What would Shetland's energy market look like in an ideal world?

Daniel Gear of Voar Energy, a Shetland-based company specialising in low-carbon developments, spoke with The National about what an ideal future for the area might look like.

As part of our McCrone Report series, we already detailed how rural Scotland is being hit harder by the cost of living crisis when it comes to soaring energy bills.

Gear says that he believes community ownership is the best way forward in response to this.

Why is community ownership the way forward?

“It would be affordable, reliable and resilient. Sustainability is obviously a big part of that as well.”

That’s Gear’s response when asked what Shetland’s energy market could look like in the future.

It’s an area that’s not connected to the National Grid and one which uses more units of electricity given the colder climate.

Gear explained: “One of the first things we would have to change is this mechanism whereby everybody here gets their energy at the same rate as those on the UK mainland.

“On the face of it, that sounds fair, but you have to remember the environment we’re in, we’re using more individual units.”

In light of this, he believes that Shetland taking full control of its own energy market represents a better way forward.

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“One big opportunity is local ownership of energy infrastructure, that would include the grids, the networks and all these different elements," Gear explained.

“What we don’t want to see is some sort of scenario where we’re taking the tools that we’ve got today and just doing things slightly differently.

“There needs to be systemic change.”

Part of this would see Shetland creating a “specific islands tariff” for electricity costs that would offer compensation to communities.

What might community ownership look like?

Gear acknowledges that there would be a long legal process to go through before community ownership was possible but, nonetheless, he has some ideas about what it could look like.

While there are a variety of forms this could take, the option he believes is best is for the local authority itself or an arms-length body to take control.

“The best thing to do is get an opportunity where we take an early stake in a project  because that’s when it’s the most valuable," he said.

“The payoff for that early investment is absolutely enormous.”

Community ownership would also mean that any energy projects developed in Shetland would be done either “by or with” the area rather than “to” the people living there.

“We speak about community benefit a lot and through analysis we’ve done at Voar, we know that having a stake in a project is of much more benefit than a big company building something and paying disruption payments.

“They might pay £2 million a year to build an offshore wind farm but it could be a project that is earning 500 times that in terms of revenue.”

In Shetland, this potential loss of value is known as having “gone oot the Sooth Mooth”, in reference to it leaving Shetland by the south mouth of Lerwick Harbour.

What kind of energy would Shetland produce?

Gear believes Shetland could become a hub for renewable energy generation given it is one of the “windiest places in Europe”. 

He adds that there are “few places on earth” as uniquely situated in comparison to the region.

Gear said: “Basically anything you can do with wind. Shetland is not a sunny place. We have all the critical ingredients to be able to efficiently deliver these commodities that will be in demand in the future.

“We can also make hydrogen through electrolysis by splitting water molecules into hydrogen and oxygen components, both of which have some utility.

“Shetland is obviously surrounded by water.”

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As good as all this sounds, though, Gear stressed that it must be done fairly, keeping in mind the potential impact of any new projects on the fishing industry. 

“We’re surrounded by all this and it is an attractive place for anybody that’s interested in developing these sorts of industries," he added.

“What we don’t want is a flag-waving campaign – for want of a better phrase – where all of this is done to us, rather than by or with us. That’s critical.

“Our biggest industry is the seafood industry; the fisheries are a huge contributor to our local economy and we shouldn’t turn our back on that for the sake of producing clean energy.”

What’s holding Shetland back?

Gear explained he thinks Shetland is in possession of a “once in a lifetime opportunity”, one which exceeds that presented by the arrival of oil in the 1970s.

He went on: “The biggest barrier to achieving something like this is in establishing the structures that can allow the community to make early investments in exchange for that long-term ownership stake.

“Local authorities are inherently risk-averse, they have to be prudent with the funds of the community they serve, especially when those funds are increasingly under pressure to deliver the core services of our society.”