The Scottish island of Orkney has initiated the first phase of the ReFlex Orkney project, which will create a Virtual Energy System (VES) turning Orkney into a “smart energy island.” The project will cost £28.5m, half of which will come from United Kingdom Research and Innovation (UKRI) through the industrial challenge fund.

The consortium which is developing the project is led by the European Marine Energy Centre (EMEC) and also includes Solo Energy, Heriot-Watt University and Orkney Islands Council. The VES will look to link together electricity, transport and heat networks into one system, in order to reduce the use of fossil fuels.

As part of the project the consortium will deploy 100 large-scale batteries and 500 domestic batteries, 600 new electric vehicles with 200 vehicle-to-grid chargers and 100 flexible heating systems. Solo Energy will use its FlexiGrid software platform to charge during peak generation and release energy when demand is at its peak.

UK energy minister Claire Perry said: “What we are seeing here on Orkney is a test bed for the energy system of the future. These smart systems are a key part of our modern Industrial Strategy and will provide cheaper, greener and more flexible access to energy for everyone. What we learn from these innovations could one day be rolled out across the UK and exported around the world and we’ll be able to say it was ‘Made in Orkney’.”

EMEC managing director Neil Kermode added: “We’re delighted that UKRI have funded this project. This new model will demonstrate how we can better interact with, own and manage our integrated energy systems locally, both at individual and community level.

“50% of the project is being funded privately indicating the appetite that exists within the partners to make this project work. Orkney has already demonstrated high commitment for local sustainable energy solutions and the county is well on its way to decarbonising each aspect of the energy system.

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“The target for Orkney is to have a negative carbon footprint and this pioneering project will build upon the existing local energy system, local infrastructure and local expertise, to accelerate this transition to a fully sustainable and flexible energy system.”

Orkney was chosen because of its already high use of micro-generation, as 10% of homes on the island create their own electricity compared to the UK average of 2.8%.