SHEAP Prepares for Transition as Lerwick Power Station Shifts to Standby

Shetland Heat Energy and Power (SHEAP) is adapting its operations in anticipation of a significant shift in energy sourcing. The nearby Lerwick Power Station, which currently contributes between three and five percent of SHEAP’s annual energy needs through excess heat, is set to enter standby mode in 2026. This change is contingent upon the local grid’s connection to the Viking wind farm and a subsea high-voltage direct current (HVDC) cable.

With the transition, SHEAP is also developing a 68 MW battery park in Lerwick. This facility will ensure a reliable power supply during outages, addressing potential gaps in electricity delivery. According to SHEAP’s managing director, Derek Leask, the additional heat from Lerwick Power Station has been a valuable resource, especially during winter months and when the Gremista energy recovery plant (ERP) undergoes maintenance.

Upgrades and Future Plans

Currently, Lerwick Power Station supplies approximately 1 MW of energy to SHEAP’s district heating system. Leask mentioned the company’s plans to implement network upgrades aimed at enhancing the efficiency of heat usage from the ERP. “We are changing some areas of town to lower-temperature loops, which reduces the overall heat needed. It’s not a huge investment, but it makes a difference,” he stated.

Despite the shift to standby mode, Lerwick Power Station will still operate annually during grid maintenance. Leask emphasized the importance of timing these operations with ERP shutdowns to maximize the use of waste heat. Looking ahead, SHEAP is actively engaging with renewable energy companies to explore potential infrastructure projects in Lerwick. “The hope is that in time these projects will provide additional streams of waste heat for the network, making it stronger and more sustainable,” Leask added.

Regulatory Engagement and Future Framework

Today, SHEAP is hosting a visit from the regulatory team of Ofgem, which is part of their effort to prepare for new UK-wide regulations governing heat networks. This visit aims to provide Ofgem with a first-hand understanding of SHEAP’s operations, the benefits of district heating for the local community, and the anticipated impacts of upcoming regulations on both customers and operators.

The new regulatory framework, expected to be implemented in 2025 under the Energy Act 2023, will for the first time bring heat networks under Ofgem’s oversight. This change will introduce enhanced consumer protections, fair pricing standards, and improved service obligations, marking a significant shift in the governance of heat networks in the UK.

As SHEAP navigates these changes, its commitment to sustainability and efficient energy use remains at the forefront of its mission. The company’s proactive steps to enhance its infrastructure and engage with regulatory bodies signal a forward-thinking approach to the evolving energy landscape in Shetland.