The UK Energy Space
The UK government has sent a target of reaching net-zero emissions by 2050. A bold target and one which requires a significant reduction in the use of fossil fuels and a move towards smarter grid network usage. Renewable sources of energy such as wind and solar provide one answer to this transition while also causing their own potential issues.
The move away from fossil fuels and towards smaller, localised generation such as wind and solar means that much of the UK’s grid network struggles to cope with the fluctuations these can bring with uncontrollable weather conditions. These create larger peaks and lower troughs across the UK.
Of course this is also impacted by how we as consumers use this power. A move towards electric vehicles requires homes and businesses to have a greater import of power from the grid network than it was originally designed for.
Historically, large power stations have driven the way we use our power in the UK. These generate large amounts of power and sent it great distances to the end consumer. The implementation of smaller solar and wind has meant that these power stations aren’t relied upon as heavily, although they must still operate in case wind falls, and the stops shining causing a reduction in the production of renewable sources. This battle between balancing renewables and the base load of these fossil fuel consuming power stations has paved the way for new technologies to assist our network.
Battery Storage
Battery Storage technology (or BESS) has of course been around for decades, although it is only within the last decade that the use of battery storage technology at a utility scale level has started to become normal. These sites operate to assist the grid network in levelling out the fluctuations in the grid network and allowing for more localised grid generation and demand.
While wind turbines can operate throughout the day, the wind isn’t always blowing at the peak times of day such as the evenings and mornings when there is a cross over between people getting home and offices / industrial sites still being in use.
The same is true for solar. These of course only produce power during the day, but then not when we are likely to be using it in the evenings or early mornings. Battery storage allows us to continue to generate power and then store this energy for use at later times of the day. This allows localised grid usage rather than relying on larger power stations further afield.
Landowner Benefits
Battery storage sites require land, and more often than not, land close to a substation. This is where landowners need to be aware of the benefits these can bring. Ultimately, developers of these batteries, such as Balance Power, are willing to lease or purchase land for use as a battery storage facility.
A battery storage site has a typical minimum land requirement of 2 acres. This can change depending on the size of the battery and if screening vegetation or similar is required for planning. Rents typically fall around the £75,000/acre per annum mark for battery and £1,000/acre per annum for solar although can go much higher if the cost of the grid connection (I’ll come onto this) are lower. Again, the same is true for purchases. A premium will be paid over and above the market value of rural land for this use. Clearly solar requires more land, typically a minimum of 40 acres unless there is a high-demand consumer nearby such as a cold store, factory or similar that we can connect directly to. Leases vary in length but are typically structured as 20 years with the right to extend for another 20. These provide landowners secure, long term income against an asset that has little to no impact on their operations.
The Process
While finding a site may sound simple, there are a number of hurdles we as the developer have to jump through before the project can be commissioned. The key element is what we refer to as ‘grid’. Put simply, we have to apply for a connection into the local network for our battery or solar project. This is the most important part of the process as it determines how big our battery or solar can be, when we are able to connect it, and most importantly, the cost of doing so which ultimately will determine if the project will work or not. Of all the elements that could ‘kill’ a project, grid has the highest chance of doing.
Once we have identified if there is grid capacity, we then typically look to sign Heads of Terms, before moving into an Option to Lease, and then a lease. We would typically advise an agent, such as Cooper & Tanner, is used during these elements. It is typical Balance Power will provide a fee undertaking to the landowners agent and solicitor during these parts of the process so the landowner isn’t out of pocket.
What should landowners do now?
Interested landowners should contact Cooper and Tanner to discuss areas of land they believe might be suitable. We can then submit grid applications ourselves to understand the grid network and ultimately understand if a project is viable. The grid process is interactive with other parties and so we would encourage any enquiries to be made as soon as possible to lock in any available capacity as it is first come first served. Once the grid application is returned, if positive, we can progress to the latter stages of the development process and start bringing the project through to fruition.