A leading independent property consultancy with expertise covering a broad spectrum of property related services

Co-locating generation technologies with storage will grow with the rise of renewables and the need for grid stabilisation

Hugo Remnant and Philippa Orr report. 

The UK aims to be at the forefront of the green industrial revolution by generating 65% of its energy from renewable sources by 2030 in order to achieve net zero emissions by 2050. We are already on track to achieving this, having cut carbon emissions by more than any similarly developed country.  

Advances in renewable energy technologies coupled with the mandated drive towards cleaner fuel sources means we are starting to see more co-location – the combining of two or more renewable sources and/or energy storage on one site. 

Co-location offers unique prospects for developers to boost the productivity of existing or proposed infrastructure, reduce construction costs and shorten development timescale. The attraction of co-location is shown by well-known household utility companies’ plans to add solar panels to wind farms and elsewhere, a super battery to a Scottish wind farm. 

However, bear in mind that similar concerns and issues apply to co-location as to single renewable-technology sites.  It is important that landowners seek professional advice when approached by operators looking for suitable sites for projects such as solar arrays . 

Operators should be reputable, with a proven track record and an ability not only to deliver the development, but to manage it thereafter. Some operators will obtain a commitment from the landowner and as soon as they have obtained something of value, such as a grid connection offer or planning consent, sell it on.

Only a very few sites suitable for the generation of electricity are good for development.  There must be capacity in the national grid at that point to receive electricity generated by a new power station, and a suitable point for connection into the grid; while there will be planning and other matters to consider.

Having identified a possible opportunity, operators will generally want three things:

  • An Exclusivity Agreement so that they do not lose the value of their input in working up the site, only for the landowner to approach other operators; 
  • A Letter of Authority without which the District Network Operator will not consider an application for a grid connection; and 
  • Agreed heads of terms for an option agreement and lease. 

Typically, a solar arrays will require 3-5 acres of land to generate 1MW of energy, though as technical advances make panels more efficient, so the land required to generate a set amount of electricity is falling. Rental values for land vary from site to site, but landowners should always seek a minimum rental per acre and a rent linked to the productive capacity of the development, whichever is the greater, to protect themselves from falling land requirements.

Feasibility and grid connection work are specialist fields.  The costs escalate with success, culminating in a very costly final grid connection offer that will reflect the heavy engineering costs associated with accommodating the new connection.  So pick your operator carefully, and be prepared to work with them in partnership to develop what might become a valuable new source of income for the estate.