, simply switching away from fossil fuels to renewably generated electricity will not be enough to reach net zero targets for Shetland as renewable electricity generation will only decarbonise a further 13% of Shetland’s energy mix.

The remaining energy mix is reliant upon the heavy emitting fossil fuels like marine gas oil and aviation fuel. This highlights the requirement to pursue other low carbon alternatives, such as hydrogen and hydrogen fuel derivatives.

Community Benefit

There are other initiatives such as Shetland Community Benefit Fund to help the isles monetarily benefit from commercial renewable energy projects that impact the local community. Viking Energy and Shetland Aerogenerators have both signed agreements with the benefit fund, and other proposed wind farms are considering contributions. For more information on what funding is available, please visit the SCBF website.