News / Ofgem consults on Shetland smart grid
ENERGY regulator Ofgem is inviting comments on plans for a smart grid in Shetland that should save money and cut emissions while allowing a smaller power station to be built in Lerwick.
Scottish Hydro Electric Power Distribution wants to go ahead with the £34.5 million NINES project – Northern Isles New Energy Solutions – which it believes will reduce demand on a new power station by almost 30 per cent.
Ofgem has told SHEPD they must deliver an integrated plan for Shetland’s future electricity production by 31 January 2013, including plans for a new Lerwick power station.
The existing oil-fired power station was opened in 1953 and still runs 40 year old generators that breach current emissions regulations, and leaks 60 per cent of its energy as heat into the environment.
SHEPD say a new power station will be needed even if plans for the 457MW Viking Energy wind farm go ahead, as the wind farm will not be able to meet Shetland’s energy needs for 30 per cent of the year.
The NINES project would involve a range of measures to reduce demand on the power station and increase the capacity for small scale renewable production in the isles.
Plans include building the UK’s largest battery to store 1MW of power, installing a 4MW electrical boiler and 130MW/hour thermal water store fuelled by a 6.9MW wind farm and introducing smart metering to up to 1,000 homes.
SHEPD have already raised almost £20 million towards the project and have proposed adding a one off charge of £20 to all Scottish Hydro Electric customer bills during 2012/13 to raise the extra £15 million.
While Ofgem like the concept of NINES, they believe SHEPD are being overoptimistic about how much power it will save and are not happy with the charging proposal, saying the cost should be spread over several years.
However they do believe it will ultimately save money and encourage more renewable generation in Shetland.
Last year it cost £29 million to run Lerwick power station, only one third of which is covered by the bills paid by Shetland consumers. The outstanding amount adds an extra £27 to every SHE customers electricity bill.
Lerwick power station currently supplies half of the demand for power in the isles, which fluctuates between 11 and 48MW. The rest is provided by the independently-owned 100MW generating station at Sullom Voe oil terminal.
Ofgem concluded the benefits to be derived through the NINES project are likely to exceed the cost and the failure to innovate could be expensive.
The consultation document can be found at http://www.ofgem.gov.uk/Networks/ElecDist/Policy/Documents1/SHEPD_NINES_CONSULTATION.pdf
Responses should be sent to Anna Rossington, Distribution Policy, 9 Millbank, London, SW1P 3GE; tel: 020 7901 7401; email anna.rossington@ofgem.gov.uk
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