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Energymatters
making renewables work in a world without subsidies
Get ready for the next deluge
major works: Claims for compensation
telecom reform is not all bad news
Wind-farm decommissioning: the clock is ticking
Offshore: the planning rules
When the sun sets on North sea oil and gas
www.ckdgalbraith.co.uk
ISSUE 11 wIntEr 2016
Page 2 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
CKD 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 more than 200 people in offices throughout Scotland.
the firm provides a full range of property consulting services across the commercial, residential, rural and energy sectors.
CKD Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.
Our associate, CKD Kennedy Macpherson, is based in London.
Follow us on twitter: @CKDGEnergy
Like us on Facebook: www.facebook.com/ckdgalbraith
Join us on Linkedin: www.linkedin.com/company/ckd-galbraith
WELCOME
the GlObal Deal worked out in Paris in December unites the world as never before in seeking to limit cli-mate change through the control of carbon emissions. the agreement, committing all countries to cut carbon emissions, is not perfect. Some targets are legally bind-ing but many are voluntary, and there are complaints the deal fails to deliver security to the world’s most vulnerable communities.
But winning over almost 200 countries including China, India and South Africa meant adopting a softer compli-ance regime than Kyoto’s.
the agreement to keep global temperature increase “well below” 2°C, to pursue efforts to limit this to 1.5°C and to review progress every five years is a triumph for Laurent Fabius, President of the Un climate conference of parties (COP) and French Foreign Minister.
Among others entitled to praise are the UK Energy Secre-tary Amber rudd, whose comments following the summit suggest insight based on effective preparation and par-ticipation in negotiations leading up to the deal.
while Ms rudd has taken the axe to renewable energy incentives, she at least ‘gets’ the role of subsidy as a spur to innovation and investment in a growth industry that’s vitally important for Scotland and, as is clear from Paris, the world. this is in contrast to some arch-sceptic ideo-logues in her party.
the final Paris communiqué recognises the benefits of providing incentives for reducing carbon emissions. Ms rudd is committed to ensuring energy bills are kept under control while providing a sensible level of support for low-carbon technologies that provide value for money. She should use her new-found prestige in bargaining to achieve her objectives.
Calum innes, Partner
Paris agreement: Now the work begins
energy matters is produced by Allerton Communications, London, UK, and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
CONTENTS
4Price of progress: Compensation for major projects
Decommissioning: The clock is ticking.
6How subsidy cuts will affect wind-farm rents.
Flooding: It pays to prepare for the worst.
8COver stOry: The end of North Sea oil could bring a bonanza for landowners.
Getting to grips with grid costs.
10Farming the wind update.
11The complexities of marine planning.
12A landowner’s guide to telecom reforms.
The water logging route to savings.
14Scottish Water success.
Rising to the Great Glen Challenge.
the fast-moving renewable energy sector can survive in the post-subsidy climate, says Simon Robinson. But improved efficiency and consultation are crucial for success.
this year’s UK Gov-ernment reductions to renewable energy support mechanisms were not unexpected.
Although the speed and breadth of the cuts raised some eyebrows, the direction of travel was clearly signposted during the 2015 General Election campaign.
Some of the changes made were, however, a little surprising. The removal of the exemption from the Climate Change Levy for renew-able energy projects will reduce the income of operating projects and consequently make it more difficult for debt-financed projects to service their bor-rowing costs.
The decision to exclude community energy projects from Social Investment Tax Relief runs counter to established Conservative themes of community empowerment and decentralisation. We can quibble with these and other changes, but the overall message is clear – large sections of the renewable energy industry can and must survive without subsidies.
So where does this leave the industry? Will we be able to adapt and overcome this challenge or is this the end of renew-able energy in the UK?
This industry is still young. We have been extraordinarily successful in a remarkably short period of time.
When I started advising renewable energy businesses in 2007, the total UK installed capacity was 5.7 GW (1). By June 2015 this had grown to 28.4 GW (2), a fivefold increase in under eight years. The propor-tion of electricity generated from renew-able sources grew from 4.8% (1) in 2007 to 25.3% (2) in the second quarter of 2015. This is one of the UK’s great industrial success stories.
The industry has a proven ability to evolve rapidly in response to market forces and to develop and exploit new technologies. For example, falling equip-ment costs have driven a huge increase in the deployment of solar PV in the last two years; and increased grid-connected renewable energy capacity is now offering
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 3
repower existing projects with more mod-ern and more efficient equipment. And in parallel, the emergence of exciting new growth areas such as energy storage (both domestic and large-scale), integrated solar PV, balancing services, standby genera-tion and active network management will create new opportunities that we could hardly have imagined back in 2007.
Building subsidy-free renewable energy projects in the UK is difficult but it is not impossible if the industry pulls together and shares expertise. Subsidy-free renew-able energy is a glittering prize and one that is well worth fighting for.
1 Digest of UK Energy Statistics 2012, Department of Energy and Climate Change.
2 Energy trends September 2015, Department of Energy and Climate Change.
landowners new opportu-nities in areas such as grid con-nected storage and standby power. The industry is incredibly efficient at identifying opportunities and solving problems, and in the proc-ess creating new markets.
There is doubtless a future for renewable energy post-subsidy – but early collabora-tion between parties involved in projects will be crucial.
Partnerships between landowners and developers will help to identify the most promising sites. Early engagement with local communities will address their concerns and ensure a project’s intangible
as well as more direct benefits are tailored
to specific community needs.
The involvement of several technology
Simon Robinson is the founder of Snell Bridge, the Edinburgh-based corporate finance advisory business spe-cialising in renewable energy. He is a trustee and board member of the Neilston Devel-opment Trust and Finance Associate of Scene Consulting, a specialist community energy adviser.
[email protected] 667 0616
stOP PressThe Scottish Government is to slash incentives for businesses to invest in renewable energy. Business rate relief will be lim-ited to schemes incorporating community ownership.
“The Scottish Government proposes to reform renewable energy relief from 1 April 2016,” says Local Government Finance Circular No. 7/2015. “Relief is proposed to be limited to schemes incorporating commu-nity ownership. Further detail of the revised relief will be con-firmed shortly.”
At present renewable energy schemes in Scotland benefit from 100% relief from business rates for subjects with a rateable value up to £145,000 with a slid-
ing scale of relief granted for larger subjects.
The UK Government has responded to the Feed-in Tariff consultation and the tariffs on
offer in some cases have been reduced considerably which will further impact
on investment decisions.
Updated tables feature on page 11.
a world without
subsidies
By approaching projEcts in morE thoughtful and collaBorativE ways wE will BE aBlE to continuE to grow uK rEnEwaBlE EnErgy gEnEration capacity.
“
suppliers at the design stage will ensure sites are optimised from the outset for maximum generation and minimum local impact. Project finances should be analysed before the planning application is finalised so that early discussion with funders and the potential for innovative power sale arrangements can inform the project design process. This will ensure that the fundraising process is as smooth as possible.
Discussions with developers of neigh-bouring sites can lead to cost savings in areas such as grid connections, road con-struction and transport costs. Engagement with local authorities from the outset will help facilitate the planning process.
By approaching projects in more thought-ful and collaborative ways we will be able to continue to grow UK renewable energy generation capacity.
In addition to new projects, there will be a growing number of opportunities to
Page 4 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
amiD all the talK of investment in infrastructure to secure our future – and much of it remains talk – it is important to bear in
mind that large projects often mean large-scale disruption.
While Government, investors, contractors and advisers have over the years got better at minimising disturbance to property and the natural environment, few big projects worthy of the name are implemented without causing some problems for land owners.
I am involved in a number of projects where I have been instructed either by the owner/occupier or by the acquiring authorities. Experience of having acted for both sides gives an understanding of the frustrations each has during major works.
In evaluating compensation for properties affected by large infrastructure
projects, it is important first to consider the following:
• Both private and publicly accountable corporations have from time to time to put into place infrastructure that requires land for roads, flood prevention schemes and the use of land to convey water, gas, oil, electricity, and information.
• Major infrastructure projects which are being built for the benefit of the many tend to impact on the few.
• The principle of equivalence is the cornerstone of all compensation. In
other words, the owner/occupier should be in the same position after the acquisition work as before, in terms of monetary value.
Securing land to accommodate the various projects differs due to statutory powers available to each acquiring authority through the various Acts.
Scenarios can range, for example, from Scottish Water not requiring to compulsorily or voluntarily purchase ground, not putting in place wayleaves or deed of servitudes when placing water and sewer pipes over land through to Transport Scotland applying to the Scottish Ministers to compulsorily purchase land for new roads.
In between are the various utility and development companies who enter into either a wayleave or a deed of servitude with the owner/occupier. Flood prevention schemes have statutory
Paying the right price for developmentBig projects don’t come without inconvenience. Lawson Doe reports on some of the factors to bear in mind when considering a compensation claim.
l Preparation for subsea cabling from Kintyre to Hunterston Power Station.
thE principlE of EquivalEncE is thE cornErstonE of all compEnsation. in othEr words, thE ownEr/occupiEr should BE in thE samE position aftEr thE acquisition worK as BEforE, in tErms of monEtary valuE.
“
PlaNNiNG PermissiON for a wind farm development is typically granted for a period of 25 years with an obligation
for the infrastructure to be removed and the site reinstated before expiry of the consent.
The lease and Section 75 Agreement generally provide for a bond to be put in place by the developer to provide assurance that sufficient funds will be available to pay for decommissioning. This is to protect the landowner should the operator be unable to fulfil his obligations.
Wind farms have proliferated and no doubt in the future many will be the subject of applications to repower to extend their lives. But planning permission for this is by no means assured, so it is important to take decommissioning obligations seriously.
Most leases provide for a bond or similar mechanism to be put in place and for the sum to be reviewed periodically to ensure there’s enough to meet reinstatement obligations, and it is important that such reviews are not overlooked.
CKD Galbraith has advised in a number of cases, either instructed by the landowner or appointed as independent experts where parties are unable to agree and recourse is made to the Royal Institution of Chartered Surveyors under dispute resolution provisions in an agreement.
The starting point is almost always determining the infrastructure to be removed or remediated, taking into account any predetermined specifications. This is likely to include the restoration of tracks, hard surfaces
and machinery areas together with the removal of the turbine structures, substations, control buildings, cables and other infrastructure.
A clear understanding of the lease obligations together with any third party rights is critical in assessing a landowner’s position should they have to rely on bonding provisions.
For example, while wind turbine structures have some value either as scrap or potential re-use, it must be determined if the landowner has recourse to such assets.
In almost all the cases we’ve seen, current provisions are unlikely to be adequate to meet decommissioning obligations – largely because initial bonding provisions are calculated too generally, without detailed consideration of the precise circumstances.
Leases generally provide for the costs of reviewing bonding arrangements to be met by the wind farm operator so the landlord is largely indemnified.
We encourage landowners to review their leases and ensure that no opportunity to review relevant provisions is missed. Many landowners suffered after the collapse of Scottish Coal because bonding arrangements were woefully inadequate to meet the restoration
obligations that landed on them.
Calum Innes, based in Perth, is head of CKD’s energy team.
[email protected] 01738 456 075
Decommissioning: it’s closer than you thinkthe end of life of a wind farm may seem far off, but all sides should tread cautiously, says Calum Innes, because time flies – and decommissioning obligations can be onerous.
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 5
powers which allow the council to take land without purchasing it by compulsory means.
Where land (or new rights over land) is acquired then there are four main heads of claim:
Value of land taken: Valuing the land is understanding the market value of the land on the open market, assuming a willing seller and willing buyer and taking into consideration other factors such as development, marriage and ransom values.
Severance and injurious affection: Severance occurs when the land acquired contributes to the value of the land retained. Injurious affection is the depreciation in value of the retained land.
Disturbance: This is only available to the occupier of the property, that is to say the owner/occupier. Disturbance represents the costs incurred and losses sustained as a result of being disturbed from the occupation of the property.
Fees: Solicitor’s and surveyor’s fees are reimbursed by the acquiring authority.
I suggest this approach in respect for either party:
• Ensure a written instruction is in place.
• Minute all meetings.
• Understand your client’s expectations.
• Use the principle of equivalence for any compensation claim.
• Take a record of conditions, before and after.
• Insist a diary is kept by the owner/occupier.
• Try to avoid traffic close to houses and steadings.
Lawson Doe is a land agent in the Perth office of CKD
Galbraith.
[email protected] 01738 448141
Storms Desmond and Frank and their aftermath once again underline the importance of thorough risk evaluation and flood prevention, says Harry Lukas.
PrOPerty OWNers have had a wake-up call in the form of this winter’s unprec-edented storms, which brought more than a foot of
rainfall to the worst-hit places.
Among the areas affected were south-ern Scotland, Aberdeenshire, parts of Northern Ireland, north Wales and espe-cially north-west England.
Floods are usually caused by heavy rainfall and water courses of all types being unable to cope, with debris caus-ing blockages and erosion diverting normal flows.
There is much property owners can do to mitigate the effects of flooding by assessing the risks and keeping up with maintenance.
Low-lying and poorly drained land and the buildings on it may be more prone to extreme weather events, and it’s in these places that the problems are most obvious. There are however many properties that up to now have not been affected but where just a little more water might tip the balance and cause lasting damage.
A quick assessment of how water runs around a property, whether a building or land, will give pointers as to where potential problems lie. Simple actions
l Taming the Tweed: Three views of the River Tweed at the B712 cross-ing... during the New Year 2014 flooding, on December 12, 2015, when the river rose dra-matically, but new defence works saved the road, and on December 30, after Storm Frank broke through the defences.
Page 6 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
the slashing of renewable energy incentives is bound to affect wind farm rents. Michael Fletcher explores how the new reality will play out.
aNalysis by CKD Galbraith shows that wind farm rental levels in Scotland have been broadly unchanged since May
2013, when our research showed a rise of 20 per cent on the previous 12 months.
The stability in ‘base’ and turnover rent (i.e. percentage of revenue) over the past two years indicates a maturing market, with developers focusing on their forward project pipelines. This steadier environ-ment contrasts with the 10 years to 2012 during which rentals increased by some 320 per cent.
But what does the future look like? Sub-sidy reductions announced by the UK Government are not expected to impact on most schemes that meet the key criteria set out by the Energy Secretary Amber Rudd on eligibility and grace periods under the Renewables Obligation (RO) to 2017. However, the outlook is challenging.
First, onshore wind is seen as a no-subsidy industry from 2017, and with wind farms typically taking five to seven years from conception to completion, several develop-ers will miss the RO deadline.
The impact of Ms Rudd’s announcements have yet to be fully realised, but it’s clear developers’ profits will be squeezed. We expect greater focus on capital spending, with significant reduction in turbine and grid connection costs needed to maintain a viable onshore wind market in Scotland.
Second, in June 2014 the planning frame-work for potential for wind farm sites became significantly less favourable when 19.5% of Scotland was classified as Wild Lands by the Scottish Government. While the designation of wild lands does not prevent development, wind farms must “demonstrate that any significant effects on the qualities of these areas can be substantially overcome by siting, design or other mitigation”.
Developers are therefore faced with reduced returns coupled with increased
planning risk, while development pres-sure on suitable sites intensifies.
How are landowners reacting? They’re showing greater caution as they seek to maximise financial return. They’re also limiting exposure to planning consent conditions, protecting their assets physi-cally and taking tax advice before entering into agreements.
Most seek to minimise outlay while ensuring the smooth running of their wind farm throughout the lease term. Meanwhile, the developers they work with remain keen to progress productive sites while ensuring the terms agreed are acceptable to their funders.
Income from wind farms post-2017 is likely to decrease for landowners. His-torically they received the higher of a minimum rent or turnover rent. The sub-sidy cuts will reduce wind farm income, directly affecting rental payments. The removal of incentives to a wind farm site will prompt some developers to renegoti-ate rent paid to landowners to maintain the viability of sites that do not qualify for RO.
To succeed post-2017, landowners faced with this situation require a clear under-standing of the commercial realities com-bined with an accurate, up-to-date view of the value of their property.
Codes of practice for sporting rights, heather burning and habitat manage-ment are now commonplace in wind farm leases. CKD Galbraith is seeing more focus by landowners, developers and planners on the reinstatement clauses attributable to wind farms, in particu-lar the reinstatement bond value. CKD Galbraith has recently been instructed on a number of schemes to calculate the reinstatement provisions required for the decommissioning of a wind-farm site.
We are also seeing a rise in developers looking at repowering existing wind farms, a tactic with its own challenges. Operating fewer and larger turbines on a site where the infrastructure is already in place is a persuasive alternative to taking
on the planning risk involved in an all-new project.
Michael Fletcher is an energy specialist in the Stirling office of
CKD Galbraith.
[email protected] 434 636
Which way rents as subsidies are cut?
2014
after the storm... time to prepare for the next one
such as cleaning ditches, drains and gut-ters regularly will help, but seeing where water could divert or run off may also highlight opportunities to take preventa-tive measures before the worst occurs. CKD Galbraith can assist with arranging risk assessments.
As an example, farmers and local authorities linked up to prevent high-risk flooding on a small section of the upper Tweed at the village of Drumelzier, which was regularly cut off and some houses put at risk when the river rose above a certain level.
The works involved two bunds – built-up flood banks – one where river ero-sion directs high water into a field so the run-off crosses the road at up to five feet
in depth, and the other protecting the low-lying roadway. The field between is still allowed to flood but without the signifi-cant effect on the road and community. Storm Desmond was the project’s first test and it passed with flying colours. Frank produced new record levels and proved too strong for the bunds.
Where villages and towns are affected, barriers tend to be more easily over-whelmed, so flood water needs to be managed in a way that can restrict or divert the amount of water trying to pass through a narrow exit.
This work becomes highly technical and expensive and responsibility lies with local and national government. Still, any property owner must take stock and see
what mitigation might reasonably be applied in respect of their own property.
In almost all cases, the costs of reinstate-ment and recovery of lost or damaged property together with the time taken in coping with the problems far outweigh the process of minor prevention works.
That said, the Desmond and Frank del-uges were far in excess of any records, and so we must adjust our view of the worst-case scenario.
Harry Lukas is a consultant at CKD Galbraith’s Galashiels office.
[email protected] 01896 754 842
aFter DesmOND aFter FraNK
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 7
the NOrth sea oil industry has an ageing asset base. The first field went into production back in 1967, and peak output was achieved between 1984 and 1993.
The average age of an installation is 25 years, so as North Sea production declines over the next 30 years, almost all the estimated 430 offshore struc-tures will be surplus to requirements or come to the end of their economic life and will need to be broken up.
While some substructures can remain, subject to special approval, the majority of installations will have to be removed to address potential concerns such as environmental pollution and shipping safety.
The decommissioning rate is difficult to predict, and locations equipped to undertake the work are limited in the UK, and Scotland in particular.
Site suitability depends on the size of installation to be decommissioned. Currently across the UK, Scandinavia and Northern Europe, there are six established facilities in proximity to North Sea infrastructure, totalling some 90 hectares.
Many more facilities are thought to be poten-tially suitable for decommissioning work – some having been upgraded to support the offshore wind market. In Scotland, the yards at Nigg on the Cromarty Firth and Kishorn on the West Coast are considered suitable.
Nigg has experience of refitting installations and
When the North sea’s oil and gas are gone...
thE forthcoming activity could signify a Bonanza for nEarBy suppliErs as wEll as for associatEd opErators sEEKing additional spacE.
“Picture: Peterhead Port Authority.
l Dundee, above, Peterhead, below, and Nigg, bottom, are among the Scottish ports considered suitable to undertake North Sea oil decommissioning work.
Picture ©dgordonphotography.co.uk
north Sea decommissioning means opportunities for some landowners. Harry Stott reports.
Page 8 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
GiveN the ChalleNGes facing the renewables market, onshore wind developers are actively looking to reduce their financial burden. While construction and turbine procurement costs are expected to reduce
significantly over time, these alone are unlikely to safeguard the future of the industry for projects not currently eligible for incentives under the Renewables Obligation – a key support mechanism for electricity projects.
Historically, grid costs – those involved in linking a turbine to a substation so electricity can pass into the distribution network – have been accepted as fact by developers.
Many grid connections for renewable assets have gone the generally more expensive underground cable route to reduce visual impact and limit planning risk, as underground cables are likely to be deemed ‘permitted developments’ under the key Town and Country Planning Act.
Traditionally, developers sought to enter into grid connection agreements that required the distribution network operator (DNO) to obtain all necessary consents and fully install the grid connection. But it doesn’t have to be that way. One likely outcome of today’s financially more constrained climate for renewables will be developers seeking cost reductions by managing elements of the grid connection themselves.
Competition in electricity grid connections, introduced by the Office of Electricity Regulation, the precursor to the energy regulator Ofgem, enabled developers to seek competitive quotations from registered independent connection providers (ICPs) for ‘contestable’ parts of grid connection works – those potentially subject to competitive bidding.
Broadly, contestable elements of grid connection works are from generation site to the point of connection (POC) and include:• Project management of connection,• Design of grid connection to POC,• Cable trenching and overhead line works,• Substation building and civil works and• Procurement of cables, transformers and switchgear.
While every grid connection will be different, ICPs can often reduce costs and bring forward grid connection timescales to benefit a renewable-energy development.
For the short term many developers are focusing on projects that fall within the RO banding. Those actively looking ahead are
examining ways to be more creative and push the grid boundaries in terms of cost, timing and distances
that they can travel to connect their projects.
In my view it’s important they form strong links with ICPs so all this can be delivered.
Incentives are shrinking fast, so developers are reviewing grid connections to maximise return, says Michael Fletcher.
Michael Fletcher is an energy specialist in the Stirling office
of CKD Galbraith.
[email protected] 434 636
Getting to grips with the cost of grid connection
Kishorn was involved in the construction of oil rigs in the 1970s and 1980s. Dundee, Peterhead and ports in the Firth of Forth are considered suit-able depending on the size of installation. Forth Ports, which operates Dundee Port, is gearing up to meet future demand for decommissioning.
So, what are the land-based requirements and considerations for decommissioning?
The average “topside” weight of a North Sea installation is in the order of 4,000 tonnes. The typical characteristics of a decommissioning yard to process this size of installation would include:
• Sufficient draught to allow access for removal vessels,
• Adequate open working space in the order of 2 hectares to allow for the topside structure,
• Quayside capacity with capability for heavy lift-ing, trailing topside and substructures,
• Dry dock facilities,
• Proximity to the installations being considered for decommissioning.
The forthcoming activity could signify a bonanza for nearby suppliers as well as for associated operators seeking additional space.
Expect to see demand for recycling, waste segregation and transfer facilities, yard areas for the set-down of materials and structures, office accommodation for decommissioning operators and industrial units for associated businesses and sub-contractors. These opportunities will require careful consideration when agreeing lease and sales terms.
Also in the pipeline are benefits to the wider economy as the rate of decommissioning increases. Oil and Gas UK’s Economic Report of 2013 predicts expenditure between £35bn and £50bn on decommissioning. So, as North Sea oil and gas run out, significant economic opportunities remain.
When the North sea’s oil and gas are gone...
Picture: Peterhead Port Authority.
l Dundee, above, Peterhead, below, and Nigg, bottom, are among the Scottish ports considered suitable to undertake North Sea oil decommissioning work.
Picture ©dgordonphotography.co.uk
north Sea decommissioning means opportunities for some landowners. Harry Stott reports.
Harry Stott is a commercial property agent in CKD Galbraith’s Perth office.
[email protected] 01738 456 065
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 9
Page 10 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
iN PreviOus issues of Energy Matters we looked at a 500kW, farm-based wind turbine develop-ment in Fife, leased to a developer rather than directly funded by the
farming business.
When we last reviewed the project in June 2014, the turbine had just been commis-sioned – two days before the Feed-in Tariff pre-accreditation deadline. Now, 18 months on, let’s examine how the turbine has performed against expectations and what it’s like to live near.
Power productionSome initial teething problems meant initial turbine availability – the amount of time the installation was able to produce electricity over a certain period – was 93.7%. In 2015 this increased to 98.7% and turbine performance was at a 35% cap-
in thE 2015 calEndar yEar thE turBinE producEd Enough ElEctricity for 496 avEragE homEs.
acity factor – average power generated divided by the rated peak power – and thus in line with expectations.
In the 2015 calendar year the turbine produced 1,536,400 kWhr of electric-ity, enough for 496 average homes(1) and saving 668 tonnes of carbon emissions(2) – widely considered a major contributor to climate change.
NoiseLiving only 650 metres from the turbine, for me one concern was the noise impact.
At most wind speeds the turbine isn’t audible, other than at low wind speeds when we can hear the turbine, but very much as background noise. We cannot hear the turbine from inside and noise hasn’t been any problem for us.
Wind protection zone The area within 200 metres of the turbine is a wind protection zone – a parcel of land where development is restricted so as not to interfere with airflow. This hasn’t affected our normal cropping rotation and we farm up to the edge of the access track and turbine base.
Careful prior-to-construction planning to ensure adequate drainage has proved beneficial, with no adverse effect on the crops in the vicinity of the turbine or access track.
AccessThe turbine manufacturer EWT monitors the turbine remotely and can resolve many issues off-site. Engineers have 24-hour access but any problems have been avoided by close liaison
between the parties, ensuring a good working relationship.
Project viability The December 2015 Paris climate change agreement set new targets for combating global warming but the Government’s cuts to the Feed-in Tariff has curtailed 500kW turbine developments. In future renewables will need to provide a reliable source of clean energy at a competitive price, which will require ongoing invest-ment and advances in technology. Drastic cuts in FiT support, such as we have seen for smaller turbines, are not conducive to achieving these longer term objectives.
1 Ofgem formula.2 DEFrA environmental reporting guidelines, A pril 2008.
life with a wind turbine
FarmiNG the WiND Mike Reid reports on the first 18 months of operation of the turbine on his family’s farm.
l Above: The turbine performed at 35% of capacity – in line with expectations. l Below: A digital read-out enables close monitoring of turbine performance.
Mike Reid heads up CKD Galbraith’s utilities department with particular expertise in telecoms and windfarms.
He is based in Cupar.
[email protected] 659 984
“
the seas arOuND Scotland are increasingly the focus of a variety of development pro-posals, not least for renewable energy projects.
The responsibility for regulating such developments falls on Marine Scotland and other offshore planning regimes. This is a process separate from, but inevitably linked to, the land-based planning system. But how do the two systems interrelate?
Terrestrial planning has responsibility for all development taking place on land down to the Mean Low Water Spring tide mark, (with the exception of aquacul-ture developments, for which terrestrial planning jurisdiction extends to 12 miles offshore). In contrast, developments in the sea up to Mean High Water Springs are subject to marine planning rules.
There is therefore an intertidal zone where marine and terrestrial planning overlaps. Furthermore, in many cases offshore developments require an onshore ele-ment, for example substations for energy projects or shoreside facilities for aqua-culture. Naturally, there is significant crossover between the two systems.
The mechanism for marine planning within Scotland is entirely separate from the terrestrial planning set-up. However the two systems have similarities. The National Marine Plan is the overarching policy document, guiding major devel-opments to the most appropriate areas
– in much the same way as the National Planning Framework operates in the terrestrial environment.
In addition, regional marine plans are being prepared, mirroring terrestrial strategic and local development plans. Alongside these regional marine plans, a sectoral plan is being drawn up to guide the location of offshore renewable energy developments.
Differences emerge though in terms of the decision making process. While terrestrial planning decisions are generally taken at a local level by a planning authority, for marine licences a central body – Marine Scotland – handles applications.
For developments over 1mW up to 12 miles offshore, or over 50mW beyond this, a Section 36 application is required
and this is processed by the Scottish Government’s Energy Consents Unit. A streamlined process is in place so both marine licence and Section 36 consent are considered together by the Government. Similarly, where a Section 36 consent is granted, deemed planning consent is received for any onshore elements.
For many offshore developments there-fore, the procedure is relatively complex, possibly requiring marine licensing, Section 36 consent and deemed planning consent for onshore elements. An under-standing of how these various consenting regimes work together is therefore essen-
tial in order to proceed efficiently.
renewable-energy developers are increasingly looking out to sea, but how do planning considerations compare with land-based projects? asks Robert Patrick.
the complex world of marine planning rules
Robert Patrick is a chartered planner in CKD Galbraith’s
Perth [email protected] 456 078
thE mEchanism for marinE planning within scotland is EntirEly sEparatE from thE tErrEstrial planning sEt-up.
“
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 11
Page 12 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
the GOverNmeNt has com-mitted to improving telecom-munications coverage on the basis that fast, reliable phone
and internet service is as important as, say, a dependable electricity and water supply. Phone and broadband operators have been lobbying for further powers to deliver these objectives. This will inevita-bly affect landowners on whose property masts and other equipment are sited.
The Electronic Communications Code facilitates the installation and main-tenance of electronic communications networks and governs the relation-ship between the telecommunication operators and those who provide sites for their apparatus.
A Government attempt to rush through amendments to the Infrastructure Act in early 2015 was unsuccessful and the industry now awaits ministers’ propos-als following a consultation period. We at CKD Galbraith attended meetings and made representations to the Department of Culture, Media and Sport (DCMS) dur-ing that process.
While some of the reforms will be to the detriment of landowners, it isn’t all bad news. Normally where utility infrastruc-ture crosses private land, compensation is paid to landowners. However, the revised Electronic Communications Code looks likely to retain the principle that a consideration should be paid for telecom-munications infrastructure.
The Code proposes telecommunication operators should have an automatic right to upgrade their equipment and share apparatus without prior agreement, or payment, to landowners. A key reason for this is to reduce payments to landown-ers, which the Government considers will translate into savings for the telecom-munication operators and consequently lower prices for customers.
Removing site sharing payment will undoubtedly reduce incomes from some sites as, when assessing the market rent, landowners will have to assume the operator cannot upgrade its equipment or share without consent.
Valuers would be asked to assess the consideration payable for a site on terms which cannot exist in practice. As the Central Association of Agricultural Valu-ers stated in its response to the consul-tation, the valuer would have no more direct evidence of such new agreements than he would if asked to value a horse by reference to the sale price of unicorns!
The DCMS intends to apply aspects of the Code which clarify terminology and adjust procedure to existing agreements. However, proposals such as the right to upgrade and share without consent or payment probably won’t apply to exist-
CONservatiON is an important part of manag-ing and sustaining water resources, enabling busi-nesses and home owners to
exercise some control over their water bills where they pay for water via a meter.
Water conservation also brings benefits such as cutting energy costs to heat and pump water and lowering bills for waste water disposal. Reducing these operational expenses can provide businesses with a competitive advantage while improving their environmental credentials.
Water costs are almost certain to con-tinue their long-term trend of outstrip-ping inflation owing to a combination of population increase, reduced availability due to climate change and regulatory
restrictions on abstracting water from over-stretched sources. It is estimated that companies can save between 30% and 50% by investing in no-cost and low-cost water reduction practices and technolo-gies. Resource Efficient Scotland – and WRAP in England and Wales – provide guidance on how businesses can reduce their water use.
All water conservation interventions rely on either:
Technology: including urinal and other washroom controls, which result in reduced water use with the same or simi-lar performance; and/or
Behaviour: including how people use water day-to-day. This will depend on the specific business but could include eve-rything from not over-filling the kettle to
l Counting every drop: A Siloette logger installed on a water meter.
Saving water is becoming increasingly important. Simon Gordon-Walker looks at some of the challenges and how to address them.
making savings by counting every drop
telecom reform is not all bad newsMike Reid looks at how planned changes to telecommunications rules will affect landlords on whose property masts are installed.
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 13
improved equipment or vehicle cleaning procedures.
New technology such as smart meters will provide businesses with more detailed information on their water use, allow-ing them to target water conservation to the most cost-effective areas. But smart meters are some years off for many parts of the UK. In the meantime, Artesia has been pioneering our new technology – a Siloette logger – to monitor water con-
sumption and provide high-resolution data. This ingenious device records pulses from the flow meter at sub 1-second reso-lution, and the data is then compressed and encrypted. The logger can store up to two years’ data from a typical property.
Once the information is downloaded, an algorithm is applied to create a high- resolution image depicting the flow into the property. The data is then analysed using pattern recognition to provide infor-
mation on time of use, flow rates, dura-tions, shapes and volumes.
With this data, consumption can be sepa-rated into different end uses so property owners have an estimate of amounts of water that can potentially be saved from different devices and uses. Understanding water use in this way enables property owners to reduce consumption, energy use and water bills.
Simple measures and changes in work-ing practice can be implemented in most business settings. More sophisticated and complex measures, such as water reuse and recycling, can then be investigated. But low-cost behaviour and technology interventions can be the first steps to greater water security.
ing agreements as this would amount to retrospective legisla-tion, and a potential interference with property rights.
Details of the Code should be published in 2016, but the proposed reform looks only to strengthen the power of telecommunication operators, already the stronger party in this relationship.
On a positive note hopefully we will get improved coverage and my mobile phone conversations won’t end with
“hello, hello, are you there..?”
l Water colours: A Siloette analysis chart, which colour codes different types of water use.
Simon Gordon-Walker is a dir-ector of Artesia, a water man-agement consultancy serving water companies, third sector, government and business.
[email protected] 320 091
making savings by counting every drop
Mike Reid heads up CKD Galbraith’s utilities depart-ment with particular expertise in telecoms and windfarms.
He is based in [email protected] 659 984
thE valuEr would havE no morE dirEct EvidEncE of such nEw agrEEmEnts than hE would if asKEd to valuE a horsE By rEfErEncE to thE salE pricE of unicorns.
“
Page 14 | Energy Matters Winter 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
now a regular – and gruelling – event in the rural calendar, the rSABI Great Glen Challenge goes from strength to strength. Toby Kirkwood reports.
the rsabi Great Glen Challenge 2015 saw 25 teams put themselves through a physical ordeal to raise
funds for those in need in the rural sector.
Teams of four from across Scottish agri-culture and rural business completed the tough 70km course from Invermoriston to Neptune’s Staircase in Fort William. CKD Galbraith entered three teams in the 28 August event, which involved a 17km run, 34km cycle ride, 7km kayak dash and a 12km walk.
The event is sponsored by solicitors Ledingham Chalmers and supported by
main partners NFU Scotland, Royal Bank of Scotland, The Scottish Farmer, CKD Galbraith and Bank of Scotland. It has raised progressively higher totals each year, helping RSABI, formerly the Royal Scottish Agricultural Benevolent Institu-tion, to support those in the rural sector who are in need.
Each member ran, cycled, kayaked or walked a section of the Great Glen with the aim of winning the race in condi-tions typical of Scotland’s unpredictable climate. The ultimate goal is the ‘double’ – best time and highest fundraising total.
CKD Galbraith was just beaten by RBS but secured both second and third places after a fantastic effort by all involved. The firm raised £3,216.25, contributing to a total £62,774 which far exceeded the initial fundraising target of £50,000.
“The RSABI Great Glen Challenge is now a well-known date in the calendar and growing in popularity each year,” said Paul Tinson, development manager of RSABI, who has organised the event since it began in 2012.
“We are seeing many of the same faces, but also competitors in 11 new teams whom we are delighted to welcome to the fold this year. Without exception, team members seem to have enjoyed themselves this year, despite exposure to four seasons in one day. But of course we never forget why RSABI exists and so the fundraising element of the day is always uppermost in our minds.”
In all, a fantastic day was had by those who took part and team CKD Galbraith are champing at the bit to get stuck into next year’s Challenge!
Our thanks go to Paul and the RSABI team for putting together another excel-lent event. Thanks also to everyone who sponsored the CKD Galbraith teams. If you would still like to show your support and donate to the RSABI, please click here.
Toby Kirkwood is a Trainee Surveyor in CKD Galbraith’s Stirling office.
[email protected] 01786 434 600
l Runners and riders (and paddlers and walkers): Toby Kirkwood, George Lorimer, Claire Acheson, Bob Cherry, Rob Whitson, Michael Fletcher, Dominic Wedderburn, Charlotte Maclean, Jamie McNeill, Peter Scott Aiton, Trini Graham-Stewart, Martin Cassels, and Andrew Adamson, who drove the support vehicle.
teams rise to Great Glen Challenge
CKD Galbraith has been appointed one of two framework consultants to work on behalf of Scottish Water, pro-viding land agency services for acqui-sitions, claims and land liaison work across Scotland.
Our specialist utilities team and innova-tive working practices were key to provid-
ing a competitive tender to achieve this success after an open tendering exercise.
Scottish Water provides vital services that are essential to daily life – clean, safe and high-quality drinking water to 2.45 million households and 154,000 business premises across Scotland. Every day the company supplies 1.3 billion litres of clear,
fresh drinking water and takes away 842 million litres of waste water for treatment before it is returned to the environment.*
Our surveyors are now working with Scottish Water to deliver its capital invest-ment programme across Scotland.
Scottish Water has been delivering one of the largest investment programmes in the UK water industry during 2010-15, help-ing to support jobs and the economy of Scotland, while protecting and enhancing the environment.* Source: Scottish water Annual accounts 2013/14
scottish Water success for CKD Galbraith
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 15
Non-Domestic rhi* Tariff name Eligible technology Eligible sizes Tariffs p/kWh
Small commercial biomass Solid biomass including solid biomass tier 1 (<200kwth) 3.76 contained in waste tier 2 (<200kwth) 1.00 Medium commercial biomass tier 1 (≥200kwth <1Mwth 5.18 tier 2 (≥200kwth <1Mwth 2.24 Large commercial biomass ≥1Mwth 2.03 Solid biomass CHP systems** Solid biomass CHP All capacities 4.17 water/Ground-source heat pumps Ground-source & water-source heat pumps tier 1 all capacities 8.84 tier 2 2.64 Air-source heat pumps** Air-source heat pumps All capacities 2.54 All solar collectors Solar collectors <200 kwth 10.16 Small biogas combustion Biogas combustion <200 kwth 7.62 Medium biogas combustion** ≥200 kwth ≤ 600 kwth 5.99
Large biogas combustion** ≥ 600 kwth 2.24
* Source: Ofgem.Tariffs that apply for installations with an accreditation date on or after 1 January 2016. ** Commissioned on or after 4/12/2013.
the reNeWable eNerGy iNDustry is undergoing a major shake-up as the Westminster Government reviews incentive entitlements across the board.
The CKD 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 on the Department of Energy and Climate Change website, www.ofgem.gov.uk/environmental-programmes.
Current renewable energy subsidies
Domestic rhi* Technology Tariffs p/kWh
Biomass boilers and stoves 5.14**
Air-source heat pumps 7.42
Ground-source heat pumps 19.10
Solar thermal 19.51* Applications submitted for the period 01/01/2016-31/03/2016. Paid
over a period of 7 years.
** From 01/01/2016.
New Generation tariffs Installed New tariffs capacity kW (Jan 2016) p/kWh
Solar PV <10 4.39 10-50 4.59 50-250 2.70 250-1000 2.27 >1000 0.87 Stand alone 0.87
Anaerobic Digestion ≤250 9.12 >250≤500 8.42 >500 8.68
Hydro <100 8.54 100-500 6.14 500-200 6.14 >2000 4.43
wind <50 8.54 50-100 8.54 100-1500 5.46 >1500 0.86
CHP** (30,000 units) ≤2kw 13.45
renewables Obligation Order* ≤50kw 10.66
Export tariffs** 4.85
Export Tariffs** All eligible installations * For period 01/04/2010 – 31/03/2014. Eligible Installations with a
declared net capacity of 50kW or less commissioned on or before 14/07/2009 and accredited under the ROO on or before 31/03/2010.
** On all eligible installations on or after 01/12/2012.
Source: Review of the Feed-in Tariff Scheme, 17/12/2015 (www.gov.uk) For further information click here.
Contracts for Difference (CFDs) From 26/02/2015. As at December 2015.
Technology Strike price range (£)
Advanced Conversion technologies 114.39 – 119.89
Energy from waste with CHP 80.00
Offshore wind 114.39 – 119.89
Onshore wind 79.23 – 82.50
Solar PV 50.00 – 79.23
renewable Obligation Certificates (rOCs)* For period 01/04/2015 to 31/03/2016
Technology ROCs/MWh
Anaerobic Digestion 1.9
Hydro 1.0
Offshore wind 1.9
Onshore wind 0.9
Solar PV (building mounted) 1.5
Solar PV (ground mounted) 1.3
* ROCs buy-out price set at £44.33/ROC by Ofgem.
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Winter 2016 | Page 15
www.ckdgalbraith.co.uk
Our exPertise
l Valuations
l Investment in renewables/ financial incentives
l Planning
l Land referencing
l Telecoms
l Utilities
l Wind power
l Biomass
l Solar energy
l Hydro power
Offices across scotland | sales & lettings | Farm & estate sales & acquisitions | Property & land management subsidy trading & advice | rural | energy | Forestry | Commercial | sporting | agricultural loans
Get iN tOuCh
Our energy experts can be contacted in the following 8 of our 11 offices:
aberDeeN Tom Stewart 01224 860 714 [email protected]
ayrCaroline Campbell 01292 292 [email protected]
CuPar Mike Reid 01334 659 984 [email protected]
eDiNburGhAnneka Fraser 0131 240 2280 [email protected]
iNverNessDougal Lindsay 01463 245 380 [email protected]
PerthCalum Innes 01738 456 075 [email protected]
GalashielsHarry Lukas 01896 662 829 [email protected]
stirliNGRichard Higgins 01786 434 625 [email protected]
For a full list of our energy experts go to our website or see our guide to who’s who in our Energy team.
reNeWable PrOJeCts
CKD Galbraith’s extensive experience in renewables stretches across Scotland, including the islands, and into the north of England.
Wind Hydro Biomass Solar
Key tO maP
