Galbraith energy matters summer 2016

Energy ISSUE 12 Summer 2016

matters

Back to the future: Time to dig deep for a new power station?

PLUS: Bringing power to the community | When the grid comes first | Making off-shore competition work | Recycled wind turbines | The benefits of GIS | Why our energy culture must change

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Welcome

contents

Mind the energy gap

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While energy is much in the news, the question of energy security gets less attention than it warrants. There appears to be increasing uncertainty over whether the planned nuclear power generation station at Hinkley Point will be built as the investment decision is delayed. Meanwhile, speculation grows as to the appetite and ability of the developers to deliver the project, adding to sustainability and affordability concerns.

The project was planned to be operational by 2025. Achieving this deadline now seems unlikely and, as we’ve committed to stopping coal-fuelled electricity generation by then, there is an increasing power gap to be filled.

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Various measures introduced by the current Westminster Government have seriously curtailed deployment of renewable technologies. However, an innovative industry has grown up as a result of incentivisation strategies. The renewables industry is capable of finding solutions to bring these technologies to the fore despite the challenges, albeit perhaps not at a rate which will fill the gap.

Unconventional gas production, either by fracking or exploitation of coal bed methane, is one potential answer in the short to medium term. There are quite valid environmental concerns about these industries, but options are becoming increasingly limited. There are valid arguments on all sides, but unless we are able to reduce our power requirements, we must either encourage greater deployment of renewable technologies or accept onshore gas production as a necessary evil in order to keep the lights on.

Calum Innes, Partner

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 250 people in offices throughout Scotland.

The firm provides a full range of property consulting services across the commercial, residential, rural and energy sectors.

Why landowners are putting the grid first.

A future for used wind turbines.

Sharing the ri People power is a positive force in renewable energy and there’s more than one way to get involved.

Jamie Grant reports.

7 Cover story: The power station inside a mountain.

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A new 4G network for the emergency services.

Making off-shore energy competition work.

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Readers of Energy Matters will know that communities can reap major benefits from renewable energy schemes that entail developers funding neighbourhood initiatives.

These payments have allowed communities across Scotland to invest in facilities such as village halls, play parks and cinemas. The general rule is that a community can expect to receive £5,000 per installed MW from a commercial scale windfarm. There are various means of distributing the rewards to local causes and early engagement with developers can help to ensure this is well tailored to the community.

However, another option exists for communities, which is to step into the role of developer themselves, potentially generating significantly increased returns for investment

Energy: the cultural challenge.

11 Counting the cost of cheaper oil.

12 GIS aids project management – and land registry.

14 Know your DNOs from your ICPs.

15 Current renewable energy subsidies.

CKD Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.

Follow us on Twitter: @CKDGEnergy Like us on Facebook: www.facebook.com/ckdgalbraith Join us on Linkedin: www.linkedin.com/company/ckd-galbraith

Energy Matters is produced by ­Allerton Communications, London, and designed

by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.

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e risks... and the benefits back into the community. The Scottish Government strongly supports community developed renewable energy. An ambitious target of 500 MW of community-owned energy by 2020 was set, but the unexpected success of the policy support on offer ensured that this target was achieved five years ahead of schedule – even though communities hoping to install energy schemes face all the same challenges as a commercial developer, with the added difficulty of requiring voluntary input to get a project off the ground.

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Fortunately, there is significant support available to such projects, particularly through the Community and Renewable Energy Scheme (CARES), which provides both finance and mentoring to groups. The key benefit of this scheme, and undoubtedly the facilitator of the policy’s success, is the ability of CARES to finance the high-risk pre-consent development stage. The loan is only repaid if the application is successful.

Another option, which could be considered as the middle ground in balancing risk and reward, is shared ownership. In some cases communities have been able to take a share of ownership of a wind farm, allowing them to benefit

New senior appointment

The key benefit of the CARES scheme is its ability to finance the high-risk pre-consent development stage.

from increased returns while the initial risk is somewhat reduced. A community could, for example, take ownership of one turbine out of a development of 10 – or more likely an equivalent equity stake. They would then be responsible for the installation and ownership costs related to that turbine, but would receive 10% of the returns generated from the scheme.

A shared ownership approach may be seen as benefitting the commercial developer, as community involvement naturally tends to reduce local opposition to renewable schemes, and recent changes to business rates maintains relief for schemes where ownership is shared with the community.

The renewable energy landscape is constantly changing and evolving, but at present there are opportunities available to local groups, who may be in a position to reap the rewards of involvement in renewable schemes. Of course, it is advisable for those considering such a scheme to carefully review matters and take appropriate advice on the many aspects affecting the viability of a proposal. jamie.grant@ckdgalbraith.co.uk 01786 434638

Jamie Grant, left, has been appointed as Senior Planner to work on a wide range of commercial, rural and renewables planning projects for our clients across Scotland.

he also has considerable experience in renewables. He joins us from BayWa r.e. where he was instrumental in the company’s entry into the UK onshore wind development market and contributed to the acquisition and delivery of the Fraisthorpe development in the East Riding of Yorkshire.

With a background as a chartered town planner,

Before that, Jamie spent four years with Infinis as project

director covering a broad portfolio of onshore wind farm development assets, including securing the consent for the 21-turbine A’chruach scheme in Argyll.

These roles built on his planning background and his experience gathered as a consultant focusing on energy and waste applications with Terence O’Rourke Ltd.

www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 3

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Hydro scheme generates more legal heat Calum Innes catches up on a long-running valuation battle.

Two years ago in Energy Matters (issues 5 and 6) we reported on the long-running case in which large parts of a hydro-electricity generating scheme were deemed exempt from valuation for the purpose of paying business rates.

The Assessor for Tayside appealed against the committee’s decision. Now the Lands Valuation Appeal Court has published its judgment – but while the court concluded the committee may have erred in its application of a Statutory Order, much uncertainty remains as the case has been sent back to the committee for further consideration. The hydro owners had argued for valuation on a comparative basis, while the assessor preferred to apply a ‘receipts and expenditure’ formula – which would result in a significantly higher valuation and rates liability.

In an earlier hearing, the Tayside Valuation Appeal Committee rejected the assessor’s argument that engineering works such as dams, intake chambers, supports, thrust blocks, ducts and chambers should all be treated as rateable for the purpose of the Valuation for Rating (Plant and Machinery) Scotland Regulations 2000. The reasoning was that such plant could be excluded as the plant and machinery were used for generation, storage or transmission of power for distribution then sale to consumers.

But in their February 3 ruling the judges disagreed with the committee’s interpretation of the regulations, finding that although certain hydro plant and equipment may be excluded from one class within the order, they could be included in another, and therefore be rateable.

The judges allowed the assessor’s appeal and referred the case back to the committee, which will reconsider the rateability of plant and machinery and may wish to elaborate on its reasoning in respect of ‘penstock’ – a reference to parts of the hydro workings upon which much of the case turned.

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The court held that the valuation method is a matter for the committee.

Counsel for the ratepayers believes the decision leaves several matters unanswered. The judges allowed the appeal and quashed the committee’s valuations but did not uphold those made by the assessor on a revenue and expenditure basis.

Further, the court held that the valuation method is a matter for the committee. During the earlier hearing the assessor agreed that the comparative approach proposed by the ratepayers was the preferred valuation methodology; however, he felt there was insufficient evidence to support that route.

The outcome of the committee’s reconsideration is awaited keenly, and we will report further in due course.

Calum Innes is head of CKD Galbraith’s energy team. calum.innes@ckdgalbraith.co.uk 0131 240 6989

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Grid first... technology later Landowners are taking control of renewable energy projects to maximise returns. Richard Higgins reports.

Some well advised landowners are putting the grid first and considering securing their own connections for renewable energy projects.

Bypassing the convention of the developer leading the process in this way offers the opportunity to work collaboratively with neighbouring landowners, and can involve working alongside the TNO (Transmission Network Operator) and DNO (Distribution Network Operator) in delivering a strategic outcome: matching technology to grid, rather than the other way around.

This considered approach looks at a snapshot of available grid and capacity before selecting the most suitable technology/ies and therefore avoiding wasted time and resources. Rather than letting the developer lead and control the grid application process, the landowner can assume an element of control at relatively modest cost, identify the broad parameters of potential and then work collaboratively with one or two developers to determine the optimum technology mix and timescale for development.

The current grid offer system could be said to be very inefficient where grid offers which may never be taken up can artificially constrain availability and consequently preclude better options in the locality.

In turn it is difficult for the TNO and DNO to strategically plan for the future, and this leads to inefficiencies of supply, resulting is increased costs for everyone. This does not look likely to change anytime soon, but by taking control at an early stage

landowners will at least enter into the process with their eyes open and the ability to be a little more reactive to circumstances.

For landowners seeking to secure grid connection, it is important to appoint a specialist advisor early in the process. Ensuring a cost effective and robust connection is critical to any installation. Sensible agreements should be entered into with developers specifically to drive cost effectiveness and time management. The chance to understand the timescale for

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The landowner can assume an element of control at relatively modest cost. reinforcement of the wider grid and other proposed project connections may mean that, with some sensible liaison between projects, a more efficient market could emerge.

That would mean reduced costs, help to meet internal rate of return thresholds and increase potential project viability in an ever more constrained marketplace.

Taking control is key. A measured approach, with support from the National Grid, will help power the uptake of landowners looking to strike their own technology match.

Richard Higgins is Partner in charge of Stirling Office. richard.higgins@ckdgalbraith.co.uk 01786 434625

www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 5

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Used turbines can help make wind power viable New imperatives drive the re-powering of used equipment in a subsidy-free world, says Toby Kirkwood.

Onshore wind is seen as the most effective and scaleable low-carbon technology in the UK, even with subsidies being phased out.

It is estimated that the cost of onshore wind could continue to fall from £85/MWh to £60/MWh by 2020 as a result of using larger turbines in high wind-speed areas.

This means onshore wind has the potential to match a new gas plant and be significantly cheaper than offshore wind, biomass, or even nuclear.

To achieve these cost reductions, new onshore wind projects will use the UK Government’s contract for difference (CfD) auction mechanism.

Since May last year, ministers have changed planning laws and cancelled onshore windfarm developers’ access to the main incentives – to start the phasing out of renewables subsidies.

In a subsidy-free world, both developers and investors will look to cut costs. The options include repowering existing assets and powering new projects with used turbines.

Turbines designed to last about 20 years are prematurely dispatched when existing windfarms are upgraded with bigger, more powerful units, and projects with certain grid or height limitations can benefit from using these preowned turbines. Investment can be recouped fairly quickly on a machine that is less than 12 years old. A 10-year-old turbine still has half its lifetime to run, and because it is less than 20 years old the original certification is likely to remain valid.

The main advantage of investing in used turbines is they are cheaper than new. Developers wanting to keep costs low can generate a good income without subsidy.

However, uncertainty about how long and how well used machines may function, financial institutions can be nervous about investing in them. Some dealers address this by offering two- or three-year warranties, but most buyers still use their own money and take the risks on themselves. Developers keen to keep costs as low as possible can be unwilling to take out insurance, and warranties tend to increase prices.

Spare parts are generally available at a reasonable price since many manufacturers make use of third party components.

But used turbines must be fit for purpose. Many grid operators will not accept power from older machines which could trip the grid

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Investment can be recouped fairly quickly on a machine that is less than 12 years old. by producing power when the grid voltage is temporarily reduced due to a fault or a load change. This can be avoided by installing low-voltage ride-through (LVTR) technology.

Newer turbines are usually equipped with this as standard.

For landowners or developers looking to repower assets, the second-hand turbine market should be explored. Risks must be taken into consideration in terms of funding, insurance, warranties and reliability, but used turbines can be an attractive investment in a subsidy-free world.

Toby Kirkwood is a trainee surveyor. toby.kirkwood@ckdgalbraith.co.uk 01786 434635

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Back to the future: A 50-year-old idea shows the way ahead Doubling the size of a power station inside a Scottish mountain could help to balance energy supply and demand, says Ross Galbraith, group hydro manager of ScottishPower.

Cruachan Power Station truly is a gem. Its sheer ingenuity thoroughly impresses me every single day.

The concept is straightforward: the station stores water in a reservoir half-way up Ben Cruachan, ready to release it and generate electricity from turbines deep inside the mountain when demand is high. When demand is low, Cruachan uses excess electricity from the grid to pump water from Loch Awe back up the mountain to store in the reservoir. It acts like a battery, regularly being recharged, and helping to balance supply and demand on the national grid.

Building Cruachan a little over 50 years ago was far from simple. The design was a complex feat of engineering, and it was a mammoth task to construct it. The genius of Sir Edward MacColl’s initial design, coupled with the skill and determination over six years from the 4,000-strong workforce, ensured that it was built to last.

Half a century on, as we generate more electricity from wind power, Cruachan is as important as ever. When the wind is blowing at times of low demand, we need ways to store that power. Pumped storage hydro is the most cost-effective and well-developed large scale electricity storage technology in existence, so we have spent the last two years working on a project to see if it is possible to increase the size

of Cruachan. Our findings show that we could double capacity, with investment of between £300 million and £400 million. To deliver this, we would need to excavate a new cavern within Ben Cruachan, and new dams would be constructed to increase the capacity of the upper reservoir. It would take at least eight years to build, and would require up to 800 workers for the main construction phase.

The first step is complete. We know that the project is physically and technically possible.

Now we need to consider the next steps.

Part of this will include discussions with government and regulators on potential support mechanisms, to understand if the UK wants a new generation of pumped storage hydro.

If the project is taken forward, as we hope it can be, we will need to finalise a design.

This will see us working with a wide range of environmental groups, planners and community groups. Building new dams and hollowing out a mountain to install a network of pipes, tunnels and turbines would be a major engineering project, and one that would require the utmost care for the surrounding environment.

Cruachan Factfile l U K’s second largest pumped storage plant, constructed between 1959 and 1965 l Four pump-turbine units (2 x 120MW, 2 x 100MW) l 19 miles of tunnels/ aqueducts l 7GWh reservoir capacity l Intakes, pipes and tunnels capture rain water from an area of 9 square miles l Reservoir can supply 14.5 hours full load generation

In a world of fast-paced technological developments, it is rare to turn to a 50 year-old concept to support the future needs of an industry. But Cruachan works, and the technology is more important than ever in supporting the UK’s green energy ambitions.

Inside the hollow mountain: How Cruachan Power Station works www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 7

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All change for the Emergency Services Network Mike Reid looks at the benefits of the new 4G network expected next year.

The Government has selected EE to provide the UK’s Emergency Services Network (ESN).

The ESN will give the emergency services access to 4G voice and data services for the first time and provide an improved service for emergency workers that will help save lives. It should also have wider benefits, particularly for rural communities. This will be the first time the emergency services will be using a commercial 4G network and, unsurprisingly, they will have priority over other users.

Competition: It’s not just about the winners VIEWPOINT

Michael Brown head of project planning, EDPR UK

EE’s new 4G ESN will replace the existing Airwave Tetra system from mid-2017 as current contracts expire. Throughout the transition there will be interoperability to ensure continuity of coverage. EE already has a network of sites across the country. Equipment upgrading work will be required to accommodate the ESN and site providers will be approached if this requires consent under their current lease. Some EE leases will expire in the next few years so it is likely extensions to them will be proposed at the same time.

EE plans to build 500 sites across the UK, expanding coverage particularly in rural areas. A significant proportion of these sites are to be located in Scotland.

The EE rollout for these new sites has already begun and we are representing site providers in high level discussions with EE. Careful consideration is being given to lease terms, particularly in light of the proposed reforms to the Electronic Communications Code mentioned in the previous edition of Energy Matters.

As part of extending the ESN into remote rural areas where commercial networks are unviable, the Government plans to own and operate sites, making these available for EE and other mobile networks.

Once the extended network is complete we should see improved coverage in rural areas for 4G services. This should be a significant benefit to those communities, including helping health and safety objectives, which have been problematic due to lack of coverage.

Airwave is owned by Motorola and the future of its sites is uncertain after the transition of the ESN to EE. Airwave may look to assign some sites and decommission others depending on the demand for their network in the future.

The telecommunications market is constantly evolving.

Having a good knowledge of the market is critical when agreeing terms for all aspects of telecoms transactions.

Mike Reid heads CKD Galbraith’s utilities department, with particulate expertise in telecoms and windfarms. mike.reid@ckdgalbraith.co.uk 01334 659984

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n:

After the dust settled on the budget, and the more colourful phrases and policies receded from the analysis, one of the common concerns was that the UK’s productivity was failing to keep pace with global competition.

Competition is everything within the UK’s energy market. However, unless there are sufficient market opportunities for the supply chain to secure contracts, the competition required to deliver innovation and improve productivity cannot flourish.

The reliable supply of affordable energy is a pre-requisite for economic and social prosperity. The UK led the liberalisation of the energy markets, and competition is a key tool at every stage in the operation of that market.

Developers of new renewable electricity projects are required to compete with each other in an auction for a ‘Contract for Difference’; a contract which guarantees the price of power for (in the case of offshore wind) the first 15 years of operation, with the lowest bidders winning the auction.

Offshore wind developers in the UK

have worked hard and invested early to develop healthy competition in terms of a significant number of different offshore wind projects around the UK. Competition between developers alone can’t improve productivity and reduce power costs. Successful competition depends upon the companies forming the energy supply chain. Developers of energy infrastructure projects need a healthy supply chain with multiple competitors who have enough stability to invest in the people, plant and innovation which ultimately reduce cost.

That means that the auction must be big enough to support multiple projects, and create multiple opportunities for the supply chain. The fundamental principle of competition is that there are losers as well as winners. A market which isn’t big enough to offer anything more than a single ‘winner takes all’ opportunity is not attractive to foster the supply chain competition which will enable innovation and increased productivity to flourish. Why would a company invest heavily in product innovation

when the market opportunities for that product are so limited?

The first auction demonstrated that the industry is capable of significant cost reduction. In contrast to other technologies, the cost of offshore wind generation has fallen by a third within a decade. That auction was held in 2014, but it was much smaller than expected, supporting far fewer projects than anticipated. After much delay, the second CfD auction was announced as part of last month’s budget; with an indication that it would be smaller than the first.

To sustain the success of the UK offshore wind industry, it is essential not only that this auction is sufficiently sized, but that the supply chain can be confident of multiple opportunities in future auctions. If a market cannot sustain a reasonable expectation of success for a reasonable proportion of its participants, it cannot sustain the competition which has successfully delivered the cost reductions achieved to date.

EDPR is a leading global renewable energy company.

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To sustain the success of the UK offshore wind industry, it is essential that the supply chain can be confident of multiple opportunities in future auctions.

www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 9

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Energy efficiency: is the challenge more cultural than technological?

VIEWPOINT

George McGhee, chief executive of Netthings.

It is quite a difficult circle to square. Energy is a commodity. Most commodities are taken for granted and although most businesses, even small ones, don’t like to be wasteful, putting a lot of focus on managing a commodity like energy is typically not high on the list of priorities.

Changing bad habits that have become ingrained over the years is not an easy task.

Even once achieved, genuine and enduring behavioural change is almost impossible to sustain. Hearts, minds, environmental consciences, individual employees’ pockets and company profits all need to be leveraged as tools to make sure that genuine change is implemented and constantly reviewed.

Technology of course can help and is helping.

But cultural change as much as anything is perhaps what is really needed.

“The most efficient kilowatt of energy is the one that you don’t use.”

Eliminating expensive and unnecessary waste is the obvious place to start, but why is it so

difficult to get started? The journey begins with awareness and knowledge. Identifying the drivers of wasteful usage is the key.

Understanding what is a normal profile of usage for your business throughout a 24-hour cycle in a typical week, month and year provides a baseline against which anomalies can be measured and flagged. Looking deeper can identify the plant, machinery, equipment or devices that are the source of “above-normal” energy consumption. Further investigation can lead to an understanding of the behavior or processes that should change to prevent the same wasteful exceptions happening again.

The industry is flooded with case studies of the bad, ugly and uglier; on contention between airconditioning and heating systems; on vending machines and drinks dispensers that are on 24/7 all year round; on night-watchmen who turn on the heating for an entire building so that their own office is warm; on timers and set-points that were inaccurately commissioned and not discovered until years later; on thousands and thousands of pounds of wasted energy year-in, year-out.

Energy monitoring and technology solutions exist to tackle this but are expensive, complicated and beyond the economic envelope of most businesses with small or medium size commercial properties. Anything that smacks of inordinate expense or complexity will only get shoved further down the priorities stack. Technology based solutions need to be simple, easy-to-use, easy to install, and pay for themselves quickly from the savings made. An ROI of more than 18-24 months is unlikely to pass muster for cash-conscious companies.

NetThings Edinburgh-based technology company NetThings develops low-cost remote energy monitoring, control and analytics solutions for small buildings. The NetThings platform has been created to support future growth and optimise productivity output in sustainable cities using “internet of things” technology.

The vision is to empower businesses to make changes through effortless control of their surroundings and support cities to have the power to efficiently reduce waste and optimise energy usage.

For more information please contact Mia O’Neill. mia@genoablack.com 07805 289326

But even the best energy management systems may not be enough to make a dent in the lack of adoption among SMEs. More than half the businesses in the UK, according to industry watchdogs, have yet to launch any form of energy efficiency practice.

Whether it comes from a desire to help manage climate change or simply to shave operational costs and improve profitability, the volition to improve energy efficiency requires commitment and leadership from business owners and mangers. The culture of “tolerable waste” is what needs to change. Energy may not yet be a sufficiently expensive commodity to attract the right level of management attention but, despite fluctuations in supply costs, the underlying trend is heading in only one direction.

A tipping-point will surely be reached, and the sooner the better.

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Counting the cost of cheaper oil The mothballed rigs in the Cromarty Firth are clear evidence of the oil industry downturn, but the effects are also being felt on-shore. Harry Stott reports.

The turbulent times for the North Sea oil industry have been well documented in the press.

The price of oil fell to about $30 a barrel earlier this year, though it has since crept higher.

There is a cold economic wind blowing through Aberdeen at the moment, and there does not appear to be an immediate recovery on the horizon.

On a recent trip to the Cromarty Firth the immediate effect of this was in full view. No less the 12 rigs were “hot stacked” in the Firth with only skeleton staff on board, having been towed in until prices recover and operations become profitable again. There is further evidence of hot stacking in the Tay Estuary and more unusually in the Firth of Forth where there were three oil rigs at last count.

The decline in oil prices has most keenly been felt in Aberdeen. House prices have fallen, though this has created opportunities for others who had been priced out of the market during a seven-year period of phenomenal growth. Hotel room occupancy has fallen to around 50% and there has been a significant reduction of start-up businesses. The problems have also been felt in Invergordon on the Cromarty Firth, where a number of local businesses have suffered, with some shops closing, including the High Street bank.

The commercial market has also been affected but, as with the residential market, it is not all bad news and there are still opportunities for landlords and tenants. The impact of this increased supply and reduced demand for space has been most prominent in this sector.

Headline rents are still being maintained, but attractive incentive packages and increased lease flexibility are becoming the norm. The opportunity for landlords and tenants to achieve beneficial deals requires a different mindset.

Tenants know that the costs of relocation can be considerable and so, if landlords can be realistic, there are good prospects for negotiating terms acceptable to both parties.

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The opportunity for landlords and tenants to achieve beneficial deals requires a different mindset.

The hardships being felt in areas closely associated with the oil industry can also bring benefits elsewhere in Scotland. We are aware of one national house builder who has decided to pull out of operations in Aberdeen due to the perceived lack of demand and is now concentrating on actively acquiring sites in Scotland’s Central Belt, which in turn leads to additional competition in the market and healthy land prices for landowners.

Harry Stott is involved in a wide range of commercial property throughout Scotland. harry.stott@ckdgalbraith.co.uk 01738 456065

www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 11

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2016 Event Calendar

Daniel Campanile explains some of the ways Geographic Information Systems can help to keep

We would be delighted to see you on our stand at any of the following events.

May Beef Expo Agricultural Business Centre, Bakewell, Derbyshire May 20 Fife Show Kinloss, Cupar May 21 June

Royal Highland Show Ingliston June 23 to 26 July

Example of a relational database from Moray Offshore Renewables project. Grantor and agreement information (including status of agreement) is displayed in relation to towers.

Databases: The roadmap to project management success There is no simple, generic approach to managing and delivering large projects with extended timescales and changing, complex data.

GWCT Game Fair Scone, Perthshire July 1 to 3 Border Union Show Kelso July 29 and 30 August Moy Game Fair August 5 and 6 October Stirling Bull Sales United Auctions, Stirling Agricultural Centre, Stirling October 16 to 18 November Agriscot Highland Hall at The Royal Highland Centre, Ingliston November 16

However, it is becoming increasingly clear to us at CKD Galbraith that projects of this type can benefit significantly from using carefully developed and designed databases. We are involved in two major energy projects that have opted to use the database approach.

Good information can provide added value to projects by keeping clients updated on progress. This can be directly embedded in data or conveyed through customised progress reports, automatically generated from the database.

For our clients enabled with geographic information systems (GIS), progress updates can also be communicated directly through the supply of geospatial data with all the key information sitting directly beneath the geographical extents. Just looking at it reveals valuable additional information, such as land ownership details and contact information, or the status of agreements put in place as a result of the project.

GIS enables us to share geospatial data directly with our clients, allowing them to interrogate the most up-to-date information easily. Data

required at specific phases of the project can be displayed and extracted.

Geospatial databases are only one aspect of the potential for storing and using large volumes of information, and most GIS data lends itself well to this type of data management. However, when interconnected data become too complex, more robust relational databases become essential. Another project for a major energy provider gave CKD

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Just looking at the data reveals valuable additional information.

Galbraith the opportunity to use a relational database to better manage, plan and report on the work.

The role of databases for internal management should not be underestimated. They provide effective tools for client reporting, but, crucially, they also provide valuable insight to inform strategy as projects develop. Critical bottlenecks or potential inefficiencies in workflows can be identified and addressed more quickly, increasing the quality of work and making the delivery of key milestones more achievable.

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elp to keep complex projects on course... and ease the route to Voluntary Registration.

How technology can help to register land ownership with greater clarity Land reform has been on the political agenda since November 2014 when the process of establishing the Land Reform (Scotland) Bill began.

MSPs approved the land reform proposals in March and the Bill has subsequently received Royal assent, although much of the detail around many of the measures has yet to be finalised. One of its fundamental objectives is to establish greater transparency of ownership across Scotland with a view to promoting future sustainable economic development.

the SASINE REGISTER The General Register of Sasines, which is also known as the Sasine Register, dates back to 1617 and is the oldest land register in the world. Its name comes from the old French word ‘seizer’, which means ‘to take’. The Sasine Register is a chronological list of land deeds, which contain written descriptions of properties. It is gradually being replaced by the Land Register.

Underpinning this aspect of the Bill is a pledge to enhance and complete the public Land Registry, a map-based register containing legal rights and burdens through title. At present, the Land Register covers only about 30% of Scotland’s landmass. The rest is still represented within the older Sasine Register.

A number of levers have been put in place to promote the migration of titles from the Sasine Register to the Land Register. Of particular note is Voluntary Registration, a procedure which allows landowners to voluntarily submit for registration their ownership and rights.

CKD Galbraith has identified a number of factors that may make early Voluntary Registration advantageous for the rural sectors in which we operate. Benefits include greater clarity of ownership and the creation of a stronger title, potential identification of previously unknown land that may be of economic value, and the ease of future land transactions.

The rural sector has been aware of Voluntary Registration for some time, but the energy sector is just beginning to pick up on the benefits of early registration. A major energy provider has expressed a desire to Voluntarily Register all the key substation sites under its ownership.These do not add up to a large area of land, but the value in progressing Voluntary Registration is beginning to be seen as outweighing the consequences of leaving some of the sites within the Sasine Register.

CKD Galbraith is uniquely placed to help with Voluntary Registration. Our strong understanding of the complex makeup of rural assets, ownership and rights is allied to the technical mapping expertise to translate this knowledge through our developed geographic information system (GIS) capabilities.

Daniel Campanile is CKD Galbraith’s GIS Manager. daniel.campanile@ckdgalbraith.co.uk 01786 434634

Examples of a Sasine Register entry and a modern plan suitable for Voluntary Registration.

the LAND REGISTER This is a map-based register established by the Land Registration (Scotland) Act 1979. It is now in operation throughout the whole of Scotland and will eventually replace the Sasine Register. It is a register of the title rather than a register of deeds. When a property is registered, a Title Sheet is created and guaranteed by the state.

www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 13

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Easy as ICP Do you know your DNOs from your ICPs? Nick Morgan is your guide to connection providers and network operators.

Who’s who, and what they do

• A larger volume of projects being completed.

Ofgem, the regulator of the electricity industry, continues to look at ways to encourage competition in the provision of grid connections and upstream reinforcement (work required elsewhere in the network to facilitate a connection) so that customers get fairer prices, greater transparency in cost and better service.

There are however still “non-contestable” aspects of a connection that require the advice of the Distribution Network Operator (DNO) who will need to provide the following: • Information about the existing network, agreeing the point of connection, • Approval of the design, • Upgrade or change parts of the network needed to support the connection, • Carry out the connection into the network before adopting.

DNOs – Distribution Network Operators – already follow obligations on pricing in line with CCCM (Common Connection Charging Methodology), price control incentives and the Competition Act 1998 with a view to providing least-cost options for connection, but Ofgem continues to press. As a result the SSE Group has actively published lists of those companies who are available and suitably qualified to carry out connection and refurbishment work on a prospective customer’s behalf. This list is called the Alternative Providers Register and shows all those companies who have the appropriate accreditation to carry out the work. While an ICP – Independent Connection Provider – can provide a connection, it then lets a DNO adopt the network, whereas an IDNO – Independent Network Operator – can develop, operate and maintain local electricity distribution networks.

ICPs and IDNOs are available to carry out services within the “contestable work” for any grid connection. This includes design of the connection including ascertaining the point of connection (POC), construction of underground or overhead infrastructure, building substations, transformer buildings, installing switch gear and transformers.

Potential benefits

• There is greater competition in providing connections, which may mean vital cost savings on more marginal projects, • More available contractors may mean greater availability of labour to carry out projects ahead of contracted connection dates,

Potential issues

• If aspects of the proposed connection are defective then there is a risk that the line won’t be connected or adopted without potentially expensive remediation work being carried out.

• You will want to ensure that the ICP or IDNO has sufficient experience to carry out the scope of work provided but also be sure what their parameters are when getting them on board.

• Although a connection has been brought forward by introducing an ICP it still relies on availability of DNO staff to carry out their duties.

“

There is greater competition in providing connections, which may mean vital cost savings on more marginal projects.

CKD Galbraith has a great deal of experience working alongside DNOs, ICPs and IDNOs as we carry out the full scope of wayleave services ensuring that any proposed new or refurbished infrastructure required to facilitate a connection has the necessary consents before it can be installed on land. Whether the infrastructure is on your own land or involves a third party we can advise on matters of land referencing, wayleave consents, feasible cable or overhead line routes and compensation issues.

Nick Morgan is an associate specialising in wayleave work and statutory consents. nick.morgan@ckdgalbraith.co.uk 01738 456063

Page 14 | Energy Matters Summer 2016 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy

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Current renewable energy subsidies The renewable energy industry is undergoing a major shake-up as the Westminster Government reviews incentive entitlements across the board. The CKD Galbraith 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.

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 2016-2017.

Technology

ROCs/MWh

Anaerobic Digestion

1.8

Hydro

Feed-in Tariffs (FiT) Generation & Export Payment Rates* Installed capacity kW Hydro

Banding

Tariff p/kWh 1/4–30/6 1/7–30/9

≤100 >100≤500 >500≤2000 >2000

Solar** ≤10 Higher Middle Lower >10≤50 Higher Middle Lower >50≤250 Higher Middle Lower >250≤1000 >1000 Stand-alone solar PV**

7.68 6.14 6.14 4.43

7.66 6.13 6.13 4.43

4.32 3.89 0.74 4.53 4.08 0.74 2.38 2.14 0.74 1.99 0.74 0.74

4.25 3.83 0.68 4.46 4.01 0.68 2.32 2.09 0.68 1.94 0.68 0.68

Wind

≤50 >50≤100 >100≤1500 >1500

8.46 7.61 4.89 0.85

8.39 7.61 4.89 0.85

Anaerobic Digestion

≤250 >250≤500 >500

8.21 7.58 7.81

8.21 7.58 7.81

CHP

≤2kW

13.45

13.45

4.91

4.91

Export Tariff *Publication date: April 7, 2016. Source: Ofgem.

**FIT payment for solar photovoltaic installations have been determined by the Gas and Electricity Markets Authority (Ofgem) under Article 13 of the Feed-in Tariffs order 2012, in accordance with Annex 3 to Schedule A to Licence Condition 33. Source: Ofgem.

0.5

Offshore Wind

1.8

Onshore Wind

0.9

Solar PV**

1.8

Domestic RHI* Technology

Tariff p/kWh

* ROCs buy-out price set at £44.77/ROC by Ofgem.

Biomass boilers and stoves

5.20

** Small-scale solar PV (<5MW) closed as of 01/04/2016 and to additional capacity added to existing accredited stations that does not take it above 5MW in total installed capacity from that date.

Air-source heat pumps

7.51

Ground-source heat pumps

19.33

The availability of grace periods in line with those provided for solar PV projects above 5MW last year, enabling projects to be accredited up to 31/3/2017 where preliminary accreditation or significant financial commitments have been made on or before 22/7/2015, and for projects affected by grid delay. Source: Scottish Government.

Solar thermal

19.74

* Period: 01/04/2016 – 30/06/2016**. Source: DECC. ** If any new tariff changes are to be made due to degression, the next announcement by DECC would be by 01/06/2016.

Non-Domestic RHI* Tariff name

Eligible technology

Eligible sizes

Small commercial biomass

Solid biomass including solid biomass contained in waste

Tier 1 (<200kWth) Tier 2 (<200kWth) Tier 1 (≥200kWth <1MWth Tier 2 (≥200kWth <1MWth ≥1MWth All capacities Tier 1 all capacities Tier 2 All capacities <200 kWth <200 kWth ≥200 kWth ≤ 600 kWth

3.62 0.96 5.24 2.27 2.05 4.22 8.95 2.67 2.57 10.28 6.94 5.45

≥ 600 kWth

2.04

Medium commercial biomass Large commercial biomass Solid biomass CHP systems** Water/Ground-source heat pumps Air-source heat pumps** All solar collectors Small biogas combustion Medium biogas combustion** Large biogas combustion**

Solid biomass CHP Ground-source & water-source heat pumps Air-source heat pumps Solar collectors Biogas combustion

Tariff p/kWh

* Source: Ofgem.Tariffs that apply for installations with an accreditation date on or after 1/1/2016. ** Commissioned on or after 4/12/2013.

www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Summer 2016 | Page 15

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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

our experts Our energy experts can be contacted in the following 8 of our 11 offices: Aberdeen Tom Stewart 01224 860 714 tom.stewart@ckdgalbraith.co.uk Ayr Bob Cherry 01292 292303 bob.cherry@ckdgalbraith.co.uk Cupar Mike Reid 01334 659 984 mike.reid@ckdgalbraith.co.uk Edinburgh Anneka Fraser 0131 240 2280 anneka.fraser@ckdgalbraith.co.uk Inverness Dougal Lindsay 01463 245 380 dougal.lindsay@ckdgalbraith.co.uk Perth Calum Innes 01738 456 075 calum.innes@ckdgalbraith.co.uk GALASHIELS Harry Lukas 01896 662 829 harry.lukas@ckdgalbraith.co.uk Stirling Richard Higgins

01786 434 625

richard.higgins@ckdgalbraith.co.uk

For a full list of our energy experts go to our website or see our guide to Whoâ&#x20AC;&#x2122;s Who in our Energy team.

Offices across Scotland | Sales & Lettings | Farm & Estate Sales & Acquisitions | Property & Land Management Subsidy Trading & Advice | Rural | Energy | Forestry | Commercial | Sporting | Agricultural Loans

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