Gas-fired power station proposed as ‘low cost, island-friendly’ alternative to Viking wind farm and interconnector 

A gas-fired power station in Lerwick has been proposed by two international energy specialists as an “island-friendly” alternative to the Viking Energy wind farm and an interconnector.

Denmark-based power station specialist BWSC and Scandinavian LNG (liquefied natural gas) company Gasnor, a Shell subsidiary, are behind the proposal.

They have raised their proposal in response to Ofgem’s latest consultation on the proposed 600MW transmission link between Shetland and Caithness, which the energy regulator is minded to approve if Viking Energy goes ahead.

They say that the “roughly 50MW” gas fired heat and power station in Lerwick – which would utilise LNG imported into the isles – would cost a “small fraction” of Viking and the proposed cable.

LNG is liquid formed when natural gas is cooled to minus 162 degrees Celsius, with the process shrinking the volume of gas enough to make it easier to store and transport.

It can be turned back into gas in special plants before being burned for heat or to generate electricity.

The industry says it is more environmentally friendly than oil and diesel, but it still has a carbon footprint.

The team behind the new proposal say that “LNG will bring additional high value permanent jobs to the port of Lerwick while bunkering the fast-growing fleet of LNG-fuelled vessels in the North Sea”.

“There will be absolutely no environmental damage to Shetland’s landscape, peat and wildlife on the Shetland mainland,” consultant Hugh Sharman and BWSC’s Poul Kragh-Hansen wrote to Ofgem.

“The widespread availability and use of gas from LNG on the islands will break the monopoly held by liquid petroleum fuels for transport and heating in island businesses and dwellings while reducing costs, pollution and CO2 emissions.

“The costly subsidies by UK consumers that are required to keep Shetland Islands’ power competitive with the UK mainland will be much reduced.”

They claim the plant would cost less than 10 per cent of the proposed transmission link, which is currently priced at £632 million.

The developers also say that there could be cost and CO2 emission reductions if NorthLink’s ferries were “re-powered and/or replaced by ships fuelled by LNG”.

They also believe that LNG could “address fuel poverty and CO2 emissions from Shetland” by “breaking the monopoly of diesel and fuel oil” in the isles.

Kragh-Hansen told Shetland News that a similar proposal was previously raised in around five years ago but it was not able to progress. Discussions with Shetland Gas Plant operator Total also never came to anything.

The oil-fired 67MW Lerwick Power Station is due to close before 2026 and BWSC and Gasnor believe they can deliver an LNG terminal and power plant by 2024.

Sharman said that since 2016 he has tried to inform SSE – which is ultimately behind Lerwick Power Station and the proposed interconnector, as well as Viking Energy – of the proposals.

“But at every turn, this team has refused any serious discussion with myself nor with the industrial partners who were and are now backing my proposal,” he wrote to Ofgem.

“As a consequence, there seems a growing risk that SSEN, another subsidiary of SSE, possibly motivated by the substantial prize of a regulated income from the cable, is behaving as if no other technical solution is feasible.”

He also said that in “making LNG and therefore gas available on Shetland, far greater CO2 emission reduction can be achieved by bringing LNG to Shetland than purely by generating all Shetland’s electricity from wind power”.

“In any case, our solution takes account of the increasing quantity of wind power that already is generating roughly 40 GWh per year from smaller scale wind turbines,” Sharman said.

BWSC is said to have a “reference list” of over 175 medium-sized power stations in 54 countries, while Gasnor owns 22 LNG terminals.

SSE previously mooted a new power station at Rova Head in Lerwick which could have run on natural gas, but the project never came to fruition.

In 2017 Ofgem also rejected a proposal to serve Shetland’s energy needs through a 60MW subsea cable from the Scottish mainland which would only be able to import power.

Ofgem’s approval of the proposed transmission link, meanwhile, is subject to receiving sufficient evidence by the end of 2020 that the 457MW Viking Energy project is likely to go ahead.

Chief executive of Ofgem Jonathan Brearley said last week that its “announcement will help stimulate economic growth as the economy recovers from Covid-19, as well as unlocking Shetland’s potential to supply low cost renewable electricity for consumers across Great Britain”.