Statkraft Moves Forward with Scatsta Hydrogen Project After Securing Lease
Statkraft, Europe’s largest generator of renewable energy, has confirmed it will proceed with plans to develop a green hydrogen and ammonia production facility at Scatsta, following the signing of a lease agreement with Shetland Islands Council (SIC).
The proposed development, formally titled Shetland Hydrogen Project 2, will be located on land next to the disused Scatsta Airport. It will involve the construction of an electrolytic hydrogen-to-green ammonia facility with a capacity of up to 400 megawatts (MW).
SIC will receive £1.13 million in annual rent from Statkraft for the lease. In addition, the council will benefit from a fixed community payment of £5,000 per megawatt of installed capacity, an estimated £2 million per year at current project size. The council said these funds will be managed locally and used to secure further investment in strategic initiatives.
Speaking to Shetland News, Statkraft’s principal hydrogen project manager Stuart Marley described the agreement as “an exciting milestone for the potential to develop green hydrogen and ammonia production in Shetland.”
“This scheme offers an opportunity to combine Shetland’s renewable resources with innovative technology,” he said. “The historic links with energy production mean there is a wealth of talent in the region to draw on to ensure projects are run safely and efficiently.”
Council leader Emma Macdonald, also speaking to Shetland News, said the project aligns with the recently adopted Fair Share for Shetland principles, aimed at ensuring the community benefits from renewable energy developments.
The project is expected to create local jobs in operations and maintenance and may also generate further income through shipping activity at Sullom Voe harbour. Construction is expected to begin in 2028 or 2029, with grid connection anticipated by 2032.
Despite Statkraft recently halting new green hydrogen projects globally, it said mature developments like Scatsta will continue to be advanced before seeking future investors.
A separate hydrogen initiative is also being considered for the nearby Sullom Voe Terminal under EnQuest’s plans to shift the site away from fossil fuels.
Source: shetnews.co.uk
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