The University of Strathclyde’s Centre for Energy Policy is conducting a study to assess the impact of local green hydrogen production on the Shetland economy.
This research will explore how Shetland’s substantial renewable wind power, supply chain, and infrastructure could contribute to the island’s transition to a low-carbon future. Energy companies are eyeing Shetland for green hydrogen production facilities, particularly at the Sullom Voe Terminal (SVT).
SVT, historically a cornerstone of Shetland’s oil and gas industry, is set to be repurposed into a green energy hub. The transition from fossil fuels to green hydrogen is expected to support the island’s decarbonization efforts. SVT operator EnQuest has ambitious plans to produce one million tonnes of hydrogen annually from the terminal. However, this target raises questions about the feasibility and competitiveness of hydrogen production at SVT compared to other European facilities.
Current data indicates that SVT employs around 170 full-time equivalent workers, supporting an additional 320 jobs through supply chain linkages and employee spending. Transitioning to green hydrogen production could either preserve these jobs or necessitate new skill sets and job roles, potentially leading to workforce displacement if not managed effectively.
Statkraft, alongside partners, is targeting Scatsta Airport for green hydrogen production. The company is also exploring another hydrogen project near Lerwick. While these initiatives represent substantial investments in Shetland’s renewable infrastructure, their long-term economic impact remains uncertain. The integration of these projects with existing infrastructure and their ability to attract further investment will be crucial in determining their success.
A recent final investment decision for the Aberdeen hydrogen hub project by BP and the city’s council highlights a comparable initiative. This project includes hydrogen production, storage, and distribution facilities, with an initial phase set to produce up to 300 tonnes of green hydrogen annually. By comparison, the Aberdeen project aims to fuel 25 buses daily, showcasing a clear, tangible output and usage strategy. This sets a benchmark for Shetland’s projects, which must demonstrate similar clarity and feasibility.
Offshore Wind and Renewable Integration
Shetland’s potential 2.3GW of offshore wind power could be pivotal for green hydrogen production. However, the timeline for offshore wind development is lengthy, with onshore wind farms likely to provide initial electricity for hydrogen production. The effective integration of these renewable sources is vital. Comparing this to other regions with established offshore wind projects could provide insights into best practices and potential pitfalls.
Professor Turner emphasized the importance of community involvement in Shetland’s evolving energy landscape. Engaging with local stakeholders, including the Shetland Islands Council, industry developers, and policymakers, is crucial for a successful transition. The study’s next steps include engaging with the public to understand their perspectives and ensure that the net zero transition benefits the community.
Collaboration with the Scottish Government and other organizations aims to develop a long-term initiative to investigate and communicate how the net zero transition may affect Shetland’s prosperity. Establishing clear policies and frameworks will be essential in guiding the region through this transition and ensuring that economic benefits are maximized while mitigating potential risks.
