Consultation on the cost of the new energy solution for Shetland Consultation Contact: Grant McEachran Publication date: 19 July 2017 Team: RIIO-ED Response deadline: 30 August 2017 Tel: 0141 331 6034 Email:
[email protected] Overview: Shetland’s electricity supply is largely generated from Lerwick Power Station, which is approaching the end of its operational life. In April 2014, we directed Scottish and Southern Electricity Networks (SSEN) to run a competitive process to identify the most efficient solution for Shetland’s energy future. SSEN has recently announced that a joint bid by NG Shetland Link Ltd (NGSLL)–Aggreko was their preferred bidder. This consultation sets out details of the successful bid. It seeks your views on our assessment of the proposed costs of the solution. We are consulting separately on the licensing arrangements to operate the solution. Ofgem/Ofgem E-Serve 9 Millbank, London SW1P 3GE www.ofgem.gov.uk Consultation on the cost of the new energy solution for Shetland Context Shetland is not currently connected to the electricity network that serves mainland Great Britain (GB). This means that the islands have to be able to meet all of their own electricity needs. Currently the main source of electricity generation that can respond to customer demand is Lerwick Power Station, which was built in 1953 and is nearing the end of its operational life. Our principal objective under the Electricity Act 1989 is to protect the interests of existing and future consumers. In doing so we need to ensure both that: the people of Shetland continue to have a reliable energy supply after Lerwick Power Station reaches the end of its life; and the costs of the energy supply solution for Shetland are efficient.