Retained as Factors for one of the parties, the Firm assisted the neighbouring landowners to take advantage of Government incentives to promote renewable energy generation. Working on behalf of the client, together with the neighbouring party and specialist consultants, we reviewed available options, and concluded a hydro scheme presented a suitable investment opportunity.
The combined properties featured a march burn with the key ingredients of a suitable head of water (height and drop) and flow that was inaccessible to salmon and sea trout due to the presence of a waterfall. Access from the public road network was good, and with existing estate tracks leading beyond the intake dam location, only a short section of new-build track was required. The powerhouse, containing the turbine and generator, is 20 metres from a public road and 5 metres from the main transmission line, minimising the cost of private cable connections to the grid.
The completed run of river' (i.e. no storage lochs) generating scheme has an installed capacity' (potential power output) of approximately 695kw. This produces enough energy for about 500 households, assuming average annual consumption of 4,700 kWh, with the entire output sold to the grid, which is obliged to take all power produced.
The project illustrates how landowners are capitalising upon the Feed in Tariff and helping to meet the Scottish Government's ambition of generating the equivalent of 100% of Scotland's own electricity demand from renewable sources by 2020. We expect demand for renewables to grow, as there is little expectation of fossil-fuel prices falling in the medium or long term.
The estates formed a Joint Venture company to develop, own and run the hydro asset, with each party contributing equally. Comprehensive environmental and fishery studies were undertaken as part of the planning process as well as technical assessments.
On behalf of our client, we appraised the scheme, comparing the joint venture approach with rental options and negotiating the JV agreement with the neighbour. We also liaised with contractors, planning and technical consultants and others.
With planning consent granted, contractors had an 18-month period to build the scheme, during which time the Feed in Tariff was launched, offering substantially improved levels of support for qualifying renewable energy projects. Meanwhile, energy prices kept increasing, so that now the scheme has been commissioned, its economics are even more favourable than originally envisaged under the Renewable Obligations Order.
Dougal Lindsay based in our Inverness office who led the project on behalf of one of the Joint Venture Partners said: "Both estates have staff able to carry out necessary routine maintenance and the project has created a closer working relationship between the two, with those involved at ground level genuinely interested and enthused.
"We were able to step into our client's shoes to coordinate the project and focus the efforts and contributions of all those involved on their side," added Dougal Lindsay.
Find out more about our hydro expertise or contact Dougal Lindsay to discuss any potential hydro scheme.