12th February 2026
For decades, the far north of Scotland has lived with a familiar story. Industries rise, industries fall, and communities are left to absorb the shock.
From the decline of Dounreay to the slow erosion of public‑sector jobs, Caithness and Orkney have carried more than their share of uncertainty. But today, a very different story is taking shape - one built not on decline, but on possibility.
Across Orkney, Caithness, and the wider Highlands, a cluster of major energy and infrastructure projects is converging. A new 220 MW subsea cable, a state‑of‑the‑art substation at Finstown, a major new hubstation development in Caithness, and a large workers' village planned for Thurso are together creating the most significant economic opportunity the region has seen in a generation.
This is not just an engineering programme. It is the beginning of a new energy frontier in the north.
]b]Orkney: From Constrained Innovator to Energy Exporter[/b]
Orkney has always punched above its weight in renewable energy. The islands generate more electricity per person than almost anywhere in Europe, and they have led the world in wave and tidal innovation. Yet for years, Orkney has been held back by a simple bottleneck: the grid could not carry the power the islands were capable of producing.
The new Finstown substation and the 220 MW subsea link to Caithness finally break that constraint.
What this means for Orkney
New wind, tidal, and marine projects can finally proceed
Community energy schemes gain a viable export route
Hydrogen production and storage become realistic at scale
Local contractors and engineers see long‑term work, not short bursts
For the first time, Orkney's renewable potential is matched by the infrastructure needed to deliver it. The islands move from being a testbed to being a strategic supplier of clean energy to the British mainland.
This is a turning point — not just for the energy sector, but for the confidence of the islands themselves.
Caithness: A Region Re‑Emerging as an Energy Hub
On the mainland, the subsea cable comes ashore at Dounreay, a site whose identity has long been tied to the rise and fall of the nuclear industry. But today, Caithness is no longer defined by what it once was. It is being reshaped by what it is becoming.
A major new hubstation development
SSEN Transmission's plans for a large new hubstation in Caithness. This is one of the biggest grid‑infrastructure investments ever made in the region — signal a profound shift. Caithness is becoming a central node in Scotland's renewable energy backbone.
This hubstation will:
handle vast volumes of renewable power from Orkney, Shetland, and the north Highlands
support future offshore wind connections
anchor long‑term engineering, maintenance, and operational jobs
attract supply‑chain businesses to the area
This is the kind of infrastructure that creates decades of work, not months.
A workers' village in Thurso
To support the scale of construction, a large workers’ village is planned for Thurso. This is not a temporary camp — it is a sign of the scale and duration of the investment coming to the area.
It means:
hundreds of workers living locally
increased demand for shops, cafes, trades, and services
new opportunities for hospitality and accommodation providers
a boost to Thurso’s town centre and local economy
For a community that has watched population decline and young people leave, this is a rare and welcome reversal.
Dounreay: A New Chapter After Nuclear
Dounreay has been the economic anchor of Caithness for more than half a century. As decommissioning progresses, the question has always been: what comes next?
The answer is now emerging.
The combination of:
the Orkney subsea link
the Caithness hubstation
the workers’ village
and the wider north‑Highland transmission upgrades
creates a new energy identity for the region — one rooted in renewables, engineering, and long‑term infrastructure.
This is not a replacement for Dounreay, but it is the strongest foundation yet for a post‑nuclear future.
The Highlands: Becoming the Backbone of Scotland’s Energy System
The Highlands have always exported energy — first peat, then hydro, then nuclear, and now wind. But the scale of today’s investment marks a shift in status.
The region is no longer peripheral. It is becoming central to Scotland’s energy security and the UK’s net‑zero ambitions.
What this means for the wider Highlands
more high‑skilled jobs
more apprenticeships and training opportunities
more local supply‑chain contracts
more long‑term population stability
more confidence in the region’s economic future
This is the kind of structural investment that rural Scotland has been waiting for.
A Positive Future Taking Shape
For too long, the far north has been asked to absorb loss — loss of jobs, loss of services, loss of population. But today, the story is different.
The new Orkney substation.
The 220 MW subsea link.
The Caithness hubstation.
The workers’ village in Thurso.
Together, they form a once‑in‑a‑generation opportunity to reshape the economic landscape of Orkney and Caithness.
This is not a promise of transformation someday.
It is transformation already underway.
And for the first time in a long time, the future of the far north looks not just sustainable but bright.
More information
The Workers Village
A temporary worker village designed for up to 500 energy project workers is proposed for Pennyland Farm in Thurso. Developed by J Murphy & Sons to support SSEN power line projects, the site will feature one or two-story modular buildings, an amenity block (kitchen, restaurant, gym), and parking. It is one of several similar sites planned across the Highlands to manage a major housing influx.
Key Aspects of the Proposal:
Location: Pennyland Farm, on the north-western edge of Thurso.
Capacity: Accommodation for approximately 500 staff.
Facilities: Modular units, laundry, medical rooms, and recreational space.
Duration: The development is designed to support long-term, ongoing electricity infrastructure projects.
Development Potential: The site has been noted as a potential future location for permanent housing, with developers Tulloch Homes previously interested in the area.
The project is designed to address the need for accommodation for workers involved in the SSEN Spittal-Beauly power line projects.
The substation Near Halkirk
SSEN Transmission has received planning consent from The Highland Council (granted in late November 2025) for a major new 400kV substation and High Voltage Direct Current (HVDC) converter station near Halkirk, known as the Banniskirk Hub. This project is part of a £22bn+ investment to upgrade the electricity transmission network in the north of Scotland and is crucial for connecting renewable energy to the national grid.
Project Details:
Location: The hub is located on land approximately 360m northeast of Achalone Cottage, near Halkirk, in the Spittal area.
Components: The project includes a 400kV Air Insulated Switchgear (AIS) substation, an HVDC converter station, control buildings, synchronous condensers, and associated landscaping.
Capacity & Connections: It will connect to the proposed 400kV overhead line between Spittal and Beauly, the existing Spittal 275kV Substation, and the Spittal-Peterhead subsea cable link.
Footprint & Construction: The site, described as potentially covering an area equivalent to 140 football pitches (approx. 89.4 hectares), involves extensive groundworks, including rock blasting and the removal of approximately 0.48 km² of trees.
Timeline: Construction is expected to begin early in 2026.
Principal Contractor: Murphy has been appointed as the principal contractor.
Impacts and Community Concern:
Concerns: The project has faced significant local opposition, with over 250 objections citing the "unprecedented degree of industrialisation" in the rural landscape, noise, traffic, light pollution, and damage to local peatland and archaeological sites.
Mitigation & Benefits: SSEN has committed to landscaping and planting for screening and provides over £1 million in community benefit funding. The project is expected to create jobs, with a new office in Thurso supporting 50+ roles.
Construction Operations: The project may involve 24-hour working during specific phases.
The Banniskirk Hub is a cornerstone for future renewable developments in the region, designed to help meet UK and Scottish Government net-zero targets.
The substation at Finstown, Orkney
The Finstown Substation is a major new facility near Finstown, Orkney, being constructed by Siemens Energy and BAM Joint Venture (JV) as part of a £900m+ project. It is central to the Orkney-Caithness 220kV HVAC subsea link, designed to connect up to 220MW of Orkney’s renewable energy to the national grid by 2028.
Key details of the Finstown Substation development:
Purpose: The substation will connect local renewable generators to the grid and transform voltage to 220kV for transmission to the Scottish mainland.
Location & Construction: Situated near Finstown, construction involves substantial earthworks, drainage, and erection of steel structures. BT Bell notes progress on a Gas Insulated Switchgear (GIS) building and transformer foundations.
Components: The project includes multiple equipment halls and control buildings, with TGA Consulting Engineers designing services to withstand the harsh marine environment.
Infrastructure Links: It connects to 14km of underground cable leading to the landfall at Warebeth, which links via 53km of subsea cable to a corresponding new substation at Dounreay.
Timeline: Ground was broken in late 2024, with full energization of the project anticipated in 2028.
The project is a key component of SSEN Transmission's "Pathway to 2030" investment, strengthening the transmission network in Northern Scotland.