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An Energy Trust for Shetland

Written by Tom Wills

April 28, 2021

I’ve been working in the energy industry since I got my first job in offshore renewables in 2007, so I think about energy issues, prices and availability a lot. I also think a good deal about fuel poverty.

Fuel poverty can be mentioned a bit glibly sometimes, but the number of people in fuel poverty in Shetland is not something to be glib about. It is something to be angry about, and something which we should all want to remedy.

One in three households in the isles are in fuel poverty, meaning they spend more than 10% of their income on heating. One in five households are in extreme fuel poverty (spending more than 20% of their income on heating) and Shetland has three times the national average of homes deemed to be the least energy efficient. Many more are forced to ration their energy usage and end up with a cold, damp home with the negative physical and mental health impacts that this brings. When you consider the billions of pounds of petroleum products that have passed through Sullom Voe over the decades, this really is an outrage. In the 1970s, Shetland made it possible to get North Sea oil ashore, in a hurry, with minimal fuss and with our council and our communities all pulling together. I’m not saying that there were no rewards for that, because there were, in terms of oil funds, infrastructure and full employment, all the way to the present day. But the opportunity to eliminate fuel poverty was missed.

Shetland will now play an important role in achieving climate change targets and per capita, we will probably play a bigger part than any other community anywhere, given the scale of the Viking Energy windfarm.

But again, there has not been enough organised discussion or ambition about how, as a quid pro quo, Shetland’s high level of fuel poverty could be tackled. This should change.

There are two important factors here, both of which I approach with caution, because I know the community wealth that Shetland has built up must be managed carefully. There are however significant public funds in this community, held by Shetland Islands Council (SIC) and Shetland Charitable Trust (SCT). Both organisations will benefit from Viking Energy. I think we should explore whether the SIC and SCT could, possibly with further support from Crown Estate funds (another ongoing source of income), set up an energy trust.

A Shetland Energy Trust – which could be a type of Energy Service Company (ESCO) – could act as a local electricity retailer, negotiating with SSE for a reduced wholesale electricity price (or securing this via some other mechanism like a Registered Power Zone or tariff derogation), as well as designing, funding and implementing energy saving projects and insulation schemes. I’m sure that Shetland Heat Energy and Power and many other local companies and individuals working in the net zero energy sector would have much to contribute to this discussion.

Why do I think a Shetland energy trust would sense? Well first, because the power is being generated here, and sold from here on the UK electricity market. And secondly, there is talk of the oil industry buying renewable energy to power their offshore installations. The Norwegians do this already. I would be amazed if the oil industry ends up paying anything like the price that the UK consumer does. There is a real moral duty for all concerned to provide electricity to Shetland at a more affordable price. If elected I would engage with SSE, the SIC and the SCT and others to explore how such a scheme – a local energy trust – might work. Shetland already has a charitable trust, an arts trust, an amenity trust and a leisure and recreation trust: I think we should have an energy trust that is dedicated to eliminating fuel poverty and decarbonising energy use.

This idea could help locals who live in one of the most energy-rich communities on the planet, but continue to pay more to heat their homes than almost anyone else in the country.

Our reserve funds do need to be prudently managed, but there is a strong case for investing more of this community’s wealth into this community.

I have made it almost to the end of this blog without mentioning the constitution and I do believe that we can do more with the powers Scotland already has, but it is worth remembering that energy policy is still reserved to (controlled by) the UK Government. Unfair transmission charges and tariffs are the fault of Westminster, not Holyrood. Energy is just one more area where Scotland would benefit from more control over its own affairs.