Farmers and landowners looking to future-proof are turning their attention towards renewable energy, but in this fast-changing landscape, where are the opportunities?
Farmers and landowners considering diversifying into renewable energy may have assumed opportunities for large-scale solar were a thing of the past.
The UK Government scrapped the Feed-in Tariff and Renewable Obligation Schemes in 2015 which caused a lull in installations, but since then global costs for solar technology have fallen. This, paired with an increased wholesale cost of power, has finally made subsidy-free solar a viable option.
Hugh Taylor, of independent power and energy consultancy Roadnight Taylor, explains developer-operators of large-scale standalone solar farms now believe favourable Corporate Power Purchase Agreements, alongside lower build costs, mean some schemes could be built as soon as 2019.
Mr Taylor says: “We have seen ground rent offers for more than £150,000/year on new solar schemes, but ground rent rates will vary depending on many factors, not least of which are planning prospects, topography and grid connection costs.”
Leases are generally for 25- plus years, but moving quickly is imperative.
Mr Taylor adds: “Landowners should act fast. Any grid capacity remaining locally will only be sufficient for one scheme. If you do not secure that capacity for your site, someone else will for theirs.”
Although the greatest appetite is for large-scale solar, gas gensets generate electricity from the gas grid and can be viable on far smaller grid connections at lower voltages. These schemes are housed in shipping containers and from a planning perspective are more discreet, typically being tucked away on less than 0.4 hectares (one acre).
Ground rents for well-marketed gas genset sites have been up to £150,000/year for up to 0.8ha (two acres).
Mr Taylor says: “This assumes the right developers are being approached effectively, safely and in a competitive environment.”
There has been a lot of excitement around the battery storage market.
However, landowners are advised to exercise caution at the present time.
Mr Taylor says: “There is currently a lull in storage developer appetite, due to oversupply of sites and various market factors.
“Battery storage is not suitable for all parts of the electrical grid and other technologies may offer landowners better prospects.”
Roadnight Taylor says the resurgence of the solar market leaves landowners at risk of sharp practice from developers favouring other sites on the local grid, and from unscrupulous advisers, some of whom have been charging farmers upwards of £1,000 for submitting contrived grid applications for the wrong technology, at unviable capacities and on inappropriate parts of the network.
Mr Taylor says: “Anyone wishing to secure solar rents this time around should learn from the mistakes of thousands of others between 2010 and 2015.
“Grid rights should be secured from the network operator independently of any developer.
“A grid adviser should have the expertise to liaise with the network operator and be willing to submit any grid application on a success-fee basis.
“Our framework puts your land agent in the strongest position to negotiate the best terms from competing developers.
“If your agent introduces just one developer, ask yourself why. In whose best interests are they acting.”
To determine if you have a genuine opportunity to secure power scheme rents, Roadnight Taylor is offering Farmers Guardian readers its Stop/GoTM feasibility study from £250 plus VAT (a saving of £100). If your site does have tangible potential, Roadnight Taylor can work on a no-win-no-fee basis to submit and manage a bespoke grid connection application for the right technology and scale. If it does secure you a viable grid offer, Roadnight Taylor then ensures you get the strongest deals by putting your site out to competition among the best-performing power scheme developers. This offer expires on Friday, November 30, 2018.