Energy ISSUE 15 | WINTER 2017-18
MATTERS
• Balancing the grid with battery storage • Moray wind farm’s pricing milestone • Power‑line projects in the spotlight • Heating a historic Highland cottage • New telecoms code favours operators
Bigger blades bring bigger challenges
WELCOME
Wind power is back in business WELCOME to another edition of Energy Matters. We have recently seen two offshore wind projects being awarded Contract for Difference (CfD) contracts at a strike price of £57.50 per megawatthour. This is an astounding price reduction from the £150 per megawatt-hour figures in 2014 and has put renewables back in the frame as a potentially viable alternative energy source across the wider sector. Galbraith has been working closely with Moray Offshore Windfarm (East) Ltd, which won one of the CfD contracts, and we look at the next stage in this exciting development. We also report on the developing battery storage market and changes to the Electronic Communications Code among other topics. The drive towards electric vehicles means there will be increasing demand for electricity and a significant infrastructure challenge to make sure this is readily available where needed. There may be an initial reluctance to switch from petrol and diesel driven vehicles, particularly among those in more remote locations, those covering long distances or those with vehicles working long hours, such as in the agricultural sector. Government support to both encourage and incentivise this transition would be beneficial, but whether there is the ability to introduce any meaningful measures before the outcome of the Brexit negotiations remains to be seen. Hopefully the CfD success in the offshore wind sector will soon be replicated across all the renewable energies. The challenge shouldn’t just be to match the cost of other forms of power generation but to be more competitive to help drive down energy costs for all. Mike Reid Head of the Galbraith energy and utility teams
CONTENTS
4
How Galbraith helped two major power-line projects succeed.
6
Wind-farm updates: A price breakthrough in the Moray Firth, and the pressing need for a better grid.
8
Why ground-source heating suits a historic cottage. The database route to accountability.
10
COVER STORY As turbine blades get bigger, ingenious transport solutions must be found.
12
Scotland’s highspeed broadband expands apace.
13
The good and notso-good of EPCs.
14
The latest Galbraith graduates.
15
Hydro business rates update.
16 Summer fun: The show season recalled.
17 GALBRAITH is Scotland’s leading independent property consultancy. Drawing on a century of experience in land and property management, the firm is progressive and dynamic, employing 236 people in offices throughout Scotland. The firm provides a full range of property consulting services across the commercial, residential, rural and energy sectors.
New Telecoms Code favours operators.
18
The benefits of GIS.
19 Current subsidies.
Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances. Follow us on Twitter: @Galbraith_Group @Galbraith_ENRGY Like us on Facebook: www.facebook.com/ GalbraithPropertyConsultancy/ See us on Instagram: www.instagram.com/GalbraithGroup/ Join us on LinkedIn: www.linkedin.com/company/galbraith
Energy Matters is produced by Allerton Communications, London, and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
Page 2 | Energy Matters Winter 2017-18 | galbraithgroup.com
Battery storage is increasingly important to the electricity supply network and the rewards for landowners are potentially large. Anneka Fraser reports. AS THE UK’s fossil fuel dependence shifts towards renewable energy, the National Grid is charged with ensuring that variable – and often intermittent – electricity generation meets consumer demand. This is known as balancing the network. Active Network Management (ANM) is the term coined to encompass the range of solutions used to balance the network, boost capacity and optimise the existing infrastructure. One solution is Enhanced Frequency Response (EFR). To date, the grid network has met consumer demand by paying generators to provide a frequency response service to either increase or decrease power output. This Firm Frequency Response (FFR) is rather slow with reaction times up to 30 seconds. EFR, however has a sub-second response time allowing National Grid greater control in periods of frequency deviation. By maintaining an average (grid) system frequency of 50hz (+/- 1) future stakeholder savings are estimated to be in the region of £200 million. In 2016 under EFR the National Grid procured 200MW of additional capacity. Developers were invited to tender for four-year contracts of between 1MW and 50MW of grid capacity for various electricity storage technologies. The majority of tenders were secured by battery storage developers at an average of £9/MWh. This reflects the growing importance of batteries in ensuring reliable power supply across the grid. Storage technologies have advanced hugely in recent years, driven by demand for greater mobility – electric cars, airliners and mobile phones – and
Battery storage: the future for a balanced power grid Battery storage sites are approximately 1-2 acres in size, are situated either next to substations or co-located next to renewable energy projects and crucially are in areas where the grid is constrained. The batteries soak up electricity generated in periods of excess and retain that energy until such time as demanded by the grid network.
better static storage to match power generation with the needs of end users. The sums involved are large. In August, The Renewables Infrastructure Group (TRIG) agreed to buy a 20MW battery storage project at Broxburn, West Lothian, from the renewable energy company RES in a £20m investment. TRIG was attracted by a bespoke, bilateral four-year deal with National Grid and associated availability payments. “The use of battery storage is becoming increasingly important in enabling grid networks to match fluctuations in the supply and demand of electricity and to stabilise power frequency,” said TRIG chairman Helen Mahy. “This becomes especially vital as the installed base of renewables generation increases.” It is expected that future auctions will be offering bigger contracts with no cap on capacity which, together with the National Infrastructure Commission recognising the need for storage and the cost of batteries falling, signals a bright future – provided developers can secure appropriate sites.
The battery technology is still in its relative infancy and batteries can only store 1-2 hours’ worth of electricity. Currently the Grid only calls upon the stored energy for brief periods but as more renewable energy projects come online the electricity generated will be less reliable by its very nature and as a result the Grid will be more reliant on battery storage to balance the network. This is welcome news for landowners with suitable sites, and developers seeking a route to market. But anyone considering the sale or lease of property for electricity storage use should examine closely the economic drivers and seek expert advice on revenue potential and valuation. As ever we are actively working to link developers and landowners to these desirable sites. We are undertaking site referencing, preparing feasibility studies, negotiating site leases, preparing planning applications, and negotiating heads of terms. It’s a fast-moving sector and our clients won’t be left behind.
anneka.fraser@galbraithgroup.com 0131 240 2280
“
The use of battery storage is becoming increasingly important in enabling grid networks to match fluctuations in the supply and demand of electricity and to stabilise power frequency.
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 3
Community involvement is key in Nick Morgan reports on Galbraith’s role in keeping the lights on in the West of Scotland and, below, Michael Forrest describes recent works on the East Coast Transmission Line.
SCOTTISH and Southern Electricity Networks (SSEN) has certain obligations under the terms of its licence, and one is to ensure that its customers’ electricity supply is maintained to an appropriate standard. Storms can be a challenge for network operators, especially when the resulting outages mean they must identify faults and recover the affected electricity supplies in difficult conditions. Providing a supply on the west coast, an area not densely inhabited and relatively distant from concentrations of population, requires fairly lengthy networks of overhead electricity line, which need regular maintenance especially with pressures like weather and more notably the woodpecker causing headaches to the tune of £200,000. It’s not difficult to see why SSEN works hard to improve resilience on its network.
GALBRAITH has been closely involved in a project to modernise a major electricity transmission network, ensuring the continued safe supply of power to 400,000 homes and businesses up and down the east coast of Scotland. The firm was instructed by Scottish and Southern Electricity Networks (SSEN), the network owner, to liaise with landowners along the 275kV East Coast Main Line before work began on replacing earth wire along the route. The existing earth wire, currently providing analogue signals, is being replaced between Kintore and Blairingone as part of BT’s switch from an analogue to a digital telecommunications system, requiring SSEN to make the switch to digital. The 100-mile replacement provides a communication link between
In order to maximise uninterrupted service, the utilities team at Galbraith is working alongside the Scottish Hydro Electric Power Distribution project team in charge of refurbishing 33km of 11kV wood pole network by Lochinver. This forms part of a phased operation of improvements to the pole network and together we have already been involved with projects over stretches between Garve, Grudie Bridge and Ullapool. Some of this work includes digging in earth tracks, spark gaps, replacement of poles and renewal of their fittings. The earthing apparatus is important as this helps to regulate the network during lightning storms. All these tasks require access to the land, and to achieve that, engagement with the local landowners and community is key. It’s the role of the wayleave officer to make
substations for the protection and control of the supply across the network. Some sections of line needed to be replaced due to their condition. Increasingly, SSEN is using advanced technology to address the need for increased operating efficiency on the electrical overhead network and to meet the operating conditions placed on the company as part of its licence obligations by the regulator, Ofgem. The SSEN transmission network is being refurbished primarily to ensure the ongoing, safe operation of the electrical network. To enable this, SSEN is installing fibre-optic cables as part of the overhead line infrastructure. These carry monitoring information critical to the safe and timely operation of the electrical network, ensuring continuity of supply to customers. To minimise disruption to landowners
Page 4 | Energy Matters Winter 2017-18 | galbraithgroup.com
in a project stretching from spring to autumn, it was necessary to address three main issues – wayleaves (consent to carry out work on private land), access and compensation. Sometimes pole-mounted distribution lines needed to be changed from overhead to underground. Galbraith facilitated the necessary wayleaves in work that included displaying potential routes electronically on site, and providing accurate plans using our in-house geographic information system (GIS) capabilities. For each tower on the entire line, Galbraith contacted the landowner and visited sites using the latest mobile technology, displaying and digitally mapping potential access routes to meet the requirements of both client and the landowner ‘live’ in the field. The work was more complex at ‘pulling
grid projects contact directly with landowners, crofters, third parties and their agents to discuss with them the key aspects of the proposals, including start dates, and to resolve any issues during and after the works. The project team has also organised public engagement events to provide residents with the opportunity to join the discussion. Identifying all those involved is a task in itself, but time spent building positive relationships with the parties before work begins is time well spent. Should any material changes to the network be required, then the wayleave officer, together with the environment team, looks to secure the appropriate consents. The project team also has a great number of variables to consider when planning this type of refurbishment. Tourist traffic, accommodation, project timescales,
availability of refurbishment staff, costs, weather, environment and archaeology are just some examples of what must be considered. It makes sense to programme the work outside peak tourism or shooting seasons and to phase tasks to minimise impact on users of a network of narrow roads. But operating close to the bleak winter months puts pressure on both the refurbishment engineers and the land.
Woodpecker damage is a common problem.
A lot of time and money is invested in the electrical infrastructure, but time spent with all the people involved with the project shows that it is they who really light up the west coast of Scotland. nick.morgan@galbraithgroup.com 01738 456 063
points’ – every 10 to 15 towers – where the new earth wire was raised and drawn through to replace the old, and at public crossings, where scaffold was put up to keep roads open. Following completion, we revisited landowners to ensure all works were carried out in an acceptable manner and where landowners faced any disruption or loss they were duly compensated. Compensation claims are further refined using our in-house GIS by analysing affected areas to obtain accurate geospatial measurements and provide clear evidence of these areas on detailed plans.
michael.forrest@galbraithgroup.com 01738 456097
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 5
Offshore wind: Price-drop milestone Generators have passed an important landmark in producing electricity from Scotland’s biggest offshore wind farm, says Richard Higgins. ON September 11 Moray Offshore Windfarm (East) Limited announced it had won a 15-year Contract for Difference (CfD) for the delivery of 950 MW of offshore wind generation at £57.50 per MWh.
actively engaging with landowners along the route to negotiate agreements for the installation of underground cables. This has been a wide-ranging exercise, with dozens of different owners along a 34-km route.
The contract was awarded by the UK’s Department for Business, Energy and Industrial Strategy (BEIS) following its latest CfD auction. The outcome of the auction demonstrates real progress in cost reduction to the UK offshore wind market.
EDPR’s commitment to the UK offshore wind market through Electricity Market Reform and the transition to CfD auctions has enabled a dramatic cost reduction from £150/MWh in 2014 to £57.50/MWh today.
CfDs, introduced to encourage investment in renewable energy technologies without burdening consumers with excessive prices, are contracts between low-carbon electricity generators and the Government. The generator is paid the difference between the ‘strike price’, reflecting the cost of investing in a low-carbon technology, and the ‘reference price’, an average market price for electricity. CfDs provide generators with some revenue certainty and stability by reducing their exposure to volatile wholesale prices. Moray Offshore Windfarm (East) Limited is a joint venture company owned by EDP Renováveis (EDPR) and ENGIE, and Galbraith has been working closely with Moray East over a number of years on the onshore aspects of the project, supporting the developer throughout the planning phase and
New prices across various renewable technologies are – on average – a staggering 47% lower than they were just over two and half years ago. According to figures from BEIS, the offshore wind prices announced (which are guaranteed for 15 years of an expected project life of 15 years) are cheaper than the cost of the 35-year contracts for new nuclear power of £92.50 per megawatt hour, and cheaper than the levelised cost of gas. Offshore wind should now be seen as a key player in the UK’s demand for lowcarbon generating infrastructure to maintain security of supply against an increasingly uncertain future and at the same time bringing economic growth to the country on an industrial scale. Dan Finch, managing director of Moray Offshore Renewables, said: “Moray East’s success in this auction will enable us to bring a high-quality, high-value offshore wind project to the UK, and I would like to thank
Page 6 | Energy Matters Winter 2017-18 | galbraithgroup.com
all of the organisations, individuals and communities with an interest in the Moray Firth with whom we have worked to reach this vital milestone. “Moray East also brings major economic opportunities to our supply chain. Innovation and co-operation have enabled the cost reduction which ensured success in this auction. Electricity from Moray East will be produced at the lowest cost of any offshore wind farm around the UK, with exceptional benefits to consumers.” Not only does the auction set the price for power generated, it also sets the timeframe for project delivery. In order to meet the contractual obligations of the CfD process, Moray East must supply electricity to the grid by a given date, so the connection to the grid will have to be installed and operational. Galbraith will continue to be heavily involved in the project and are now looking forward to helping to deliver the grid connection from the landfall site at Inverboyndie beach to the substation site at New Deer along the 34km consented planning corridor. Dealing with large data sets and the complexities of the project has led to the development of innovative in-house GIS and database systems, which enable clarity of reporting and diligence in delivery to the client. The project is currently in the development phase where it is continuing to procure all of its partners and suppliers for the different stages of construction and operation. It will then move towards the construction phase. Commercial operation is expected to begin in 2022. The windfarm is expected to produce enough electricity to power 950,000 UK homes.
richard.higgins@galbraithgroup.com 01786 434 625
Onshore wind: A better grid is vital Wind power can thrive without subsidy, but first the network needs physical and organisational changes. Anneka Fraser reports. THE focus of this year’s Scottish Renewables Onshore Wind Conference, which Galbraith attended, was the Scottish Government’s Draft Energy Strategy. Of special interest were its possible implications for onshore wind in Scotland, routes to market in light of the changing subsidy landscape, any effect the overhaul of the planning system may have on onshore wind, and the new targets for community and locally owned projects. The most eagerly awaited discussion surrounded routes to market. Can onshore wind projects be delivered without subsidy? Ultimately the answer was ‘yes’, but developers need to be canny and require the support of the Government, the planning system and the grid network.
“
Firstly the grid network needs to be improved. There are capacity, system security and flexibility issues, and it is clear changes need to be made to the way the network is operated. There was also a call for onshore wind to be a provider of flexibility services, thereby contributing to balancing the grid network and not congesting it. For some time developers have complained about the lack of copper in the ground when actually the problem has centred around operation of the grid system. Currently a constrained network can often translate into eye-watering, project-killing, grid connection costs but if the network is managed more efficiently then in theory, we should see grid capacity increase and grid connection fees decrease.
There are capacity, system security and flexibility issues, and it is clear changes need to be made to the way the network is operated.
Cost savings can also be made by using local
supply chains. This can deliver large sums of money into the local community and it also makes that community feel part of the project. RES estimated that Freasdail Wind Farm delivered £6.34m into the local community in Argyll. It was also suggested that corporate power purchase agreements be used more often. This is where a business rather than an electricity company buys the power for its own consumption. These agreements can be complex. They require a commitment from the corporate to take all of the energy produced by the renewable project and also rely on an agreement with an electricity company to provide the infrastructure to take the electricity from A to B. This could, however, provide developers with additional routes to market and breathe life back into some mothballed projects. These aligning factors, combined with the bigger and cheaper machines now available, offer scope for developers to build out without subsidy. This is hugely encouraging and the market is beginning to emerge from what was a very uncertain position. The Scottish Government has set the ambitious but achievable target of providing 50% of the total energy demand from renewable sources by 2030 and recently it has been felt that there is a disconnect between this
target and what is actually achievable on the ground. When the Conservative Government announced an end to onshore wind subsidies there was disbelief and fear that projects could never be delivered but it seems the market has adapted and we are continuing to show commitment and leadership on climate change.
anneka.fraser@galbraithgroup.com 0131 240 2280
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 7
A valuable record of accountability We all prefer to avoid disagreement, but when both sides dig in, it’s time to go back to the records. Nick Morgan looks at the latest record-keeping trends. IN SEEKING to bring agreement between potentially conflicting parties, our task is simple – get people to say ‘yes’. We’re often asked to arrange access to private land to enable utilities such as power companies and Scottish Water to maintain their equipment. We also help to negotiate access on behalf of private clients in their dealings with utilities. When one side puts forward a proposal, possible responses range from “certainly” via “maybe” to “over my dead body”. Occasionally, negotiations turn sour, and we as agents must show we did all we reasonably could to secure an agreement. This is not only to show our client the value we have added to the project, but also in case the client wishes to pursue a legal route. How do we do this? Spreadsheets? Boring! Tables? So 2008. Databases are back! In truth they have never been away. In expanding our IT expertise, we have developed our own bespoke database management systems, using Django web framework and PostgreSQL storage. By entering all correspondence into our utilities management system, we can quickly recall evidence of the reasonable steps that we have taken during negotiations. In the unfortunate event that a negotiation reaches deadlock, evidence in the database can easily be provided during legal proceedings. As well as advancing our clients’ objectives, this greatly increases our own accountability.
Ground‑source heating Ancient buildings and renewable energy technology can make for a great renovation project, says Calum Innes.
The database is designed to be simple and effective. First a new job instruction is set up within the database, so that all contact information for interested parties affected can be allocated against this project. All correspondence with these individuals including summaries of telephone conversations and meetings or copies of letters or emails can be recorded and tagged against their own unique entry. A search facility allows data to be filtered before then being exported in various formats. The database provides quick and easy means to keep track of our dealings and has already proved a valuable tool for reference, leaving behind the more clunky spreadsheets in its wake. nick.morgan@galbraithgroup.com 01738 456 063
Page 8 | Energy Matters Winter 2017-18 | galbraithgroup.com
WE’VE reported previously on using renewable heat technology in the restoration of a fragile listed building. The cottage in question, Downie’s Cottage at Braemar in the Cairngorms National Park, is Category A listed because it has remained unaltered since it was built and retains rare features such as a timber hingin lum (hearth canopy), box beds and heather thatch. A ground source heat pump was chosen to provide constant low-level heating to preserve the fabric of the building by maintaining a relatively dry environment – as the traditional construction allows moisture through the building’s envelope. Ground source heating is a long-established technology, popular in Europe and Scandinavia, but take-up in the UK has been limited. This is partly because installation costs are much
The rare wooden hearth canopy, or hingin lum, in the Braemar cottage was in a sorry state (left) but has been restored to its former glory (far left). The thermal image shows the effectiveness of the groundsource heating system. Image: Alba Building Sciences Ltd
brings comfort to a historic cottage higher than other renewable heat technologies such as biomass, while some poorly engineered installations led to a bad press. But this renewable technology deserves greater popularity due to its ability to capture latent solar energy. In this project, which we have been following in Energy Matters (issues 6 and 10) the results are hugely positive. The heat pump has achieved a co-efficient of performance (COP) of approximately 4, which means that for every kilowatt of electrical energy used to operate the heat pump 4 kilowatts of heat energy are delivered to the property. The constant provision of heat via an underfloor heating network maintains a cosy atmosphere in a property that is occupied only occasionally and ensures that the fabric of the building is protected against the negative effects of penetrating damp.
The cottage as it is today (far left), and as it was in the mid‑19th century (left).
While other methods have suffered considerable degression in tariff levels, ground source heat pump technology continues to be eligible for attractive support from the Government’s renewable heat incentive. This is because of the low take-up, which is unfortunate, since this is an effective means of delivering renewable heat. The technology would also benefit from better knowledge among suppliers and installers, whose efforts, after all, greatly influence end users’ experience. In summary, this project shows it is possible and advantageous to embed renewable technology in buildings of high historical merit, provided owners follow well considered professional advice.
“
Ground source heating deserves greater popularity due to its ability to capture latent solar energy.
calum.innes@galbraithgroup.com 01738 456075
Calum Innes and his wife Jackie have been shortlisted as finalists in the Sustainable Development category of the Scottish Green Energy Awards 2017 for their restoration of Downie’s Cottage, Braemar.
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 9
Bigger turbines... bigger problems As renewable energy becomes more popular, turbine blades grow in size, creating transport problems. Harry Lukas reports. GOVERNMENT policy on renewable energy has meant that generators and developers need to ensure future viability of new wind turbines, both on and offshore. Financial returns are calculated on energy output and technology is advancing, with 3-5 MW turbines increasingly onshore and 5-10 MW equipment offshore.
“
There are some ingenious albeit expensive solutions for transporting large turbine blades on restricted roads.
These larger-output turbines tend to require bigger structures, with the increase in the size of the blades presenting the greatest problems relating to accessibility on delivery to sites from factories or ports. Most current onshore turbines have blade lengths between 20 and 50m, however turbine manufacturers are now offering machines to developers with much higher output, featuring blades
Page 10 | Energy Matters Winter 2017-18 | galbraithgroup.com
between 50 and up to 88m, which is the largest blade manufactured to date. These new components create problems with delivery as they travel on roads designed for more traditional cargo. However, there are some ingenious albeit expensive solutions for transporting them on restricted roads. One is a specialist truck which will raise a blade up to 45 degrees to negotiate constraints. Another solution – more expensive but proven – are sectional blades which can be constructed on site, allowing considerable transport savings and flexibility. Blade technology is advancing, with earlier blades being fabricated from Fibreglass and epoxy resin and more recently with extensive use of carbon fibre, reducing weight and increasing strength. However it is the sheer size of the blades which means that there will be a much larger number of pinch points, and roadside land which parts of the blade may require to oversail – movement over someone else’s property – during delivery. These issues will arise both with proposed new sites under construction and where sites are to be repowered with more productive machines. Existing agreements may need to be
revisited as the areas affected may be increased considerably. The trade group Renewables UK has said there are about 924 turbines operating in the UK that were running before 2004 and the expected lifespan of a turbine is expected to be in the region of 20 to 25 years. Thus there will be a number of good, windy sites currently considering possible replacement and re-powering their machines. Energy companies will have to re-survey the chosen routes for delivery and will have to ask landowners to alter current agreements as well as negotiating new agreements where necessary. Galbraith has a dedicated renewables team that can advise on land issues where affected by construction and turbine delivery.
harry.lukas@galbraithgroup.com 01896 754842
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 11
Spreading the benefits of fibre broadband access
Programme puts more fibre in the digital diet Thanks to the Digital Scotland Superfast Broadband programme and commercial coverage, just over 90% of Scotland has access to fibre broadband. That figure is set to rise to 95% by the end of December 2017.
High-speed broadband is opening up Scotland to new opportunities. Bill Robertson reports on how Galbraith is helping large areas to get connected.
The Digital Scotland Superfast Broadband (DSSB) programme is worth more than £400 million and has already enabled more than 780,000 homes and businesses across the country to be connected to high-speed fibre broadband at speeds of up to 80Mbps.
AN increasingly vital part of any plan to promote productivity and general quality of life is ensuring adequate access to fast broadband. Whether it’s for employment, remote working, education or general health and welfare, good connections are essential, especially in areas away from cities.
The project’s funding partners include the Scottish Government, BT, the UK Government through Broadband Delivery UK (BDUK), local authorities and the European Regional Development Fund.
The Westminster Government has charged BT with the expansion of broadband access to 95% of the population by December 2017. During a presentation by SSE Networks to potential independent connection providers – firms authorised to build electricity networks – the Galbraith energy team was approached by a company charged with securing consents for the connecting of BT broadband cabinets – digital junction boxes – throughout Scotland. The company explained it had limited direct experience and needed help to deliver the governmental targets. The Galbraith team provided a demonstration of its knowledge and ability to secure the connections by offering a “try-before-you-buy” service, obtaining landowner consents for two BT Superfast cabinets free of charge. As a trusted contractor to SSE Networks, the Galbraith team has since worked in partnership with both SSE Networks and the delivery contractor to secure energised cabinets, thereby contributing to the expansion of superfast broadband throughout the country. Through the team’s involvement, the number of connections to BT cabinets has increased. However, the targets for connection dates in these locations have been revised following representations by the Scottish Government, in recognition of the particular terrain and distances involved in carrying out this work in the Scottish Highlands and Islands.
BT is investing £126 million in the rollout, and the total project value includes around £18 million which is being reinvested back in to the programme as a result of stronger than expected early take-up. A mole plough laying broadband fibre cables. Top: Technicians install a broadband fibre terminal box.
connection provider in this innovative and ambitious programme of works has begun to bear fruit. The Galbraith staff involved have been invited to participate in providing the service outwith the SSE Networks area and indeed in other areas of work. The provision of multi-utility solutions to residential developments is being considered as a logical extension to the service provided to the client and is a testament to the success of the team.
The energy team’s success in advising, counselling and mentoring the independent
Page 12 | Energy Matters Winter 2017-18 | galbraithgroup.com
bill.robertson@galbraithgroup.com 01738 456 074
Sara Budge, director of the programme said: “Thanks to the DSSB programme, more and more areas across Scotland now have access to fibre broadband, with tens of thousands of people benefitting from fibre. “The programme is now reaching more rural areas and by the nature of this requires the use of private wayleaves.” To find out whether you can access the service, visit http://www. scotlandsuperfast.com/ where-when/
Better energy standards – at a price EPCs were meant to change the rented property market for the better. How have they worked out so far? Richard Haggart reports. AN EPC – Energy Performance Certificate – is a document which states the energy efficiency of a building based on the standardised way the building is used and provides the building’s owner with a number of ways in which it could be improved. Since their introduction in 2009 it has been widely assumed that at some point they would be used either to tax less efficient homes or to drive increases in standards. In June, the Scottish Government invited consultation responses on energy efficiency and condition standards in private rented housing which proposed, among other things, that all let properties, including agricultural tenancy and holiday lets, would have to meet minimum EPC band standards as follows: • Minimum band E for all new lettings from April 1, 2019 • Minimum band E for all existing lettings covered by the repairing standard with effect from March 31, 2022 • Minimum band D for all new lettings from April 1, 2022, and • Minimum band D for all existing lettings covered by the repairing standard with effect from March 31, 2025 Any improvements in energy efficiency or condition standards of private rented housing
stock should be encouraged, but it’s useful to look at some of the issues which may arise particularly in the private rural rental sector: 1. T he software which creates the EPC does not accurately reflect the energy performance of older houses of traditional construction; 2. T he banding is based on a limited inspection, and results vary depending on visual inspection and assumptions; 3. S ome recommendations such as cavity wall insulation, the erection of a wind turbine or connection to mains services are impractical in traditional buildings; 4. G iven the number of properties likely to require improvement, the timescale for implementation may lead landlords to cut corners or, worse, sell stock out of the rental market, potentially leading to inflated demand and higher rents as a result of under supply; 5. This represents another area of building regulation that will require money from the public purse to police. Galbraith highlighted these points, and others, in our response to the consultation. It remains to be seen what the outcome will be; one way or another it is likely that housing energy efficiency will remain on the political agenda.
“
Some recommendations such as cavity wall insulation, the erection of a wind turbine or connection to mains services are impractical in traditional buildings.
richard.haggart@galbraithgroup.com 01738 448 143
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 13
Through the Galbraith graduate programme we offer opportunities across our offices to the best and brightest new graduates. A progressive and broad-based firm, we offer comprehensive on-the-job training and full support in attaining RICS qualifications. We are delighted to have the following graduates on board as our 2017 intake. Philippa Orr Philippa joined the Galbraith Cupar office in September, where she has been assisting Mike Reid, Alan Hendry and Rachel Myles in the rural and energy team while undertaking her Assessment of Professional Competence (APC). Philippa comes from a livestock and arable farm in Fife, and before starting with Galbraith has helped her family with day-to-day farming duties. Away from farming, Philippa completed an undergraduate degree in geography and latterly a Masters in Land Economy at the University of Aberdeen. She is currently assisting with land referencing, compensation claims, preentry records of condition and general liaison for a number of utility schemes.
Claire Wilson
A warm welcome to the latest Galbraith graduates
Following a move to the new premises last year, the expanding Castle Douglas office welcomed Claire who joined the rural and energy teams in September. Having grown up on a dairy and arable farm north of Glasgow, Claire has practical farming experience, which, coupled with her Masters in Land Economy from the University of Aberdeen, has set her in good stead for undertaking her APC. Away from work, Claire has been heavily involved in her local Young Farmers Club and in her spare time, she enjoys horse riding and hill walking. Claire has been assisting David Corrie, Poppy Baggot and Alice Wilson with a range of estate management, utilities, sales and valuation work.
Sam Dillon Sam joined the Aberdeen office in August having undertaken work experience through the Galbraith work experience scheme in 2015 and 2016. A country sports enthusiast, Sam was
involved with the Royal Agricultural College Beagles throughout university and he also enjoys fly fishing and shooting. With his varied role within the Galbraith Aberdeen office and his previous experience on both arable and livestock farms, Sam is working towards completing his APC. Sam is helping Tom Stewart and Deirdre Stewart with a range of rural professional work including land management, farm sales and valuations.
Alex Davies Alex joined the Inverness office in September having gained an undergraduate degree in Agriculture Business Management and most recently a Masters in Rural Land and Business Mangement at the University of Reading.
Page 14 | Energy Matters Winter 2017-18 | galbraithgroup.com
She is working towards her APC and CAAV qualifications and is getting practical experience in land management, valuation and professional work assisting Dougal Lindsay, Claire Acheson and Philippa Cliff. Alex’s family has a long history of horsemanship, and so she has a keen interest in horse riding.
We are delighted to welcome Philippa, Claire, Alex and Sam to Galbraith at this exciting stage in their careers and look forward to helping them through the APC process over the coming years. For more information on the Galbraith graduate recruitment and work experience programmes visit www.galbraithgroup.com/recruitment.
Hydro: Making progress on the business rates issue Calum Innes looks at progress towards finding a more equitable business rate regime.
New recruits, clockwise from far left: Phillipa Orr, Sam Dillon, Claire Wilson and Alex Davies.
WE HAVE previously reported on the issues being faced by the hydro industry in relation to business rates. Following recognition of the punitive increases being faced by the industry following the 2017 rating revaluation, a transitional scheme of rates relief was introduced, restricting increases to 12.5% for the current financial year. I have been assisting the British Hydro Association and the Scottish group of hydro operators, known as Alba, in their deliberations with government aimed at finding a longer-term solution. We are pleased to report on positive results from this dialogue in that the Minister, Derek MacKay, announced his intention to progress with providing 60% relief, albeit the detail is yet to be determined. Ken Barclay, the former chairman of RBS, who was commissioned by the government to undertake a review of the Scottish rating system, recommended that the plant and machinery regulations be examined with regard to their application to renewables, and the government has confirmed that it is their intention to take up this recommendation. However, this is a longer-term measure so their willingness to act on our recommendation to provide relief in the interim is most welcome. We look forward to being involved in determining the detail of such provision and how it will apply to larger installations in excess of 1mW which currently fall outwith the transitional arrangements.
calum.innes@galbraithgroup.com 01738 456075
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 15
All the fun of the fairs Summer may seem a distant memory, but Toby Kirkwood recaptures some of the sunshine of a successful show season. 2017 has been a busy year for Galbraith at both the Royal Highland Show and the Game and Wildlife Conservation Trust Scottish Game Fair. Over the years, more and more people have been attending the fairs, and the numbers visiting the Galbraith marquees have continued to grow.
Galbraith chairman on two of the three days, and the newly branded Galbraith gilets which could be seen in numbers around the grounds.
The Royal Highland Show was a great success, with several valuable leads generated during the course of its four days. The Galbraith staff present continued to maintain the firm’s ethos of being welcoming, professional and willing to meet people to do business.
The tug of war team was put to the test but could not repeat last year’s success, despite triumphing over both the Bell Ingram and Savills teams. They were narrowly beaten by an all-male team of groundsmen, called in at the last minute following a withdrawal.
As sponsors of Edinburgh Rugby, we were lucky enough to have Scotland Internationals Alasdair Dickinson, Mark Bennett, Duncan Weir and Grant Gilchrist in attendance to show off their skills and compete with the public on the reactiontester board. There were a few contenders who could well find themselves drafted into the squad next season!
Mungo Ingleby from Galbraith’s sporting department won the salmon distance casting event with an impressive cast of 52 yards. He was also involved in the newly created Estates Challenge, involving teams of six engaging in clay shooting, fly casting, and dog handling. Six estates took part, and Scone won the trophy.
A total of 190,028 people attended this year’s event, up 1,218 compared to last year. The Game and Wildlife Conservation Trust Scottish Game Fair was also a great success. Despite the Thursday deluge, the show was dry for all three days, and the event organisers did a great job in managing the muddy conditions on the Friday and Saturday. Highlights on the Galbraith stand included the ‘guess the number of cartridges’ competition, which attracted more than 300 entrants, the forestry species display, which created much interest, the presence of the
Joining us at the shows this year were the Galbraith Bugs, who were popular with children of all ages. In all, it has been a great year at the shows. Galbraith owes the success of events like these to the enthusiasm of the staff who volunteer each day. We are already looking forward to next year.
Page 16 | Energy Matters Winter 2017-18 | galbraithgroup.com
toby.kirkwood@galbraithgroup.com 01786 434635
Telecoms: New code favours operators New rules to support the creation of a digital communications infrastructure and future technologies have big implications for landowners, says Mike Reid. THE Electronic Communications Code (ECC) governs agreements between site providers and operators for telecommunications apparatus such as masts and cables. It was introduced in 1984 and amended in 2003. The new 2017 ECC, likely to come into force this December, is aimed at putting in place a modern structure to support the rapid roll-out of digital communications infrastructure and future generations of technology. Site providers need to be aware of the provisions of the new ECC as these strengthen operators’ rights and change some provisions which have become common place in current agreements. The new ECC has changed significantly from the original proposals. Some of the main changes are:
Consideration/rent Top: Grant Gilchrist and Duncan Weir brought Rugby glamour to the Galbrath stand at the Royal Highland Show. Left: Galbraith Bugs. Below: The Galbraith tug of war team in action at the Scottish Game Fair.
Contrary to earlier versions of the ECC the consideration is still to be based on market value with reference to the terms of the agreement and based on four main assumptions: • The transaction does not relate to the provision or use of an electronic communications network. This excludes arguments that the rent should be based on the operator’s use of the apparatus such as the profitability of any sites. • Rights for the operator to assign the agreement or share and upgrade the apparatus are to be disregarded. • The rights in all other respects correspond to the Code rights. • It is to be assumed there is more than one suitable site available. This excludes any claims of ransom value. There are many factors that might be relevant to assessment of the consideration to be paid, including the type of land or property the apparatus is located on, any effect on the use and enjoyment of the land, the route and impact of any access or services associated with the apparatus and protection of lines of sight.
Upgrading and sharing apparatus Operators will have automatic rights to upgrade and share apparatus with third parties without requiring agreement from, or making payments to, site providers provided there is minimal adverse visual impact or additional burden created on the site provider.
Assignation Operators will be able to assign agreements freely without requiring the site providers’ consent. Site providers will no longer be able to negotiate improved terms for granting consent to any assignation. Site providers will now have no control over the future identity of their tenant, which will raise significant concerns in terms of complying with lease obligations particularly site restoration provisions.
Termination The new ECC extends the protection given to operators to retain their apparatus after any agreement has expired. Site providers will now require to give 18 months notice to terminate Code rights and the circumstances in which a notice to remove can be given are limited. Many site providers already have issues with trying to remove operators with Code rights and these increased powers may dissuade them from granting new agreements.
Contracting out and transitional arrangements The parties cannot contract out of the new ECC which must apply to all new agreements signed after it comes into effect. Whilst some aspects of the new ECC will apply to existing agreements, the transitional provisions exclude the reassignment of Code rights and the upgrading and sharing provisions until existing agreements come to an end. There will be a transition to the new ECC as existing agreements expire but for those agreements currently with an unconditional break clause, the move to the new ECC could be accelerated by the operators. However, whether they will have the appetite to implement this provision, which is contrary to the Government’s intention of not making the Code retrospective, remains to be seen but there will be a temptation where significant site sharing payments could be negated.
Summary The new ECC clearly strengthens the operators’ rights and will see site providers’ incomes fall, particularly those receiving large site sharing payments. However, the rental provisions don’t look as drastic as the original proposals and we may see no real change to base rents. It is important that site providers receive professional advice to help protect their interests in a changing regulatory environment.
mike.reid@galbraithgroup.com 01334 659984
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 17
The triple benefits of GIS Dan Campanile reports on an expanding service from Galbraith. THE use of geographic information systems – GIS – across many business streams and as an independent service in its own right has steadily developed within Galbraith in the past three years. Energy and utilities projects have seen particular benefit due to the scale and geographic nature of work in this sector and the need to examine and use multiple spatial datasets for projects. Galbraith puts GIS to use in three ways to benefit clients. The first is our inward-facing internet-based WebGIS, used as a reference tool for storage and enhancement of firm-wide relevant geospatial datasets – information about particular locations – and the extraction of project-specific data for further work. The second group is broadly ‘desktop GIS’ and includes GIS analysis, the creation of new project data, more complex visualisation, plan production and project management. The third category is GIS work undertaken in the field. This involves the capture of new geospatial data and the display of existing information for the purposes of enhanced client communication on mobile devices. Although clients are usually only exposed to some elements from these groups, directly or indirectly they benefit from all of them. Specific examples of the application of GIS for energy and utilities projects include: • The use of WebGIS at the early stages of a project to better understand ownership in the vicinity of a site, and to examine third-party constraints that may impact on the site such as Scottish Natural Heritage or National Trust for Scotland designations; • Desktop GIS analysis for geometry calculations (area, length, perimeter and coordinate capture), ‘buffering’ of features such as creating cable corridors or exclusions zones around wind turbines, integration of remote sensing data; • Client-facing visualisation, via the production of plans – these include plans for site acquisition, sub-contractor use, wayleaves and wider infrastructure. Our work also extends to detailed site plans using highresolution basemapping, and deed-compliant plans meeting Registers of Scotland criteria for servitudes, first registration or voluntary registration of assets; • Desktop GIS used to assist with effective
project management through internal visualisation of data and the storage of relevant non-spatial data alongside spatial data in databases. Desktop GIS has also been used to aid client reporting of major, long-term and extensive infrastructure projects. • GIS in the field. Galbraith now uses several platforms including mobile phones, hand-held GPS devices and tablets to capture GIS data in situ which is then analysed back in the office. Field use also extends to the display of relevant mapping data for the benefit of the client during site visits on mobile devices. The provision of GIS services for energy and utilities work continues to expand at Galbraith, and with this increasing use come additional benefits in terms of project quality for our clients.
Page 18 | Energy Matters Winter 2017-18 | galbraithgroup.com
daniel.campanile@galbraithgroup.com 01786 434634
Top: Galbraith’s WebGIS displaying multiple geospatial datasets - indicative land ownership, FCS ownership and SNH designations. Above: Imaging displaying the effective use of aerial imagery and GIS to quantify windblow damage.
CURRENT RENEWABLE ENERGY SUBSIDIES The renewable energy industry is undergoing a major shake-up as the Westminster Government reviews incentive entitlements across the board.
Feed-in Tariffs (FiT) Generation & Export Payment Rates 2017-18* Installed Banding capacity kW
7.78 6.24 6.24 4.54
7.77 6.24 6.24 4.54
Solar** ≤10 Higher Middle Lower >10≤50 Higher Middle Lower >50≤250 Higher Middle Lower >250≤1000 >1000 Stand-alone solar PV**
4.00 3.60 0.38 4.22 3.80 0.38 1.89 1.70 0.38 1.54 0.38 0.25
3.93 3.54 0.34 4.15 3.74 0.34 1.82 1.64 0.34 1.48 0.34 0.23
≤50 >50≤100 >100≤1500 >1500
8.26 4.88 2.87 0.80
8.19 4.83 2.86 0.79
≤250 >250≤500 >500
5.54 5.24 1.96
5.49 5.21 1.93
Renewable Obligation Certificates (ROCs)
CHP
≤2kW
13.95
13.95
For period 1/4/2016 to 31/3/2017*.
Export Tariff
5.03
5.03
The Galbraith energy team has researched the current subsidy regime to produce this reference guide for the most popular technologies. Subsidy levels are subject to change, so the figures given here are for guidance only. Current details of FIT rates, ROCs and CFDs can be found at www.ofgem.gov.uk/environmental-programmes.
Contracts for Difference (CFDs) Clearing prices as of 11/9/2017 (£/MWh, 2012 prices).
Hydro
Tariff p/kWh 01/10/17 01/01/18 –31/12/17 –31/01/18
≤100 >100≤500 >500≤2000 >2000
Technology
2021–2022 2022–2023
Offshore wind
74.75
57.50
Wind
Advanced Conversion Technologies*
74.75
40.00
Dedicated biomass with CHP
74.75
n/a
* (with or without CHP)
Anaerobic Digestion
Technology
ROCs/MWh
Anaerobic Digestion
1.8
Hydro
1.0
Offshore Wind
1.8
Onshore Wind
closed
Solar PV**
closed
* F or the 16th obligation, or compliance period CP16, which runs from 1/4/2017 to 31/3/2018, the ROC buy-out price has been set by Ofgem at £45.58/ROC.
* Publication date: July 7, 2017. Source: Ofgem. ** FIT payment for solar photovoltaic installations have been determined by the Gas and Electricity Markets Authority (Ofgem) under Article 13 of the Feed-in Tariffs order 2012, in accordance with Annex 3 to Schedule A to Licence Condition 33.
Domestic RHI Applications submitted for the period 20/9/2017 – 31/12/2017 Technology
Tariff p/kWh
** Small-scale Solar PV (<5MW) closed as of 01/04/2016 and to additional capacity added to existing accredited stations that does not take it above 5MW in total installed capacity from that date.
Biomass boilers and stoves
The availability of grace periods in line with those provided for Solar PV projects above 5MW back in 2015, enabling projects to be accredited up to 31/03/2017 where preliminary accreditation or significant financial commitments have been made on or before 22/07/2015, and for projects affected by grid delay. Source: Scottish Govenrment.
Ground-source heat pumps
19.86
Solar thermal
20.06
Air-source heat pumps
6.54 10.18
Source: Ofgem.
Non-Domestic RHI* Tariff name
Eligible technology
Eligible sizes
Small commercial biomass Solid biomass including solid biomass contained in waste Medium commercial biomass Large commercial biomass Solid biomass CHP systems Solid biomass CHP Water/ground-source heat pumps Ground-source & water-source heat pumps Air-source heat pumps Air-source heat pumps All solar collectors Solar collectors Small biogas combustion Biogas combustion Medium biogas combustion**
Tier 1 Tier 2 Tier 1 Tier 2 ≥1MWth All capacities Tier 1 Tier 2 All capacities <200 kWth <200 kWth ≥200 kWth ≤ 600 kWth
Large biogas combustion**
≥ 600 kWth
Tariff p/kWh 2.96 2.08 2.96 2.08 2.96 4.29 9.09 2.71 2.61 10.44 2.88 2.26 0.86
* Source: Ofgem. Tariff rates are displayed in pence per kWth and apply from 20/9/2017. ** Commissioned on or after 4/12/2013.
galbraithgroup.com | Energy Matters Winter 2017-18 | Page 19
OUR EXPERTISE l Valuations l Investment in Ârenewables/
financial incentives
l Planning l Land referencing l Telecoms l Utilities l Wind power l Biomass l Solar energy l Hydro power l Sales and purchases l Battery storage
OUR EXPERTS Our energy experts can be
INVERNESS
contacted in the following 8 of
Dougal Lindsay 01463 245380
our 11 offices:
dougal.lindsay@galbraithgroup.com
ABERDEEN Tom Stewart
PERTH 01224 860714
tom.stewart@galbraithgroup.com AYR Bob Cherry
01738 456075
calum.innes@galbraithgroup.com GALASHIELS
01292 292303
bob.cherry@galbraithgroup.com CUPAR Mike Reid
Calum Innes
Harry Lukas
01896 662829
harry.lukas@galbraithgroup.com STIRLING
01334 659984
Toby Kirkwood 01786 434635
mike.reid@galbraithgroup.com
toby.kirkwood@galbraithgroup.com
EDINBURGH Richard Higgins 07717 581741
For a full list of our energy
richard.higgins@galbraithgroup.com
galbraithgroup.com
experts, please visit
Offices across Scotland | Sales & Lettings | Farm & Estate Sales & Acquisitions | Property & Land Management Subsidy Trading & Advice | Rural | Energy | Forestry | Commercial | Sporting | Agricultural Loans