POWERING UP

Renewable energy has been a part of the landscape in Scotland for many years, with the extensive windfarms to the south of Glasgow a familiar sight for residents of the central belt and large scale wind turbines off the east coast, along with various hydro schemes across the north of Scotland.

It is also not uncommon to see solar panels or wind turbines on farms, where landowners have perhaps installed solar panels in a field or have entered into an agreement with a renewable energy company for a wind turbine. Galbraith has been involved in negotiating contracts for some of these projects and they can be commercially attractive for the landowner.

As we write the cost of energy remains high for businesses and consumers alike, and there has never been more discussion about renewable energy as a means to help ensure the security of our domestic energy supply, (reducing reliance on foreign states such as Russia); to help keep costs under control by harnessing natural assets such as wind and solar; and to facilitate the transition to net zero.

With the introduction of Scotland’s National Planning Framework 4 (NPF4) in February 2023, there is now clear support for the development of renewable energy in Scotland, in terms of both offshore and onshore schemes and smaller projects. NPF4 sets out planning options which are focused on accelerating the reduction of carbon emissions, part of which increases the possibility of renewable installations on sites which previously would have been considered too sensitive, in a bid to reach Scotland’s challenging Net Zero goals.

It is often thought that renewable energy projects only include windfarms and large solar farms, best suited to estates located in remote areas with vast areas of open land. However, with the increase in use of renewable energy sources which produce intermittent levels of electricity, there has been increased pressure on the National Grid. Wind in particular generates an excellent amount of power in the winter but less in the summer, requiring the National Grid Electricity System Operator to balance periods when there is too little power (by using fossil fuels to provide the shortfall) and paying wind energy companies when there is too much wind and the grid is congested. The cost of these grid balancing payments reached £215m in 2022 and is predicted to rise to as much as £2.5bn per year by 2025. All of these issues result in an increase in demand for areas of land for battery storage. Battery storage sites are required to ensure that the electricity generated by renewable energy sources can be stored and then released to the grid when needed, to match the demand for electricity with the supply.

This creates an opportunity for a variety of landowners, particularly those situated close to an urban area. For a battery project, the storing of 50MW can be done on 2 acres of land, so in many cases, only a small area of land is required for such a battery, yet this kind of agreement offers a good potential income for landowners in the region of £2,000 per MW.

The battery units themselves look not dissimilar to shipping containers and the sites required vary significantly in size, depending on the capacity of the local substation and planning restraints.

Battery storage sites are situated either next to substations or colocated next to renewable energy projects and crucially are in areas where the grid is constrained.

With the introduction of NPF4 and greater commitment from politicians to aiding the transition to renewable energy generation, it is likely that planning obstacles may be more easily overcome in the future.

Anyone considering the sale or lease of property for electricity storage should examine closely the economic drivers and seek expert advice on revenue potential and valuation.

Galbraith is actively working to link developers and landowners to these desirable sites. Our planning and energy teams are undertaking site referencing, preparing feasibility studies, negotiating site leases, and preparing planning applications. It is a fast-moving sector and it is essential to ensure that landowners will not be left behind.

For more information please contact our rural & energy teams in your nearest office. n