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A New Energy Solution for Shetland

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A New Energy Solution for Shetland Shetland Consultation A New Energy Solution for Shetland Stakeholder Feedback October 2014 – February 2015 Introduction 01 Scottish Hydro Electric Power Distribution (SHEPD) is responsible 02 Who we heard from for delivering electricity to customers in Shetland. As a Distribution 03 Involving Customers Network Operator we own and operate the network right across 04 Our Programme of Listening the north of Scotland – serving some of the UK’s most remote 05 Key Themes communities. Shetland is unique because its network is not electrically connected to the grid that operates across Great Britain Feedback Summary and the other island groups. We balance generation output with 06 Shetland Consultation: A New Energy Solution for Shetland demand on Shetland’s network, which is outwith the normal role of 17 Keeping the Lights on in Shetland a Distribution Network Operator, but ensures the system is able to provide a stable and secure supply of electricity to our customers. 19 Next Steps Currently, the main sources of electricity In 2010 Ofgem asked us to identify a generation which can respond to new energy solution for Shetland. We Feedback in Full customer demand on Shetland, are submitted proposals for a new power 21 – 115 Shetland Consultation: Lerwick Power Station and Sullom station to Ofgem in July 2013. A New Energy Solution for Shetland Voe Terminal Power Station. Lerwick 116 – 134 Keeping the Lights on in Shetland Power Station is nearing the end of its However, the cost of the solution we operational life and the availability of proposed was higher than Ofgem 135 – 137 Energy Roadshow Events Sullom Voe Terminal Power Station is expected. Consequently, Ofgem asked us 138 – 142 Roundtable and Meetings uncertain from 2017. There is a need to to consult on and then run a competitive 143 – 145 Supply Chain Event identify and deliver new arrangements tender process for a new energy solution. 146 – 148 Smart Grid and Supply Chain Event to meet customers’ electricity needs and The purpose of the consultation was to keep supply and demand in balance at raise awareness, promote discussion and all times. gather views about: – the islands’ energy needs, and – how these needs should be met in the future in an efficient and cost-effective way. Ofgem’s determination on SSEPD proposal for a new power station: www.ofgem.gov.uk/ofgem-publications/87381/ofgemdeterminationofshepdsubmissionundercrc18a.pdf Stakeholder Feedback Shetland Consultation: October 2014 – February 2015 A New Energy Solution for Shetland Who we heard from Back to contents page 02 During the consultation events in These included domestic, public sector Shetland, Glasgow and London, SHEPD and commercial customers on Shetland Our Respondents was encouraged by the high level of and also included organisations with engagement from stakeholders, and this an interest in the future energy system resulted in a very high response to the in Shetland and interests in mainland consultation. Great Britain – including companies who may take part in the competitive process There were 302 responses from currently planned for 2015, and other stakeholders during this consultation: electricity licensees who may have views 194 written responses; and 108 on the proposed market and regulatory participants at roundtable meetings or framework, competitive process and 53.6% 46.4% drop-in events. requirements. Domestic Others Customer Others made up of (shown as percentage of total respondents): Four public drop in energy roadshows in Shetland (58) Roundtable meetings with relevant large demand and generation customers, public and voluntary sector Keeping the Lights on in organisations on Shetland (15) 3.6% 6.6% 5.6% Shetland: Your chance to have your say on the 302 Supply Chain Event Business/Trade Business Innovation future of your electricity Glasgow (17) Organisation Customer Community supply (140) Smart Grid and Supply Chain Event London (18) Shetland Consultation: A New Energy Solution for Shetland (54) 17.5% 12.9% percentage figures Potential Bidder to Other rounded up/down to Provide Services one decimal place Stakeholder Feedback Shetland Consultation: October 2014 – February 2015 A New Energy Solution for Shetland Involving customers and stakeholders in the development Back to contents page 03 of the New Energy Solution for Shetland Our Stakeholder Engagement Strategy 1 2 3 4 5 Understanding Actively Engaging Informing Listening and Being the Relationship Responding Accessible We have categorised We offer a range of ways to engage with We will produce and We will publish key We are our stakeholders us: interviewer administered surveys; regularly update themes arising from committed based on our existing written consultation documents; audio our stakeholder our stakeholder to being open relationships with recorded focus groups with electronic engagement and consultation and easy to them, and their audience response system; on-line surveys; communication plan processes and our talk to. interest in helping us structured interviews with stakeholders; which will provide response to them so shape our plans. stakeholder meetings, events, fora and stakeholders with that our stakeholders workshops; and customer voice groups. enough information, know what action in a format they we will be taking to With our stakeholders in mind, we will want, to enable them improve our internal continually monitor and evaluate our to participate in key processes, and how mechanisms of engagement to ensure they debates. their views have sustain constructive engagement. informed our plans. Our Stakeholder Engagement Policy We place stakeholders at the heart of our business – both in terms of informing them and obtaining feedback from them. It creates the conditions for sharing information as well as capturing, recording, analysing, and applying the feedback from a representative range of stakeholders on an equitable, accessible and sustainable basis. Stakeholder Feedback Shetland Consultation: October 2014 – February 2015 A New Energy Solution for Shetland Our Programme of Listening Back to contents page 04 This timeline shows Our Programme of Listening. For each stage of the consultation it details how many stakeholders’ views Shetland Consultation: A New Energy Solution for Shetland • Feedback used to inform the new energy solution for Shetland, the competitive process; we heard and how these views are being Oct – Dec 14 and the market arrangements applied to inform our views on the new • 54 respondents energy solution for Shetland and the competitive tender process. Keeping the Lights on in Shetland: Your chance to have your say on the future of your Please click on the titles opposite Oct – Dec 14 electricity supply to read the full detailed feedback • Feedback used to inform the new energy solution for Shetland • 140 respondents Four public drop in energy road show events on Shetland Nov 14 • Feedback used to inform the new energy solution for Shetland • 58 attendees Roundtable and meetings aimed at large generation and demand customers on Shetland; relevant trade, public and voluntary sector organisations Nov 14 • Feedback used to inform the new energy solution for Shetland, the competitive process, and the market arrangements • 15 delegates Supply chain event (Glasgow) Nov 14 • Feedback used to inform the new energy solution for Shetland, the competitive process, and the market arrangements • 17 delegates Smart grid and supply chain event (London) Jan 15 • Feedback used to inform the new energy solution for Shetland, the competitive process, and the market arrangements • 18 delegates Stakeholder Feedback Shetland Consultation: October 2014 – February 2015 A New Energy Solution for Shetland Key themes emerging from the consultation process Back to contents page 05 Procurement and Scope of service Services to be procured process required Service contract Future market and balancing Keeping the Lights durations arrangements on Shetland on in Shetland Stakeholder Feedback Shetland Consultation: October 2014 – February 2015 A New Energy Solution for Shetland What stakeholders said in response to the Shetland Back to contents page 06 Consultation – A New Energy Solution for Shetland Shetland Consultation Integrated plan A New Energy Solution for Shetland 82% • Feedback used to inform the new energy agreed with the range of options detailed in the integrated plan. At events bidders frequently asked: solution for Shetland, the competitive process, • for a more detailed explanation of the reason that the integrated plan was rejected and the market arrangements • what if the new energy solution is more expensive? In consultation responses respondents highlighted: • likely issues with feasibility of nuclear or coal-fired power stations within the timescales • 54 respondents • demand side management and energy storage should have been more explicitly stated as an option Options which some respondents indicated should have been included were: • wind with storage, hydrogen and/or electrolysis should have been considered • wave and tidal should have been included as an option Categories of the respondents SHEPD response We are working with Ofgem to explore other solutions that the market has Other (16.7) Business/Trade Organisation (11.1) to offer through a competitive tender process, in order to determine the lowest cost and most efficient solution which delivers a safe secure supply of Business Customer (9.3) electricity. The structure of the competitive process is intended to be flexible enough to accommodate a
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