Clouds and silver linings: alternative energy opportunities

Catherine Strickland, Associate Solicitor, comments:

The maturing renewable energy market faces further uncertainty following the recently-announced Government proposals to close, or significantly limit, the two main subsidies which have supported on-farm solar and wind projects.

These changing times could provide new opportunities for some landowners. There is a growing need to balance the increasing percentage of electricity supplied by renewable energy plants and the reduced reliance on more flexible fossil fuel power stations. New techniques are being employed to better match the demand for electricity with the intermittent supply from renewable sources. 

Short Term Operating Reserve (STOR) may not be a familiar phrase, but the need for these back-up diesel generators to meet peaks in electricity demand appears to be growing.

There is little 'green' about these generators and the use of diesel fuel present risks which need to be managed. But if you have land close to existing electricity lines or substations, a STOR site could provide a low maintenance income stream. Landowners in suitable locations could be offered thousands of pounds a year in exchange for renting out their land, or from owning their own STOR site. While standalone sites need to be large enough to produce 3MW of power, smaller sites can be grouped together to meet National Grid requirements. In some cases, all that is needed is space for a couple of shipping container-sized installations. 

Battery storage is tipped to be the next significant growth area in the renewables market.  New advances in technology could help balance out the peaks and troughs of renewable energy generation. Batteries could also help developers maximise the limited availability of connections to an electricity grid infrastructure which is being stretched to maximum capacity by the boom in renewable energy projects. With funding from Ofgem, as well as private investment, projects are being trialled on a commercial scale, and companies such as Tesla are racing to market batteries to be installed in the home. Land close to grid connections or existing renewable energy projects could be in demand as the sites of new battery plants.

As with renewable energy projects, location will be key, and the best-placed landowners will be those with existing solar farms or those close to neighbouring renewable energy developments or existing substations. Any landowner who is approached should take specialist professional advice to ensure they not only maximise the value of their land, but have appropriate bespoke legal agreements in place, and manage any impact on their personal tax position.

For further information, contact Catherine Strickland or Iain Mason.

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