Statkraft seals land deal for its hydrogen project in Shetland

Norwegian renewable energy supplier Statkraft has secured a lease from the Shetland Islands Council to develop its Shetland Hydrogen Project 2, moving the plan into its next phase.

As informed, the proposed scheme is an electrolytic hydrogen to green ammonia production facility of up to 400 MW, on land adjacent to the disused Scatsta Airport, which is near the existing Sullom Voe Oil Terminal and Shetland Gas Plant.

Stakraft revealed that the green ammonia produced will be used by a wide range of industries, including as a sustainable fuel for marine shipping and to decarbonize fertilizer production.

“The construction of schemes like Shetland Hydrogen Project 2 will allow excess renewable power that cannot be utilised by the grid to be transformed into hydrogen,” the company said.

To note, Statkraft has three wind farms on Shetland in pre-construction, Mossy Hill near Lerwick, and Energy Isles and Beaw Field on Yell.

Stuart Marley, Statkraft’s Principal Hydrogen Project Manager, stated: “This is 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.”

“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. While we are currently in the early stages of development, we will work closely with local stakeholders and the wider Shetland community, as we progress this project.”

It is important to note that earlier in 2025, Statkraft decided to halt the development of new green hydrogen projects. At the time, the company said it would not prioritize new developments but would continue to advance parts of the existing portfolio in preparation for potential investment. However, even then, it emphasized its belief in the long-term future of green hydrogen, stating that market activities related to this energy source would continue to be part of its portfolio.

Shortly after, the company exchanged an option agreement with Clydeport, part of the UK’s Peel Ports Group, to explore the potential development of a green hydrogen facility at Clydeport’s Hunterston Port and Resource Campus (PARC) site in Scotland.