Galbraith Energy Matters Spring 2022

Energy Matters

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The future’s green for hydrogen Small-scale nuclear reactors Boost for offshore wind in Scotland Electrifying Scotland’s railways

ISSUE 24 | SUmmEr 2022

CONTENTS

WELCOME

By Mike Reid Head of Energy

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All that gas: Green hydrogen has a role in our renewable energy future, but there are challenges to overcome first.

Facing up to the energy challenge A combination of factors have left the British economy reeling and one of the main problems is the price and availablity of energy.

Security of supply is firmly back on the agenda, with the emphasis on renewable energy to lead the way in providing the power we need while helping to combat climate change at the same time.

The war in Ukraine has triggered constraints on trade with russia, driving oil and gas prices to new highs and threatening recovery across Europe. Prices for diesel, electricity, wheat and fertiliser among others are affecting families, businesses and agriculture.

One might expect the effects on the UK to be milder than other European countries, as russian natural gas makes up less than 4% of supply but, as participants in global commodity markets, we’re as susceptible to price movements as many others.

While we face a period of uncertainty, now with the addition of inflation, lessons are emerging.

First, the UK should be more selfreliant – in energy and food.

The case for a large-scale shift to renewable energy to limit the effects of climate change, underlined by the COP26 conference in Glasgow, is now

strengthened on the basis of national security.

Developing both reliable grid-scale electricity storage and green hydrogen production to support intermittent wind and solar power remains a big challenge but is one that must be tackled.

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The Government appears serious about climate change and emission-free energy supply, as shown by measures such as its Longer Duration Energy Storage Demonstration (LODES) competition. On 23 march, the Chancellor announced further financial incentives for energy saving and green technologies for homes and businesses.

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The Prime minister’s newly revived commitment to safe, economical, nuclear electricity for emissionfree, baseload energy is positive (pp12-13), if not likely to be welcomed by all.

Telecom leases: How to avoid the pitfalls.

Making a difference: Why not join the Galbraith energy team?

16 Onshore wind: Fair shares for developers and landowners.

A further way to foster self-reliance is to encourage greater demandside energy efficiency, the so-called hidden fuel. This will require both a culture change and a commitment to finding technical solutions to make fuel go further.

Time to take up that challenge.

id e R e k Mi 4

Energy matters is produced by Allerton Communications, marlborough, Wiltshire, and designed by George Gray Media & Design, Saint-Andeux, France. © CKD Galbraith LLP. Page 2 | Energy Matters | Summer 2022 | galbraithgroup.com

Offshore wind: Scotland is taking a huge step in decarbonising energy production by giving the go-ahead to 17 new offshore windfarm developments.

16 Counting capital: Managing natural capital is a massive but essential job for businesses.

14 Who needs sunshine? Solar PV joins Scotland’s energy mix.

24 Follow the money: Demand for green energy investment assets is at an all-time high.

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Weather eye: Power lines are being replaced in many parts of Scotland to improve resilience in the face of more frequent storms.

Turn again: A major project to develop wind turbine blade recycling in Britain has won funding of £2m.

18 COP26 and after: Did we get what we wanted from the climate conference?

26 On track: Full steam ahead for the electrification of Scotland’s rail network?

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The beauty of biomass: Opinion is divided on the merits of biomass, but it has an important role in the move away from fossil fuels.

Cold comfort: Move to ban wood-burners gets a frosty reception.

Ride on: making the office more bike friendly.

12 Nuclear option: Can small-scale nuclear power bridge Britain’s energy gap?

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Dry ice tie-up: How waste CO2 from anaerobic digestion is being put to good use.

Towards net zero: First steps to meaningful change at Galbraith, and telling a credible carbon story in a rapidly changing world.

Flexibility... the key to farming subsidy success.

24 Broadband wayleaves: Getting the right terms from BT Openreach.

27 Current renewable energy subsidies.

galbraithgroup.com | Energy Matters | Summer 2022 | Page 3

new offshore windfarms get the go-ahead

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A big step forward in offshore wind power advances renewable energy and boosts the Scottish economy. Richard Higgins reports.

Scotland has taken a huge further step in decarbonising its energy production by giving the green light to 17 new offshore windfarm developments.

The majority of the projects are earmarked for the eastern side of the country, with four to the north and one to the west coast, just off Islay. They will comprise a mix of fixed and floating turbines, partly depending on depth.

Crown Estate Scotland, the self-funding public corporation that invests in projects large and small, announced the outcome of its application process for ScotWind Leasing, the first Scottish offshore wind leasing round in over a decade.

Key to the successful development of these projects will be the use of knowledge and experience built up over decades by companies, workforces and professionals in advancing the offshore the oil and gas sector both in the UK and abroad.

Armed with experience gained in a maturing renewable-energy market, developers are able to deploy resources more quickly, having learned much over the last 10 years or more.

Developers are digesting the news working through their project plans with their partners, advisers and supply chain.

That said, planning and logistics in a major set of engineering schemes make it unlikely that all the projects will develop quickly in what is the first offshore leasing round

since the management of offshore wind rights were devolved to Scotland.

Just under £700m will be paid in option fees by the successful applicants, which include new entrants to the UK markets with experience overseas, and passed to the Scottish Government for public spending. The 17 projects, chosen from among 74 applications, have been offered options reserving rights to specific areas over more than 7,000km2 of seabed.

Crown Estate Scotland suggested supply chain investment in Scotland would amount to billions of pounds. The potential for upside for the ports and harbours of the north and east of Scotland is significant.

Discussions continue about a potential marine grid linking into north east of England and supplementing the Western HVDC Link, a high-voltage direct current undersea electrical link between Hunterston on the west coast and Flintshire Bridge in North Wales.

Challenges remain, notably producing power in a grid charging system that increases costs to generators according to how far they are from load centres in the south-east of the UK. The difference between the north and the south is increasing over time, as described by Adam morrison, Project Director for moray West Offshore Wind Farm at Ocean Winds, in Energy matters issue 20.

That said, the extra generation capacity will benefit the overall energy mix and play a big role in the drive to net zero.

richard.higgins@galbraithgroup.com 07717 581741

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Just under £700m will be paid in option fees by the successful applicants, which include new entrants to the UK markets with experience overseas, and passed to the Scottish Government for public spending.

galbraithgroup.com | Energy Matters | Summer 2022 | Page 5

Flexibility is the key to subsidy success Farming policies need to be adaptable at a time of big changes.

Rachel Russell reports.

Farmers and land managers in Scotland continue to await guidance on the replacement farming subsidy system, including timescales for its anticipated start.

Green hydrogen: Renewable hydrogen will play a role in powering our future. Mike Reid looks at some of the challenges.

This follows the ending on 17 November of a consultation process: Agricultural Transition – First Steps Towards our National Policy.

Changes to wider global markets experienced since the Basic Payment Scheme was introduced in 2015 beg the question whether any new subsidy scheme should offer more flexibility so that food production and environmental requirements can be amended to cope with wider challenges such as Covid-19 or global food security concerns.

This spring, many industry leaders were asking if Ecological Focus Areas (EFAs) should be incorporated back into the crop rotation in order to address growing concerns over global food security. For those predominantly winter cropping, such a decision would come too late, and for those spring cropping, ground preparation may have been carried out over winter, with inputs already purchased and budgeted for, leaving little scope for flexibility at that late stage.

2020 saw the abolition of the three crop rule following a very wet sowing season and the rule hasn’t returned since. At the time it was decided that EFAs would remain, as these areas were still seen as favourable to the climate and the environment. Given the unprecedented challenges faced since the scheme came in, this is now being discussed, and there is a more widely recognised focus on soil health as an environmental measure, as well as food production.

At the time of writing the 2022 Single Application Form window has just opened and EFAs remain part of the scheme requirements, but farmers and land managers continue to face the challenge of meeting policy requirements and striving to achieve a viable return, even as diesel and fertiliser prices continue to rise.

We may be seeing improved commodity prices with wheat futures at a 14-year high, but if production of theses crops is curtailed by the rising cost and availability of inputs, will it be possible to produce enough food for national and global demand?

At this stage we anticipate there may be a five to seven year transition towards a more environmentally and carbon-friendly subsidy scheme, but the last seven years have demonstrated that while the agricultural industry is robust, the governing policies must offer flexibility.

rachel.russell@galbraithgroup.com 07884 657219

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Renewable hydrogen, also known as green hydrogen, should have a vital role to play in decarbonising industry and transport.

It is important to recognise that although hydrogen is a source of energy it is also a way of storing energy generated by another power source.

Grey and blue hydrogen The vast majority of the hydrogen used today is grey hydrogen, produced from fossil fuels emitting carbon dioxide into the atmosphere, contributing to climate change.

Blue hydrogen is also produced using natural gas, but then capturing carbon dioxide emissions, making it cleaner than grey hydrogen but not completely carbon neutral.

Green hydrogen renewable or green hydrogen is created by using renewable electricity to split water into hydrogen and oxygen through a process known as electrolysis. The hydrogen is collected, transported and used while oxygen is released as the bi-product or captured for use by others. The by-product after hydrogen combustion is not

fuel fit for a renewable future carbon dioxide but water, making the overall process carbon neutral.

THE HYDROGEN CYCLE

Renewable hydrogen development Developing a renewable hydrogen industry in the UK is in its infancy and not without challenges.

The key to producing green hydrogen is to have an abundance of cheap, low-carbon electricity but currently the cost of producing green hydrogen exceeds that of other hydrogen production.

One critical component of developing green hydrogen as the fuel of the future will be reducing the cost of production, but hydrogen carries one quarter of the amount of energy per unit compared to natural gas, can embrittle metal and is highly combustible.

Future demand for green hydrogen The increase in use of renewable energy has helped the UK progress in decarbonising the power sector.

However, it is more challenging to decarbonise sectors which have high power requirements including industry, aviation, shipping, heavy goods vehicles and agricultural production.

In these sectors electrification is difficult and hydrogen has the potential to play an essential role in displacing carbon emissions.

Green hydrogen from UK renewables We are seeing hydrogen production proposed as a component of many renewable development schemes, whether from the initial conception of new schemes or by adding an electrolyser to existing wind farms or solar parks.

We are actively involved in agreeing terms to facilitate hydrogen production which hopefully

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We are seeing hydrogen production proposed as a component of many renewable development schemes.

will have a large part to play in the UK’s transition to net zero by 2050.

When considering any hydrogen scheme there are many important factors for landowners to consider such as the quantity and source of the water supply required as well as the implications of transporting the hydrogen off site.

mike.reid@galbraithgroup.com 07909 978642

galbraithgroup.com | Energy Matters | Summer 2022 | Page 7

Towards...

First steps to meaningful change It’s the term on everyone’s lips, but what does Net Zero mean for the average professional services firm?

Calum Innes reports on the Galbraith experience.

We contracted a specialist consultancy to review our historic activities in order to provide a measure of our impact on the environment in terms of CO2.

The results were perhaps unsurprising while at the same time thought provoking. About half of our emissions arose from business travel whilst a further third related to electricity and gas used in lighting and heating our offices.

Of course last year our offices were barely occupied, and gas and electricity usage were reduced; however, our staff were heating their own homes for longer periods and many ruralbased staff currently rely on oil, the most carbon-intensive fuel source. We produced less carbon than in the previous year but the reduction was less than we had initially thought.

So what are we going to do? We could offset the impact our activities and salve our conscience by planting trees, but unless our actions result in carbon sequestration that would not have occurred otherwise, we are probably kidding ourselves.

We are told the biggest win is to switch our electricity supply to a 100% renewable tariff; but again this is perhaps a case of ‘smoke and mirrors’ as the renewable electricity will be generated whether we purchase it or not and therefore are we really reducing emissions overall?

The answer, I think, has to be a change in mindset, culture and behaviour. I suspect it will take a while before our fleet is moved over to electric vehicles

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but in the meantime we need to learn from recent events. Do we really need to have a meeting in person? If so, can we get there by train or if not, agree with the others attending to hold the meeting somewhere where all attending can get there by using public transport. A surprising fact is that a journey by train produces a quarter of the carbon of the average motor vehicle.

We are tied into property leases which constrain the ability to move swiftly, but I’m sure when we look to relocate our premises to better take account of new flexible working practices, we will look far more closely at a building’s sustainability credentials.

We have started a conversation with our staff about what we should do and we are listening intently. There is a real desire to do better and immediate actions have been to monitor all visits to our offices and measure transport choices together with monitoring energy use to identify potential opportunities to reduce power usage.

The world is currently in turmoil with new pressures to increase fossil fuel production within the UK and access alternative sources; but the reasons for limiting climate change to 1.5˚C have not gone away and we still need to be clear about which changes will have a real effect and which actions only make us feel better!

calum.innes@galbraithgroup.com

07909 978643

Decarbonisation or greenwash?

Standards like the Carbon Code are valuable tools, but they are not the complete answer, says Eleanor Harris.

The UK Government supports carbon codes for creating woodland and restoring peatland, and we can expect codes for soils, hedgerows and saltmarshes in the coming year.

And there are other ways to tell a carbon story too. Carbon codes are an attractive policy tool for landowners, businesses, and governments. They redistribute income towards decarbonisation without being a tax. They raise land management standards without being a regulatory framework.

They are simple for buyers, light-touch for governments, and empowering for landowners.

Codes, however, have limits.

Landowners are becoming more and more reluctant to sell credits to landless businesses because it is more valuable for them to retain them, for example for net-zero food production or tourism.

Increasingly, the mechanistic nature of carbon codes is meeting criticism. Their detailed requirements, intended to ensure robustness, leave them open to accusations of compliance in the letter rather than the spirit of the law – greenwash rather than decarbonisation.

This is potentially disastrous because offsetting is all about confidence. There is no regulatory requirement to ‘go net zero’: the aim is to provide

investors and customers with confidence that a business is serious about climate change. If offsets are tarnished with suspicions of gaming the system, they become as worthless as paper money in a collapsing economy.

So interesting things are happening in carbon markets: businesses are using the metrics of the codes in their own ways to tell credible carbon stories without actually registering offsets; or exploring new technologies such as LiDAr or soil testing to demonstrate carbon benefit from land uses such as woodland management which don’t have carbon codes at all.

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The mechanistic nature of carbon codes is increasingly meeting criticism.

The claim is key. ‘We are net zero’ is easy to understand, but equally easy to criticise as greenwash. ‘These are our plans for carbon reduction, this is what we cannot reduce and why, and this is the measurable carbon benefit we are delivering over and above our business activities’ is more complex, but a rich, transparent and credible claim in a world where investors and consumers are increasingly carbon-literate.

So while we can certainly help you with carbon credits, we may also suggest you take a step back, to see them in the context of low-carbon production and provisioning, climate adaptation and biodiversity, and the telling of a strong and credible carbon story in a rapidly changing world.

eleanor.harris@galbraithgroup.com 07585 900870

galbraithgroup.com | Energy Matters | Summer 2022 | Page 9

Underground cables offer better storm resilience.

More reliable power to the people Network improvement continues, with storm resilience a priority, reports Rachel Russell.

Scottish Power and Scottish Southern Energy (SSE) continue to invest to improve the electricity network across Scotland.

With the increasing number of storms, the investments seek to secure supplies to homes and businesses and aim to improve storm resilience.

To ensure the networks reflect changing demands and climate related pressures, Scottish Power and SSE are reinforcing their overhead and underground networks by replacing existing assets with lines which have increased capacity and which transport energy at a higher voltage.

This is often achieved by the installation of new conductors which operate at a higher voltage or the construction of larger towers.

The replacement of ageing overhead line infrastructure is a key investment area in Scottish Power and SSE’s modernisation programmes and as a result, we are seeing an increasing number of approaches seeking to carry out on-line rebuilds or replacement line builds, with redundant lines then being dismantled.

In the first instance, it is important to establish what agreements are already in place and what

works can or cannot be carried out under any existing agreement. The practicalities of the scheme then need to be considered, appropriate terms and payments agreed, before giving the green light for any works to start on the ground.

These might be route amendments, access provisions, pre-scheme drainage and accommodation works as examples.

We would encourage any landowner or land manager to seek professional assistance if approached by a utility provider in respect of any works. In almost all cases, your reasonable professional fees and expenses will be met by the requesting party.

In the case of Scottish Power, the Land Code of Conduct sets out the way in which Scottish Power seeks to work with landowners/occupiers, but the on-the-ground practicalities of such a scheme ultimately lie at the mercy of the subcontractor carrying out the work and the Code is not always at the forefront of their minds.

By appointing Galbraith as an agent, you can be sure that any works are carried out in accordance with the agreed terms, while ensuring that you are compensated for your reasonably incurred losses.

rachel.russell@galbraithgroup.com 07884 657219

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It is important to establish what works can or cannot be carried out under any existing agreement.

Project to keep turbine blades out of landfill wins £2m funding A major project to develop wind turbine blade recycling in Britain for the first time has been given the go-ahead after it secured funding. Mike Reid reports.

Composites have long been valued by sectors such as energy, aviation and auto manufacture for their strength, lightness, flexibility and buoyancy. But experts have yet to separate glass fibres from hardened resin for recycling, to reproduce materials retaining most or all of their original qualities.

A Scottish team seeking to make windturbine blades a key part of the circular economy have received a £2m funding boost.

Currently, turbine blades are broken up for use as construction materials such as aggregate, or go straight to landfill – a fate at odds with their role in advancing the circular economy.

As reported in Energy Matters issue 20, experts at the University of Strathclyde are working on a process to give new life to redundant blades that might otherwise go to landfill.

A consortium led by Composites UK, main commercial partner Aker Offshore Wind (‘AOW’) and researchers at Strathclyde aims to bring a more sustainable future for the global wind industry and the composites manufacturing sector while accelerating the drive towards net zero emissions and waste and creating new skills and jobs in the UK. A pilot project has begun to find a commercially viable solution, overseen by the trade body Composites UK, with main commercial partner AOW, and the University of Strathclyde’s Advanced Composites Group and Lightweight manufacturing Centre, which is a part of the National manufacturing Institute Scotland Group. Other partners are Nottingham University and the companies SUEZ, GrP Solutions and Cubis.

The project aims to commercialise a revolutionary method developed by Strathclyde to separate the components and recover the glass-fibre so it can be reprocessed, moulded and reused in other industries. Innovate UK, the UK Government’s innovation agency, awarded £1.3m, with AOW contributing more than £500,000.

Waste from wind turbine blades alone is expected to reach around 2m tonnes globally by 2050, and UK volumes of composite waste now exceed 100,000 tonnes per year. With an average lifespan of 25 years, many of the first turbines installed are now coming to the end of their life and decommissioning old models could become a large-scale activity in Scotland.

mike.reid@galbraithgroup.com 07909 978642

A GLObAL fuTuRE iN bLADE RECYCLiNG? Research by the Holyrood Government-funded Zero Waste Scotland found that some 5,500 turbines will be decommissioned in Scotland, including more than 60,000 tonnes of fibreglass and 90,000 tonnes of resin and other materials that are currently landfilled.

Hosting thousands of on- and offshore turbines as part of the transition from fossil fuels, the UK could be the global leader in blade recycling and provide a futureproofed solution for turning waste into new resources.

Professor Sir Jim McDonald, Principal and Vice-Chancellor of the University of Strathclyde, said: “Wind energy is a key component of the transition and it is essential the technology and materials that provide renewable energy are as sustainable as they can be.”

If successful, the three-year pilot could lead to major investment in composite recycling technology being made in Scotland or elsewhere in the UK. Rival groups are working on their own solutions.

galbraithgroup.com | Energy Matters | Summer 2022 | Page 11

Can small-scale nuclear power bridge Britain’s energy gap?

Nuclear energy – huge, costly and past its prime?

Not according to proponents of small modular reactors – and it’s net zero, too.

Philippa Orr reports.

The continuing energy crunch has highlighted the challenge of achieving the UK’s target netzero greenhouse-gas emissions by 2050 while producing enough energy to run the economy.

power early on, Britain gave up its leading position in the global industry, driven by safety and security concerns and the development of abundant North Sea oil and gas.

The UK has long made extensive use of its substantial deposits of oil and gas, but our climate-change commitments – reaffirmed at COP26 – oblige us to cut back on fossil fuel use without bankrupting the country. Huge progress has been made in the generating capacity of wind and solar, but their weather dependence makes them unreliable until we’ve made the huge strides necessary in static energy storage. meanwhile global demand for energy shows no sign of waning.

The atom continues to provide a big share of UK electricity generation. But while the UK makes about 20% of its electricity from nuclear, almost half of current capacity is to be retired by 2025.

Nuclear still presents big challenges, such as safe storage of waste and the potential threat of home-grown or external attack. The arguments persist, with the EU labelling nuclear ‘green’ in February despite the German government rejecting the technology and continuing with plans to close the country’s three remaining plants this year.

Alternative fuels such as hydrogen and nuclear fusion must make considerably more progress before they get anywhere near filling the energy gap. So step forward nuclear fission.

Having pioneered relatively safe, reliable atomic

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meanwhile, there is considerable support in Government and industry for a new approach to nuclear technology that would deliver reliable, continuous electricity, without greenhouse gas emissions.

The UK engineering group rolls-royce is leading a consortium to develop a UK network of small modular reactors (Smrs) to provide costcompetitive, scalable net-zero electricity, both for the grid and to decarbonise industrial sites.

To underline its ‘clean energy’ message, the company says this is also an ideal way to power the production of hydrogen – seen as key to the energy transition in the wider heat and transportation sectors, and synthetic fuel for uses including aviation. much of the investment will focus on Scotland and the North of England and there is potential to export the technology – though the big benefit is a decarbonisation technology available to the UK grid in the early 2030s.

The size of two football pitches, each Smr power station would supply one million homes. Building numerous versions of the same product on a controlled production line and moving them onsite via lorry would bring economies of scale, undercutting the cost of stand-alone nuclear power stations.

According to their backers, Smrs provide a greener, lower-cost alternative to huge single-site nuclear stations such as Hinkley Point C – currently under construction and criticised for its

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The size of two football pitches, each small modular reactor would supply one million homes.

high cost and for handing over too much national infrastructure to France and China.

In march, the Department for Business, Industry and Industrial Strategy asked the Office for Nuclear regulation (ONr) to begin the approval process for rolls-royce’s 470mW Smr design.

A long-time maker of reactors for royal Navy submarines, rolls-royce says Smr combines proven nuclear technology with modular production and on-site assembly to harness British engineering, design and manufacturing knowhow.

“Built in one location, the elements of an Smr can be shipped over sea or by rail or road and assembled on site, with a predictable programme from first concrete to commissioning in just four years, including 500 days on site for the modular build,” according to rolls-royce Smr, a consortium that, alongside rolls-royce, includes Assystem, Atkins, BAm Nuttall, Jacobs, Laing O'rourke, National Nuclear Laboratory, Nuclear Advanced manufacturing research Centre and TWI.

philippa.orr@galbraithgroup.com

07917 220779

galbraithgroup.com | Energy Matters | Summer 2022 | Page 13

bring me sunshine: Solar PV joins Scotland’s energy mix Most people may not associate Scotland with solar energy, but generating electricity from sunshine is becoming a significant rural industry, says Philippa Orr.

When asked what the weather is like in Scotland, I am certain most of us would say “wet and windy”.

Such impeccable conditions to generate electricity from turbines and hydro explain why these renewable technologies have the greatest installed capacity in Scotland.

So, why are we seeing growing instances of landowners being approached by developers looking for land that is suitable for solar?

It is a misconception that solar photovoltaic (PV) needs heat and cloudless skies to produce energy. In fact what is required is light or solar irradiance – the amount of electromagnetic radiation received from the sun per metre squared. Some solar PV installations in Scotland, such as in Dundee and Aberdeen, can perform just as well as installations in the south of

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England because of Scotland’s slightly longer daylight periods.

There is evidence that the growth in solar PV developments we are witnessing will benefit Scotland by helping to meet fuel poverty, community and national energy targets, as solar is one of the most versatile renewable-energy sources.

As the capital and operating costs for solar decline, energy market conditions will allow subsidy-free solar farms to compete with conventional generators. Technological advances mean solar farms are able to produce more megawatts per acre than ever before.

Globally, it is not only the technology that we are seeing change but also the ground management under the panels. In Scotland, sheep grazing and solar farms can go hand in hand, but in warmer climates have seen the introduction of agrivoltaic

Why not join the Galbraith energy team?

Tackling today’s challenges and delivering for clients — Mike Reid, Head of Energy, describes how people make all the difference at Galbraith.

People make the difference in every undertaking. They are the way organisations transform informational and physical resources into products and services that clients value.

They are capable of generating ideas, solving problems, making decisions, and generating learning that improves the organisation.

Employees are the most valuable assets an enterprise has, as their abilities, knowledge, and experience can't be replaced.

Here at Galbraith we need good people to help us address climate change as well as embracing the natural capital opportunities for our landowners and farming customers and clients.

We are currently looking for experienced land officers across Scotland and the north of England to help support our busy energy team, working on a wide base of projects ranging from land acquisitions and property consultancy, including planning and wayleaves, to supporting our framework partners SSE and Scottish Water and our involvement in both offshore and onshore wind and a wide variety of renewables projects throughout Scotland.

systems, which allow the production of energy from solar panels and agricultural crops on the same area of land. The idea involves the panels and the crop sharing light, so the panels are placed over part of the crop, generating shade which creates different microclimates. This has resulted in more freshness in the crop and lower losses caused by evaporation.

However the process requires special harvesting machines and the panels must be installed much higher off the ground. This may not be a practice that we will see in the UK anytime soon because of climate constraints, but it shows advances are being made to solar technologies.

At Galbraith, we are progressing many solar heads of terms and more recently we are seeing the introduction of co-located energy projects with the introduction of battery and/or hydrogen to further futureproof the renewable projects.

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Some solar PV installations in Scotland can perform just as well as installations in the south of England.

We ensure that everyone’s contribution is valued and offer varied and diverse career opportunities that bring excitement and recognition.

Our business vision builds on the work already being done across the various business streams and identifies workforce priorities to support the delivery of the company strategic ambitions, vision and objectives, while demonstrating our values in all that we do.

At Galbraith we support our staff to deliver the ultimate client service and to be their best wherever they work. We do this by providing inspiring leadership to achieve things they never thought they could.

With our passion for environment, climate change and natural capital opportunities, this is an exciting time for like-minded people to come and join the energy team of our business to help us achieve and deliver new levels of success.

If you think you have land suitable for solar or have been approached by renewable developers please get in touch with your local Galbraith office and we will be able to help.

If this sounds like you, why not get in touch?

philippa.orr@galbraithgroup.com

07917 220779

At Galbraith we seek to bring the best out of people and enable talent, ideas and collaboration between business streams.

Picture: Gustavo Fring, Pexels

mike.reid@galbraithgroup.com 07909 978642

galbraithgroup.com | Energy Matters | Summer 2022 | Page 15

Onshore wind: Fair shares for developers and landowners Uncertain times make it vital to agree lease terms that take account of fluctuating prices, says Mike Reid.

Farmers and landowners are currently facing unprecedented challenges.

These are the result of Brexit, pressure from environmental concerns and now war in Ukraine, in which sanctions against russia have led to huge rises in crucial commodities such as diesel, fertiliser and energy costs.

Protecting income and maintaining profitability to ensure survival is imperative and that often involves diversifying into alternative income sources such as renewable energy.

Despite the end of subsidies, development of larger wind farms is continuing across Scotland as the reduced costs of production enable wind power to compete effectively with other sources of energy production.

The economics of onshore wind production have been clearly brought into focus as a result of the war in Ukraine, with rising gas costs leading to higher electricity prices. An advantage of wind energy is that there is no payment for the wind resource so the costs of production aren’t impacted by international events.

While electricity prices remain high, renewable developments are set to generate higher turnovers leading to increased profitability as their costs of production are largely unaffected.

Whereas the principle of landowners receiving a share of the turnover of any renewable development is common practice, we at Galbraith have long advised owners to look closely at securing variable turnover rental agreements with developers.

This rental structure gives owners a

variable percentage of the turnover linked to the average energy price over the year.

With wholesale prices rising so strongly, this is more important than ever.

Typically, developers of onshore wind farms are offering landowners rentals of between 6 and 8 per cent of gross income for the initial period of any development, with these rents increasing over a couple of agreed review dates over the term of the lease. With a variable turnover rental structure, owners could see these rents more than double in times of high electricity prices.

Not only does this structure maximise revenues, it also provides a measure of protection from the commodity price fluctuations that are hitting food producers so hard. As the business’s electricity costs increase, the

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In our experience, developers soon see the sense in sharing revenues.

owner will benefit from an increased rental return from the renewable development, helping to offset these higher energy costs.

The developer also benefits from these variable turnover rental agreements as they are structured so the rent they pay when the electricity price drops below a certain level is lower than they would have to pay under a standard fixed percentage formula. In our experience, developers soon see the sense in sharing revenues.

It’s a question of mutual benefit rather than one side taking all the upside.

mike.reid@galbraithgroup.com 07909 978642

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Getting the Managing natural capital is a massive but essential job for businesses.

Eleanor Harris looks at how the task can be approached.

We know how to measure the bottom line.

We’ve learned to measure carbon. But how do you measure ‘natural capital’ – the total demands and impacts of our activities on the resources of the earth?

Natural capital management is a massive task, but for businesses, it’s becoming vital. Vital for confidence that your supply chains will continue to supply – food, wood, sand, water, wind or photosynthesis. Vital also for confidence that investors, regulators or customers will not call you out for changing climate, destroying biodiversity, or taking up precious land – perhaps far away along your supply chains.

A massive task, but it has to begin somewhere.

So we have developed our ‘phase one’ natural capital assessment for land, which consists of three key elements.

measure of natural capital First, a GIS-based ‘atlas’. This collates spatial data on natural capital assets such as climate, soil, geology, water and vegetation, from satellite imagery and sources like the met Office and Ordnance Survey. It uses this data to model ecosystem services such as carbon storage, pollination, provisioning and recreation.

Second, our in-house land management expertise. many spatial modelling tools are available; what distinguishes ours is that it has been developed in-house by our farm and forestry teams. We have been on the learning curve together, and invested significant time in developing a tool which we not only understand but have designed to be as useful as possible.

We know what the data says (and what it doesn’t) and what opportunities it suggests.

While some of this expertise is incorporated into the printed atlas, a core part of the process is the discussion of it with the client to provide tailored interpretation and advice.

Third, a routemap for action. The atlas should not end up on a shelf, a natural capital box ticked.

From identifying management aims to synthesising diverse land uses to scoping

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Over the coming year, we will be developing our toolkit to provide an increasing range of specialist solutions.

investible projects, our assessment sets you on a natural capital management journey which in time should become a process as integral to business management as the financial accounts.

This assessment is a first step, providing an overview and identifying opportunities for further investigation. many of these, such as woodland creation, peatland restoration, regenerative agriculture, or habitat creation, are services we already provide. Over the coming year, we will be developing our toolkit to provide an increasing range of specialist solutions which fit the unfolding natural capital market.

Natural capital is complex and can seem overwhelming. Our assessment is the first step to finding a route through the maze. The prize is great: in the maelstrom of market, regulatory, and environmental changes, natural capital management provides confidence that your business is resilient – both to extreme weather events and to the storms of human opinion. eleanor.harris@galbraithgroup.com 07585 900870

galbraithgroup.com | Energy Matters | Summer 2022 | Page 17

Did we get Crawford Mackay looks at the aftermath of the Glasgow climate change conference.

In advance of United Nations Climate Change Conference – COP26 – we set out what Galbraith hoped to see achieved.

Picture: Cycling Scotland.

Ride on: making the office more bike friendly Lockdown has spurred a move to greener commuting, reports Richard Higgins, and canny employers are adapting workplaces to make it easier for staff.

A quiet movement throughout the pandemic has been a shift towards greener methods of commuting.

A weekly survey carried out by the Galbraith commercial management team uncovered an increasing number of people looking to commute by bicycle and to continue daily walking and cycling – healthy habits adopted during lockdown.

Separate data from Cycling Scotland showed a 47% rise in people cycling in the 12 months to march 2021, an increase supported by numerous temporary walking and cycling infrastructure projects, some of which have become permanent.

But the ‘reoccupation’ survey of commercial tenants also found that many buildings, retail parks and other sites did not cater for these alternative methods, resulting in staff who normally operated from these buildings choosing to continue to work from home.

The data, collected to ensure compliance with insurance requirements and their associated discussions, identified a number of barriers that deterred occupiers from returning once Government restrictions had eased.

In order to lure employees out of their homes, our clients’ buildings would need to provide facilities including cycle parking, showering, changing and

storage to suit post-covid working patterns. These would be especially necessary in offices as employers made strategic decisions on future space requirements.

Galbraith has identified potential funding sources to aid investment in improving site facilities to promote commuting by bicycle. Employers in buildings and retail parks would need actively to promote this green transport initiative and its benefits to employees.

Support from Cycling Scotland could make a big difference. Competitive funding benefits include up to £25,000 per ‘common service charge’ area in each building, Cycling-Friendly Employer programmes and potential funds to secure bikes and accessories.

This funding is designed to meet tenant needs and could improve our clients’ investments while retaining occupiers who might otherwise move to alternative properties that catered to alternative commuting methods.

The Glasgow session ended with a positive communique and a global agreement to accelerate action on climate change this decade, with a communique which said all the right things. However now that the dust has settled on the event, have we really got what we wanted?

£ Invest global, act local We wanted to see the flow of capital that exists on a global scale deployed at a local level and made accessible to all.

There was a commitment to significantly increase financial support through the Adaptation Fund as developed countries were urged to double their support to developing countries. This will not directly benefit the UK at a local level, but we hope it will be deployed at a local level in developing nations.

Galbraith successfully achieved funding for its first tranche of sites – three office buildings in Edinburgh city centre, where our building surveyors are overseeing project adaptations and the installation of cycle parking and showering facilities.

The projects are developing into unique and creative designs which will be showcased in future publications. more complex applications are likely to proceed in tandem with council plans to improve the National Cycling Network, extending to retail parks in defined locations.

richard.higgins@galbraithgroup.com 07717 581741

Page 18 | Energy Matters | Summer 2022 | galbraithgroup.com

UK as a climate leader The Glasgow climate pact will speed up the pace of climate action. All countries agreed to revisit and strengthen their current emissions targets to 2030 in

what we wanted from COP26?

2022. If the UK wants to be seen as a climate leader, then this will be the area to judge their ambition, as will the development of domestic policy to incentivise the energy transition.

War in Ukraine has highlighted European reliance on fossil fuels from russia. Therefore ensuring we are a climate leader with a robust transition to green energy is not just important for meeting climate change, but national security.

fertiliser prices are in the region of £900/ton and milling wheat £320/ton, both record highs. Whilst we may never be entirely self-sufficient for food in the UK, we can and should do more to ensure sustainable food production with less reliance on expensive, imported fertiliser.

Sustainable agricultural support

Carbon capturing supply chains For the first time COP agreed a position on phasing down unabated coal power.

Coal still forms a significant proportion of our global energy mix, fuelling many goods and services on a global scale.

Therefore, this commitment is a step to delivering carbon capturing supply chains.

The UK Government has provided further information on the Environmental Land management Schemes (ELmS) to replace the Basic Payment Scheme in England. These provide a step in the right direction for delivering environmental objectives, however we await details on schemes for the devolved nations.

The UK Government has also progressed the Longer Duration Energy Storage Demonstration (LODES), to incentivise and accelerate the process of commercialisation of innovative, longer-term energy storage projects (such as hydrogen) which could help deliver greener supply chains. This is especially important to bridge the storage gap between renewables such as wind and solar and the grid.

Practical legislation We await further information from the Scottish Government on legislation such as minimum Energy Efficiency Standards in Scotland. With the built environment accounting for 39% of all emissions this will be a significant part of achieving climate change objectives.

Summary Was COP 26 a success? On one reckoning, yes, as it achieved its main objective of keeping global warming to 1.5% within reach.

Sustainable diets Events in Ukraine and consequent sanctions have emphasised the fragility of global supply chains, particularly in relation to food. At the time of writing

When the UK took on the COP mantle two years ago, approximately 30% of the world was covered by net zero targets. So while we still have a long way to go to keep temperature increases below 1.5%, we now have 90%

of the world covered. In spite of these advances we’re still tracking temperature rises above 1.5%.

Therefore, even – or especially – in a suddenly much less certain world, we must redouble our efforts to lower emissions by: • targeting the biggest wins such as building and construction • boosting r&D in emission-fighting technologies and practices • incentivising energy efficiency, the unsung hero of net zero, and • all of us, at every level, using less energy.

crawford.mackay@galbraithgroup.com 07909 978641

galbraithgroup.com | Energy Matters | Summer 2022 | Page 19

The beauty of biomass Head of Forestry for Galbraith Athole McKillop considers the place of biomass in a decarbonised economy – and the other merits of a natural source of energy.

The debate around biomass and its contribution to a low-carbon economy generates so much heat that it might be argued there is no need to burn any biomass.

Views are often strongly held and polarized but, in recognising the valuable role of biomass in contributing to the decarbonised economy target of 2050, the UK Government, despite all the recent distractions, set out a high-level Biomass Policy Statement in November 2021, with an intention to publish a Biomass Strategy in 2022.

The Biomass Policy Statement sets out a UK position, but there is a focus on England with recognition that devolved administrations have their own policies to help deliver the overall UK targets, including the more challenging 2045 target in Scotland.

Governments generally accept that biomass has an important role to play in moving away from fossil fuels to deliver net zero. It is the largest source of renewable energy in the UK after wind, and it provided 12% of our electricity in 2020.

However, it is also recognised that the use of biomass, to be effective, must adhere to some key principles including; compliance with sustainability criteria, consideration of feedstock availability, lifecycle greenhouse gas emissions, cost benefits and a move towards biomass use with carbon utilisation and storage, where feasible, and otherwise in sectors with limited or no low-carbon alternatives.

We have been burning biomass in the UK to

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provide energy for millennia. Some 15,000 years ago the UK resembled Greenland and in the subsequent peak of the re-warming, about 8,000 years ago, the moors of north England and the deep glens of the Highlands were bathed in forests of alder, birch, oak and pine. Even the Outer Hebrides would have had a fair covering of thickets of hazel, rowan and birch - all a source of shelter, food and firewood.

About 7,000 years ago the climate changed again. Higher rainfall brought waterlogging, minerals leached out and soils became more acidic. The combination of waterlogging and acidification ultimately produced an environment which resisted the breakdown of vegetation, allowing peat formation to begin. Several thousand years later, with reducing woodland and fuelwood, we turned, where available, to peat.

Irish records suggest that peat cutting for fuel began in the 1600s, with the first commercial harvesting in 1825.

However, between early woody biomass uses and burning of long-term stored carbon we had already turned to fossil fuels. The earliest records of coal burning go back to 3,490BC in China with UK records of coal being used as a fuel in roman Britain around 410AD. Further records of coal use are limited until the 12th century although, like Ireland, it was not until the reduction in woodland stocks in the 16th century that a move away from biomass as the main heat source to coal and peat began.

Sadly, our forebears did not wisely and sustainably manage their woodlands. The management and exploitation of their natural capital and ecosystem services were out of

“

Governments generally accept that biomass has an important role to play in moving away from fossil fuels to deliver net zero.

balance with their growing energy and food demands. I am not suggesting that, had they deployed better management skills, the current crisis would have been averted - far from it. The industrial revolution was inevitable, but what is clear is that to justify the use of biomass as an energy source, management of biomass crops and truly sustainable management must go hand in hand.

Whether we are looking simply to produce heat, to produce heat and steam to power generators, to turn biomass into other fuels such as bioethanol or methane, all these processes have a net carbon dioxide output. We cannot shy away from that fact. Technology may develop to allow efficient CO2 capture and storage but, until then, we need to balance up the advantages and disadvantages of its use and look carefully at carbon budgets and cost benefits – not just financial but also wider factors impacting on our environment and society.

I am first and foremost a forester; I grow trees. I understand some of them and occasionally I talk to them. But I talk about them a lot. They are tremendous organisms whether individually or as crowd. As they grow, they take in CO2 and turn it into a carbon store of lignin and cellulose, amongst other things. When we chop them down we find wood suitable for many uses: building, packaging, fencing, and some for burning. The burning does indeed return that stored carbon quickly to the atmosphere as CO2. Good or bad?

Neither. It is repeatable and sustainable, indeed a regenerative a cycle occurs; it is neutral if carefully managed.

It went along the lines of: If you are lucky to have a big enough garden you may plant a tree. If you are even luckier you may plant another every year for 30 years.

Over those 30 years a good store of carbon is developed. You can then chop down the first tree, in the spring so that it has all summer to season. Come autumn, you have a store of fuel to heat your home all through winter. But last spring, after you cut the tree down, you planted a replacement and it and the other 29 have continued to grow and store more carbon. By the time those chilly autumn evenings come along you have already stored up enough carbon to balance that which you burn over the winter. And from then on you can continue to warm your heart and heat your home from the carbon you have stored up the year before.

There are many other forms of biomass, but a woodland is special. As well cutting trees for fuel we mill good straight trees to use in low carbon building projects; they give a farmer a way to diversify his business, shelter his stock and provide huge potential to enhance biodiversity – don’t forget we do not just have a climate crisis, we have a biodiversity crisis too.

And if the thought of all these emergencies makes you stressed, your doctor may well prescribe a walk in a wood.

There are much wider and deeper arguments for and against the role of biomass as an energy source in moving towards a low-carbon economy, but a really important message is that we must understand and manage our resources carefully, ensure we can replenish what we use and be able to measure the ebbs and flows.

athole.mckillop@galbraithgroup.com 07718 523045

I like the simple analogy matthew rivers made a few years ago in his role at Drax, often challenged over the reality of global shipping and burning tens of thousands of tonnes of wood pellets every week.

galbraithgroup.com | Energy Matters | Summer 2022 | Page 21

Cold comfort: Move to ban wood-burners gets a frosty reception Biomass – green or brown energy? Highland villagers face a chilly future, reports Calum Innes.

Forty years ago this month the village of Braemar, in the middle of what is now the Cairngorm National Park, experienced a record temperature of minus 27.2˚C. While the effects of climate change are influencing our weather, this Highland parish continues to experience arctic conditions with a temperature of minus 23C last year. Unsurprisingly inhabitants keep a close eye on the weather forecast.

When storm Arwen blew across the UK in late November leaving significant damage in its wake, Braemar was without electricity for several days. A resilient community, the villagers huddled in front of traditional wood stoves and open fires while they waited for reconnection by the utility company.

A small proportion of the residents who occupy housing owned by Aberdeenshire Council have now received notice from the local authority of plans to remove fireplaces from these homes as part of the council’s strategy to meet statutory and regulatory energy efficiency standards for social housing.

Understandably, this news is not being seen as

Braemar’s single wood pole electricity line has been proven to lack resilience.

a positive move by residents, who consider being wholly reliant on electric heating to be a disadvantage in a remote community, subject to chilling temperatures and at the end of a single wood pole electricity line which has been proven to lack resilience, as well as being subject to big price rises.

The scenario described above illustrates the challenges of our transition to net zero and the potential impact on individuals resulting from well-meaning policy decisions having unintended consequences.

Of course, biomass energy – derived from burning wood or other plantderived materials – is seen as a means of reducing greenhouse gas emissions. The CO2 released to the atmosphere is considered to be largely balanced by the CO2 captured in the fuel’s own growth rather than the release of CO2 from fossil fuels which was captured by

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The villagers huddled in front of traditional wood stoves and open fires while they waited for reconnection by the utility company.

photosynthesis millions of years ago and is essentially ‘new’ greenhouse gas.

Large-scale biomass energy plants have been developed in recent years to produce heat and generate electricity.

For example, Galbraith was involved relatively recently with the University of St Andrews’s innovative district heating system, fuelled by biomass developed as part of the institution’s strategy to reduce reliance on fossil fuels.

There is a conundrum here: in some cases burning wood is seen as having a positive impact on climate change but in others a negative. Of course, there is no simple answer as the interactions are complex, but the move to reliance on electricity derived from renewable sources requires the distribution network to be resilient as its failure is a chilly prospect.

calum.innes@galbraithgroup.com

07909 978643

Page 22 | Energy Matters | Summer 2022 | galbraithgroup.com

AD tie-up with dry ice maker highlights innovation in net-zero carbon push Poppy Baggott explains how a green energy plant boosts the food and pharmaceutical sectors.

I can’t be alone in having reservations as to the solid clean green credentials of anaerobic digestion (‘AD’).

As a sustainable source of energy, AD has many merits, providing renewable power and bringing valuable income for those who own and operate them. It also ensures land is kept in top agricultural working order to provide silage and agricultural matter for the ‘concrete cow’ – the purpose-built structure that works like a bovine digestive system to produce methane for fuel and/or digestate slurry for fertiliser production.

The carbon dioxide produced as a by-product is part of the natural cycling of carbon between biomass and the atmosphere, unlike the additional emissions from oil refining or fertiliser production which cause climate change. As the material fed into the process would emit the greenhouse gas whether used this way or not, AD is seen as a net-zero technology.

However, the fact remains that there is still an emission, so I was intrigued and delighted to find ingenuity and innovation at work in the use of AD in the ongoing fight against climate change.

In the course of my work as a land agent in Dumfries and Galloway, I spoke to Stewartrybased beef farmer richard Barbour, who co-owns an AD plant at Crofthead Farm, Haugh of Urr, just outside Castle Douglas. richard and his partner in AD, mark Callander, can produce enough power in the form of ‘green gas’ for around 8,000 houses when the system is working at full capacity. The AD is mainly ‘fed’ not

with slurry or farmyard manure (‘FYm’) but hen and cow dung, producing a nutrient-dense fertiliser as digestate.

But while the anaerobic digester generates renewable power with a quality fertiliser as a byproduct, it still emits CO2. This would normally be released into the atmosphere. However, richard told me that richard Nimmons and his brother Ed, owners of the Perthshire company, Dry Ice Scotland, have devised a method for using waste CO2 from AD to produce food-grade dry ice for use by industries such as pharmaceuticals and food distribution. Dry Ice Scotland is investing around £4m in a new facility at the AD plant site at Haugh of Urr. The principle and innovation involved are inspirational – an advertisement for collaboration and thinking outside the box. Adding to the arrangement’s green credentials, Dry Ice Scotland not only buys and uses the waste CO2, making its own business carbon net-zero, it also purchases power direct from the AD plant.

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This is a major step forward for the UK to be 100% reliable on domestic sources of food-grade CO2.

The AD business runs totally independently from the farming side, with a 21-year lease in place for the site.

Ed Nimmons, in an article published by Daily Business, described the project as a “landmark” in its bid to decarbonise the dry ice industry. His brother richard added: “This is a major step forward for the UK to be 100% reliable on domestic sources of food-grade CO2 for dry ice manufacture, reducing transportation carbon footprint and insulating our customers from future CO2 shortages.”

poppy.baggott@galbraithgroup.com 07557 973220

galbraithgroup.com | Energy Matters | Summer 2022 | Page 23

broadband wayleaves: getting it right Approached by BT Openreach about wayleaves to facilitate broadband? Callum Woods reports on factors to consider.

Extending high-speed broadband to rural areas is a key part of modernising the economy, but it’s important to note the potential disruption involved and look at ways to cope.

Since we last wrote about the £15m Scottish Government-backed reaching 100% (r100) programme, which aims to provide every home and business in Scotland with broadband speeds of at least 30mbps, we have been instructed by a number of clients across the country to act on their behalf and have negotiated favourable wayleave terms to facilitate the works.

Established renewable Crawford Mackay reports on the rapid development of the renewable energy agency and brokerage market.

sums of money to new renewable energy installations.

Renewable energy is central to realising net zero objectives as we seek to decarbonise the global economy.

For installations such as wind turbines or solar farms with a proven income stream, the answer is – very strong. many were constructed with help from government incentives such as the Feed-in-Tariff. FiT is no longer available for new installations, but those that continue to receive it provide very attractive levels of rental income to landlords, with little in the way of maintenance or management costs.

However, during 2019 only 27% of UK energy demand was supplied by renewable energy, so there is still a significant way to go before renewable energy targets can be realised.

This has resulted in both the public and private sectors committing significant

So, apart from new development opportunities, how is the market for existing renewable energy structures with an established track record?

An increasing focus from institutional investors on Environmental and Social Governance (ESG) objectives has seen

As a landowner approached about the installation of apparatus by BT Openreach, the company charged with leading the rollout, you have a right to be represented by a surveyor and have your reasonable fees covered as set out in the Electronic Communications Code.

The standard wayleave form that Openreach prefers to use omits certain clauses with regard to ‘lift and shift’ provisions which you need in place should the apparatus need to be moved in the future, for example due to development. Also excluded are clauses in respect of compensation due to the landowner, such as for any reinstatement works required following the installation. It is imperative to consider practical matters, such as stipulating that apparatus be buried to a minimum depth of 900mm on farmland to avoid interference with normal agricultural operations.

We also recommend meeting Openreach and its contractors morrison Telecom Services on site as small changes like relocating a cabinet further along a hedgerow, or slightly changing a cable route that may reduce interference with your day-today practices. One client used the ducting being installed to facilitate a power cable to a farm steading.

If you are approached by BT Openreach to have apparatus installed on your land, either in regard to the r100 programme or otherwise, please do not hesitate to get in touch.

callum.woods@galbraithgroup.com 07824 142069

Picture: Klaudia Zolkos Urbanek, Pexels

Telecom leases: how to avoid the pitfalls Landowners should beware future pitfalls of Electronic Communications Code agreements, says Mike Reid.

Since the introduction of the new Electronic Communications Code in December 2017 there have been more telecom tribunal cases than there were in the previous 30 years.

While the focus for many landlords is the reduction in income, people shouldn’t lose sight of the longer term implications of a code agreement. Landlords need to ensure they aren’t signing up to terms that ultimately could damage their retained property interests and add significant problems and costs at the end of the agreement.

Future compensation

This is perhaps understandable given that significant changes in the code have led to reduced incomes for landlords hosting sites on their land or buildings.

The code provides various safeguards for landlords but some are only available if an agreement has been imposed by tribunal so, if a consensual agreement is agreed, rights need to be included to ensure the protection by the code.

The Government intends to reform the code with further legislation later this year but unfortunately the whole focus of the review appears to be about granting mobile operators further rights without additional safeguards for landlords.

A good example of this is the landlord’s right to receive compensation for any loss or damage that has been sustained or will be sustained as a result of the exercise of the code rights granted by the lease. This is a code right, but only if the

Page 24 | Energy Matters | Summer 2022 | galbraithgroup.com

energy assets attract investors growing demand for renewable energy investment opportunities. Previously, this may have been viewed as a concessionary or impact investment, but the reality is that attractive commercial yields can be achieved, which are in line with or exceed commercial or residential property investments, with gross initial yields for established renewable energy investments ranging anywhere between 5 and 15%.

Galbraith has been active in this market across the UK, having recently advised a major pension fund on the acquisition of an established 5mW solar farm let to an international solar developer. The investment allowed the client to realise their ESG objectives and provided an attractive level of rental income with a gross initial yield of more than 5%.

agreement is imposed by the tribunal or appropriate terms are agreed in the consensual terms. many operators propose consensual terms which don’t offer any compensation for any loss or damage incurred in future so the landlord won’t be protected and no compensation will be payable should any losses be caused.

Rent reviews Whereas there is focus on the level of the commencing rent under a new lease, attention should also be on the rent review mechanism and frequency.

If there is no provision for the rent to be reviewed or if there is one specific identified date during the lease when the rent can be reviewed, it may be very difficult for the landlord to have the rent reviewed at the end of the lease without, in Scotland, an expensive ‘paragraph 33 application’ to the Scottish Lands Tribunal.

Taking into account the level of rents now paid for telecommunication sites, the cost of such an application is likely to far exceed the benefit of any increased rent making an application uneconomic and not worth progressing.

The level of investment interest in the renewable energy sector means there are opportunities for farmers and landowners, who either directly own an established renewable energy installation or have a lease in place with a developer.

Galbraith was notably involved in the sale of a 500KW turbine in Fife which allowed the landowner to realise a significant capital sum for their interest in the lease.

Selling can mean a valuable income stream is foregone, but it can also allow a landowner to realise a significant capital sum without the need to sell large areas of land. This can often be an attractive proposition that allows borrowing facilities to be reduced or capital raised for a variety of purposes while retaining the core, non-renewable business.

The rent would then continue at a lower than market level for many years.

Misleading code approaches When mobile operators approach a landlord about a new lease or a lease renewal they often give the impression there is very little option but to agree with their proposed terms and conditions when that is not the case.

Every landlord should be able to agree a negotiated consensual agreement rather than have terms imposed upon them by the mobile operators. This misleading approach will lead many people to think that they have no option but to sign up to the proposed terms, which could end up unnecessarily prejudicing their future property rights and interests.

Once a new code agreement is agreed it will be very difficult to terminate and any changes will potentially require an expensive Scottish Lands Tribunal procedure, so any terms agreed now may be in place for many years to come, leaving landlords unprotected by the rights they could access under the code from a properly negotiated consensual agreement.

In summary, the renewable energy agency and brokerage market is evolving at pace and provides investors with an opportunity to acquire a highyielding investment that satisfies ESG criteria, and landowners to realise capital without the need to sell extensive areas of land.

Demand for green energy investment assets is at an all-time high and interest in renewables as an investment opportunity continues to grow.

Galbraith has experience of acting for both purchasers and sellers and can help realise your interest in a renewable energy installation.

For a confidential discussion about Galbraith’s renewable energy agency and brokerage services, please get in touch.

crawford.mackay@galbraithgroup.com 07909 978641

Take advice to protect your rights In times of changing legislation it is always good practice to obtain advice on any new agreement, particularly one that could potentially last in perpetuity due to the protection of code rights.

All the above issues can be agreed in an appropriate way in a consensual agreement to protect the landlord’s property interests, so it is very important to obtain advice on any new code approach.

All the landlord’s reasonable fees should be paid by the mobile operators for negotiating and progressing a consensual agreement. most consensual terms put forward by mobile operators only propose a contribution to the landlord’s professional fees rather than confirming that all the reasonable fees will be paid, again offering no protection to any landlord who doesn’t obtain professional advice from a code specialist.

mike.reid@galbraithgroup.com 07909 978642

galbraithgroup.com | Energy Matters | Summer 2022 | Page 25

Rachel Russell reports on ambitious plans to de-carbonise the trains.

T

Full steam ahead for the electrification of Scotland’s rail network?

Never has there been a greater focus on going electric – whether it’s the switch to electric vehicles, mains-power heating for our homes or the growing interests in electric motorsports.

Transport is Scotland’s biggest greenhouse gas emitting sector, accounting for nearly 36% of emissions in 2018, so the Scottish Government published the rail Services Decarbonisation Action Plan in July 2020.

This sets out ambitious plans to electrify more of the rail network and remove diesel from passenger trains over the next 15 to 25 years.

The Action Plan is considered a fundamental aspect of achieving NetZero by 2045 by removing diesel trains and encouraging travellers to ditch their cars and hit the rails. Holyrood is committed to a substantial rolling programme of electrification that will bring economic, social and environmental benefits, but it is no small task.

Alongside the electrification of the infrastructure, two other green technologies that are likely to be well enough established to make an impact in the future are hydrogen, and batterypowered trains. These are currently expensive and limited in power output and performance, but they are flexible and can be used independently or in conjunction with ‘discontinuous electrification’ – leaving gaps in overhead line equipment where there are non-compliant structures,

instead using on-board energy storage systems to power trains across these gaps.

With some 1,616km of track to be electrified and physical and geographical constraints to navigate, there is light at the end of the tunnel for the Scottish Government’s ambitious target, but the challenge of reaching it cannot be overlooked.

South of the Border, Network rail is partway through the £1.2 billion East Coast Upgrade to improve the power supply to enable faster, quieter and more environmentally friendly electric trains to run. With phase 2 due to modernise the route between Darlington and Edinburgh, completion of the Edinburgh to Aberdeen route will be of paramount importance to Holyrood.

Our surveyors are seeing increased approaches from Network rail and other delivery partners seeking to collect soil samples and ground data from land managers adjacent to the existing rail network. The end goal is clear, but it is important to ensure access and land right terms are agreed to protect the land manager’s position from the outset.

If you’re either a landowner or occupier who has been approached in relation to railway upgrade works, do get in touch with us.

Page 26 | Energy Matters | Summer 2022 | galbraithgroup.com

rachel.russell@galbraithgroup.com 07884 657219

THE PLAN: HOW SCOTLAND’ RAiL NETWORk SHOuLD LOO

RENEWAbLE ENERGY SubSiDiES The Domestic and NonDomestic renewable Heat Incentives are closed to new applicants as of march 31, 2022. If you are already on the scheme, you will receive payments as usual as long as your continue to meet your ongoing obligations.

The Government is still providing financial support to help with the rollout of lowcarbon heat technologies.

Scotland Home Energy Scotland Loan: This is designed to make homes warmer and more comfortable by helping homeowners to install energy saving measures through an interest-free loan funded by the Scottish Government.

’S DECARbONiSED Ok iN 2035 kEY Electrified network 1,616 km (single track km) to be electrified.

Sections of route could potentially include discontinuous electrification.

Electrification of some freight-only lines may be subject to review.

Alternative traction - transition solution, e.g. partial electrification and/or the use of alternative technology prior to electrification.

Alternative traction - permanent solution, i.e. the use of battery or alternative traction.

Each household can apply for up to two home renewables systems per home up to £17,500, plus an energy storage system up to a maximum of £6,000.

The maximum loan amounts are as follows: • Wind or hydro turbines: £2,500 • Solar photovoltaic (PV): £5,000 • Solar water heating systems: £5,000 (£1,250 loan plus up to £3,750 cashback) • Energy storage systems (heat or electric batteries): £6,000 • Hybrid PV-solar water heating systems: £7,500 • Heat pumps (either air source to water, ground source to water, water source to water or hybrid air

source to water): £10,000 (£2,500 loan plus up to £7,500 cashback) • Heat meter (if installed alongside a heat pump): up to £500 cashback • Biomass boilers or stoves (non-automated, non-pellet stoves or room heaters are not eligible): £10,000 (£2,500 loan plus up to £7,500 cashback) • Connections to a renewably powered district heating scheme: £5,000 (£1,250 loan plus up to £3,750 cashback) Source: www.homeenergyscotland.org /find-funding-grants-andloans/interest-free-loans/overv iew/

England The Boiler Upgrade Scheme: The Boiler Upgrade Scheme (BUS) is a UK Government initiative to encourage more people in England and Wales to install low carbon heating systems.

The BUS covers three low carbon heating systems: • Air Source Heat Pump: £5,000 off cost and installation • Biomass Boiler: £5,000 off cost and installation for properties in rural location and properties not connected to the gas grid • Ground Source Heat Pump: £6,000 off cost and installation Source: https://energysavingtrust.org.u k/grants-and-loans/boilerupgrade-scheme/

The map shows the rail network in Scotland; as there are no rail lines on the islands they are not shown.

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GALbRAiTH’S ENERGY TEAM combines years of unrivalled skill in all property aspects of energy, utility and infrastructure. On the move and from our 13 offices across Scotland and the North of England, we bring wide experience of renewable energy technologies and associated services. We’re with you, no matter what the circumstances.

OuR EXPERTS battery Storage mike reid, richard Higgins biomass mike reid buying, Selling & Due Diligence Calum Innes, mike reid Carbon Capture & investment Heather Coyle, Eleanor Harris, Athole mcKillop Compensation Claims richard Higgins, mike reid, rachel russell, Oliver Vincent Compulsory Purchase Schemes (all infrastructure) richard Higgins, mike reid, Colin Stewart feasibility Studies (renewables) John Pullen GiS & Mapping Strath Slater, Brogan Cutter Hydro Power Dougal Lindsay, John Pullen infrastructure, utilities & Wayleaves mike reid, rachel russell, Oliver Vincent investment (infrastructure & renewables) Calum Innes, Crawford mackay, mike reid Land Referencing Philippa Orr, rachel russell Minerals Peter Combe Planning Calum Innes, Nicola macGruer Project Management (renewables) John Pullen On-shore Wind Harry Lukas, Crawford mackay, mike reid, Hugo remnant Off-shore Wind richard Higgins Solar mike reid, richard Higgins Telecoms mike reid, Callum Woods Rating Calum Innes Valuation richard Higgins, Calum Innes, mike reid

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CONTACT uS athole.mckillop@galbraithgroup.com 07718 523045

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