How Shetland's energy sector is transforming

With the 103-turbine Viking Energy wind farm already generating energy from the islands’ wind, attention is turning to future energy projects on land and in the waters around Shetland. The islands’ location, combined with decades of energy industry experience and a collaborative approach, means there’s a readiness to step up and deliver the new energy revolution.

Among the potential projects are more turbines, hydrogen production, offshore wind farms, battery storage, new district heating systems and an entire 630-hectare energy park.

Shetland has been at the heart of large-scale energy developments since the 1970s, when the Sullom Voe oil terminal was constructed and opened, bringing thousands of workers to the isles, and beginning the industry’s long connection with the islands.

While Shetland was at the forefront of the oil and gas boom five decades ago, it is now perfectly placed to become the epicentre of the transition to clean energy.

With the isles set to play such a major part in the UK’s move to renewables in the years and decades to come, it’s no surprise that the energy industry has been keeping a keen eye on the isles. And the local industry, supply chain and local authorities are working together to ensure Shetland plays its part in the clean energy future, and the community benefits from the expected boom in renewables projects.

Nowhere has the collaborative approach been on show more than at the All-Energy expo in Glasgow in May, a two-day event focusing on the UK’s leading renewable and low-energy organisations and their suppliers.

No fewer than 10 developers, local organisations and suppliers from Shetland attended the event as they set out their stall for the future of net zero and how Shetland will be at the forefront of the energy transition.

Among those in attendance were Shetland Islands Council, offshore wind farm developers Arven, Neshion – the group behind plans for a North Mainland energy park near Sullom Voe oil terminal – and local logistics firm Peterson.

While these organisations and companies may be working on different projects, some of which may even be competing in time, their appearance at All-Energy represented them taking a united front, and showing the desire to work together to ensure Shetland can capitalise on the energy opportunities that are going to come its way in the coming weeks, months and years.

Norwegian energy company Statkraft is one such company developing plans in the isles.

It is currently planning to build an eight-turbine wind farm on the outskirts of the capital, Lerwick, with hopes to connect it to the existing mainland power network through a 132kV substation.

The company’s principal wind project manager, John Thouless, was one of those in attendance at All-Energy, and said it was “always an essential date” in his calendar.

“It was an excellent opportunity to network, connect, and learn more about current issues facing the renewable energy sector and to build networks with suppliers, customers, partners, and policymakers,” he said.

“There was a real buzz at the Shetland stand, about the continued ambition for Shetland to be part of the renewables revolution, and the huge benefits that schemes like ours can bring.”

A presentation on the event’s first day explained how Shetland projects can help harness ocean renewable energy, and what these huge energy developments will mean for the isles’ economy.

One of the companies with a serious interest in the North Sea is Arven, which has consent for two sites around 30km to the east of Shetland.

They predict that their development could be “one of the UK’s largest floating wind sites”, with the total capacity of the wind farm reaching 2.3GW.

Its stakeholder manager Aaron Priest said they were proud to be one of those representing Shetland at the All-Energy conference, which welcomed a record 13,000 attendees this year.

“The event offered a fantastic opportunity to showcase Shetland’s unique position in the clean energy transition,” he said.

“Shetland has long played a pivotal role in supporting the UK’s energy industry and security and now stands well-placed to benefit from major investments in jobs, skills and infrastructure as we shift to a low-carbon economy.

“Connecting with other energy companies and suppliers was hugely valuable as we move forward, reinforcing collaboration and innovation across the sector.”

Arven are not the only company with big plans for waters to the east of Shetland. Irish energy firm ESB is looking to build a 500MW wind farm around 40 miles to the east of the small island of Skerries.

Named Stoura, the project could see 28 turbines built to harness Shetland’s richest resource, wind.

Thanks to its ideal position, expertise and willingness to work together, Shetland has made itself an attractive place for any energy developer looking to build projects that will help the UK meet its desire to reach net zero by 2050.

And these companies – whether they come from Norway, Ireland or further afield – know they are in safe hands when it comes to delivering their projects in the isles, thanks to the well-established and proven success stories from the Shetland supply chain.

Lerwick Port Authority has stamped its mark as a world-leading name in not only decommissioning projects, but in ensuring that materials for large scale developments – like the Viking Energy Wind Farm – make it to their destination safely.

Every single turbine component and blade arrived at Lerwick’s Greenhead Base, owned and operated by the port authority, on their way to the Viking site.

There, they were passed to locally-based company Peterson Energy Logistics, which was awarded the contract to ensure safe delivery of the 103 turbines.

Peterson already had a proven track record of supporting large scale projects in Shetland, but the Viking project saw it tasked with delivering more than 1,000 components to the North and Central Mainland in Lerwick.

They did just that to have the Viking site up and running on schedule in August 2024, and they are now eager to lend their expertise to the next big development.

Over the decades, Lerwick Port Authority has also carved out a stellar reputation in handling the oil and gas sector and decommissioning of old infrastructure. The port’s deep-water harbour took delivery of the Ninian Northern topside for decommissioning in 2020, with 14,200 tonnes of materials recovered in its biggest decommissioning project to date.

And with the authority progressing plans for an ultra-deep-water quay in Lerwick, its ability to undertake and complete these projects is only set to be enhanced.

All of this adds up to show why Shetland is in the perfect position to become a world leader in the transition to renewable energy.

A prime location at the edge of the North Sea and Atlantic shelf with world-class facilities at Lerwick Harbour for materials to be delivered, and with local suppliers boasting proven track records of ensuring these major projects go off without a hitch despite Shetland’s at times testing climate.

It's no wonder there was such a buzz at the Shetland stand in Glasgow. Shetland is set to be at the centre of the move towards net zero, bringing many opportunities for fresh investment in the islands.

Shetland's diverse and dynamic economy offers many opportunities for investors. Discover more about the islands' thriving business sectors.