Shetland's strategic location made the islands a crucial player in the North Sea oil and gas industry since the 1970s, but peat from blanket bogs was used as fuel as long as the islands have been inhabited. As we transition to a clean energy future, Shetland's energy industry is adapting so it continues to play a key role in UK energy generation.

Blanket bog is almost ubiquitous in Shetland and has provided fuel, in the form of peat, since the earliest human occupation. Peat is particularly concentrated on the island of Yell, which led to it being proposed as a location for a peat-burning power station in the 1970s.

Eastern parts of Unst and Fetlar are the only districts where peat is virtually absent, due to the mineral composition of underlying rocks preventing the growth of its main constituent, Sphagnum mosses. For crofters in these areas, their rights to cut peat for fuel were in locations distant to their homes – sometimes even on other islands. This entailed long journeys by pony or boat to bring home the essential fuel.

Offshore oil and gas

Exploration during the early 1970s discovered oil and gas to the east and west of Shetland. Shetland’s proximity to these oil and gas fields made it the obvious choice for an onshore terminal and by 1978 Europe's largest oil terminal had been built at Sullom Voe. Since then it has received oil and gas piped and shipped from the fields in the Northern North Sea for onward shipment by tanker.

Deeper water exploration discovered further gas reserves west of Shetland, prompting the construction of the huge Shetland Gas Plant. This facility, near the Sullom Voe Terminal, took its first gas in 2016, with the gas pumped from under the sea to the shore for processing.

North Sea oil and gas rapidly became one of Shetland’s main industries, including the Sullom Voe Terminal and associated support facilities, offshore activities and the developing decommissioning enterprises based in the isles.

Shetland's naturally deep harbours and proximity to offshore infrastructure make the islands an ideal choice for decommissioning projects. These harbours also allow Shetland to serve the expanding renwable energy industry including onshore and offshore wind, tidal power, and green hydrogen generation. The ambitious ORION project proposes using clean energy to electrify oil and gas platforms, and to produce green hydrogen at scale, for export around the world, from a repurposed Sullom Voe Terminal.