Galbraith Energy Matters Spring 2014

Energy

ISSUE 5

matters

Spring 2014

Sharing the profits from renewables Feed-in Tariff update One farm and its turbine Tackling fuel poverty Opening up the Borders

Meters on the border?

What Scottish independence might bring

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WELCOME

CONTENTS

Hydro valuation: a crucial decision

4 Feed-in Tariff

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n September 18, 2014 Scotland will go to the polls for a referendum on independence. In November the Scottish Government published a White Paper* to address all matters they believed would impact on Scotland as an inde­ pendent nation.

update

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Regrettably the document raises more questions than it answers and those questions highlight significant risks to Scotland’s economy and people.

undamental issues about how hydro electricity generating schemes are valued were raised at a recent Valuation Appeal Committee in Tayside.

At present these schemes benefit from Renewable Energy Relief which exempts them from paying business rates, but these provisions may be subject to review.

The appeal raised important issues about the valuation of plant and machinery which could not be resolved by negotiation. It concerned six hydro generating stations in Perthshire and centred round the ‘tools of the trade’ exception in the ‘Plant & Machinery Order’ where power generated is for consumers.

The appellants contended that the subjects to be valued comprised the land and water assets used by the scheme, together with any buildings.

The assessor’s view was that virtually all the generating plant should also be included in his valuation. This difference of approach resulted in the appellants seeking a reduction in value of roughly 50 per cent.

As we went to press, the committee had announced that it upheld the appeals. The written decision is still awaited, and the assessor will be able to appeal against the decision, so the final outcome is yet to be determined. Whatever happens, this appeal will have significant consequences for hydro schemes.

Calum Innes, Partner

CKD Galbraith is Scotland’s leading

5 Fighting fuel poverty

6 How communities

can share the benefits of renewable projects

turbine project

10 Making the

Borders more turbine-friendly

11 Scotland’s potential for solar power

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.

Follow us on Twitter: @CKDGEnergy

The grid operates as a GB-wide trans­

“

The question is what happens if an energy partnership cannot be agreed?

Who will pay for the difference in cost and how will it be calculated?

8 One farm’s wind

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 14 offices throughout Scotland.

Our associate, CKD Kennedy Macpherson, is based in London.

Looking specifically at electricity transmission, at present Britain’s grid is effectively split into three ownerships.

National Grid plc owns the system in England and Wales; in Scotland the grid is divided between SSE plc and SP Energy Networks (part of Scottish­ Power Ltd) with SSE owning the north­ ern element and SP Energy Networks the southern and central parts. National Grid is the system operator for the whole of the UK.

Energy Matters is produced by Allerton Communications, London, UK. Designed by George Gray Media & Design, St Andeux, France. Printed

by Connect Publications, Mile End, Seedhill Road, Paisley PA1 1JS, UK. © CKD Galbraith LLP.

mission network and is inextricably linked to ensure a stable and balanced supply of electricity. Northern Ireland has its own transmission network owner and operator, in the form of Northern Ireland Electricity, which is separate to National Grid plc but which does have an interconnector allowing “spare” electricity to be transmitted between the networks.

The White Paper blandly states that achieving security of supply for Scottish custom­ ers is a central priority for an independent Scotland. It suggests that so long as security of supply is not jeopardised, Scotland will

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ENERGY MATTERS Spring 2014

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Power struggle We’ve heard talk of Scottish independence leading to electricity meters on the border. Richard Higgins brings some clarity to a thorny issue. continue to participate in the UK-wide market for electricity (and gas) to reflect the integrated transmission networks. It goes on to state that continued participa­ tion within a single UK market is in line with increasing integration of systems across Europe. These are laudable words, but they offer no confidence that it is in fact achievable.

As part of the process of independence, the Scottish Government plans to establish an energy partnership with West­minster to ensure the longer-term interests of an independent nation are represented. The Scottish Government has clearly stated its target to make Scotland self-­sufficient in renewable energy with renewable assets meeting 100 per cent of demand by the year 2020.

Whether that target is achievable has yet to become clear.

In the interim, clear indications that Scotland will follow a non-nuclear energy policy, the closure of Cockenzie coal-fired power station and the ageing of other fossil­-fuel and nuclear power stations, suggest there is a risk that the nation could suffer significant electricity shortages in the medium term. We think that risk is significant and has the poten­ tial to discourage business and economic investment, resulting in a short term knock-on effect on economic recovery.

The White Paper offers no guarantee that an energy partnership can be formed, or any detail of what the real implications of such an agreement might mean. It offers only one side of the discussion, and even this is thin on detail and ignores the other, somewhat larger, party.

It doesn’t take a great leap of imagina­ tion to see that these uncertainties raise potential risks for the independent nation, with possible differential electric­

ity markets creating additional tensions and costs, which will inevitably fall to the consumer.

We are told that Scotland is already a net exporter of electricity, but, with a reduced generating capacity from traditional fuels, it is conceivable that it could become necessary to import power in the future, particularly due to the lumpy nature of renewable generation.

The West Coast HVDC link, a power transmission line between Hunterston and the Wirral peninsula, combined with the East Coast HVDC link between Peterhead and North-East England, will enable significant quantities of electric­ ity to be transmitted between Scotland and England and Wales in conjunction with the existing integrated transmission network.

The balance of power, one might say, politically, as well as in energy terms, is finely tuned between Scotland and the rest of the UK. The question is what happens if an energy partnership or other arrange­ ment cannot be agreed? Who will pay for the difference in cost and how will it be calculated? Will we need virtual meters at the border? What will be the medium to long-term impact on Scottish energy policy and the economy? We will con­ tinue to watch the developments in the independence debate and seek additional clarity during the course of 2014. *S cotland’s Future 2013 (http:// www.scotland.gov.uk/ Publications/2013/11/9348/0) Richard Higgins is a partner at the Stirling office of CKD Galbraith. richard.higgins@ckdgalbraith.co.uk 01786 434625

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ENERGY MATTERS Spring 2014

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The fluid world of Feed-in Tariffs Keeping tabs on subsidies for renewable energy projects is not easy. Mike Reid provides an update.

Such decisions may also be influenced by opponents of wind power, who become ever more vocal.

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Taking a long view is all the more difficult considering the time needed to obtain planning consent and grid connections for some sites. Projects cannot obtain pre-­ accreditation to lock in to FiT rates until planning consent has been obtained and a grid connection has been paid.

he system of subsidising investment in renewable energy production in Britain is well established. But don’t expect any let-up in changes to the detail.

Subsidies for medium to smaller scale renewable schemes are normally funded under the Feed-in Tariff scheme but these rates are now subject to ‘degression’, a system aimed at ensuring subsidies don’t prove too much of a burden on the public purse.

The deployed capacity figures to Decem­ ber 31, 2013 have just been published so

we know that degression rates will apply according to Table 2 below.

There will be a 20 per cent degression for all wind turbines commissioned after April 1, 2014, unless they have been pre-accredited.

The effect of degression is that typical returns will reduce from their current lev­ els but wind power should remain a good investment for the moment.

Meanwhile, developers and landowners should remember that further changes are inevitable as the Westminster Gov­ ernment seeks to control national debt.

The position remains fluid, so look out for further updates in the next issue of Energy Matters.

Mike Reid, a partner in CKD ­Galbraith, is based in Cupar. mike.reid@ckdgalbraith.co.uk 01334 659984

Table 1: Degression points Level of annual deployment (January-December) required to prompt degression Degression band Max

Hydro deployment in 12-month Wind period (kW)

AD

2.5%

5%

10%

20%

All

<=12,500

>12,500 - 25,000

>25,000 - 50,100

>50,100

0-100kW

<=3,300

>3,300 - 6,500

>6,500 - 13,100

>13,100

n/a

>0 - 36,700

>36,700 - 73,400

>73,400

0-500kW

<=2,300

>2,300 - 4,500

>4,500 - 9,000

>9,000

>500-5000kW

<=19,200

>19,200 - 38,400

>38,400 - 76,900

>76,900

>100-5000kW

Table 2: How degression will affect different energy sources

Deployment period to date

Number of installations

Aggregate capacity deployed in period (kW)

Comment

Hydro All Jan 1 - Dec 31 2013 141 20,348

Deployment levels in 2013 have exceeded the minimum (12,500kW) to trigger a 5% degression.

Wind 0-100kW Jan 1 - Dec 31 2013 665 26,060

Deployment levels in 2013 have exceeded the minimum (13,100kW) to trigger a 20% degression.

>100-5000kW Jan 1 - Dec 31 2013 172 109,917

Deployment levels in 2013 have exceeded the minimum (73,400kW) to trigger a 20% degression.

AD 0-500kW Jan 1 - Dec 31 2013 35 14,442

Deployment levels in 2013 have exceeded the minimum (9,000kW) to trigger a 20% degression.

>500-5000kW Jan 1 - Dec 31 2013 15 21,276

There will be no degression for this band as the tariff for the >500kW-5MW installations is set at the Renewable Obligation equivalent level.

Source: www.gov.uk/government/statistical-data-sets/monthly-mcs-and-roofit-statistics

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ENERGY MATTERS Spring 2014

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Energy initiative brings a very welcome bonus Harry Stott outlines the factors influencing fuel poverty and how the Scottish Government is tackling it. There can be unexpected benefits.

Key points that determine fuel poverty Low household income: The costs of heating a property forms a greater proportion of total income for those on low incomes.

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Fuel costs: Higher prices reduce the affordability of fuel.

Prices of different types of fuel can vary considerably, as can the availability of different fuels in different areas, and of different types of heating systems. This affects the ability of consumers to exercise choice.

y wife and I bought a house in a suburb to the west of Edinburgh city centre in the middle of last year. The house was a bit of a project as it had not been modernised since the 1970s and required complete stripping out, a new kitchen, a new bath­ room and a central heating system.

As part of the works I applied to Scotia Gas Networks (SGN) for a new gas con­ nection. I had made an allowance for this in our overall budget, and I was prepared for the worst when I called SGN for an estimate. So it was a pleasant surprise to be told that the property was in a fuel poverty area and that the connection charge might be significantly discounted — or even free.

Sure enough, the quote came through the next day as zero, saving about £1,000. This was a real bonus in a costly project where every penny counts!

This experience aroused my curiosity about the criteria for a new connection

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Energy costs took up more than 10 per cent of household income in 27.1 per cent of households.

allowance. I discovered that there was an initiative supported by the energy regulator, Ofgem, called the Fuel Poverty Scheme, designed to facilitate connections to customers who are classified as being in fuel poverty. People may be eligible for funding towards the cost of a gas connec­ tion if they satisfy any of the following criteria: • They are receiving certain benefits that

Energy efficiency: The energy efficiency of the building and the efficiency of the heating source determine the amount of energy that must be purchased to heat the home adequately.

satisfy the measures under Warmfront (Scotland) or Energy Assistance Package (England).

• They fall within the priority group — low income households or over 70 years of age — for measures under the Carbon Emissions Reduction Target (CERT).

• They are classified as being in fuel pov­ erty, spending more than 10 per cent of their disposable income on all house­ hold fuel use.

• Their site postcode falls within an area covered by the Scottish Index of Multiple Deprivation (SIMD) or, in England, the Index of Multiple Deprivation (IMD).

It just so happened that we qualified because our postcode is within an area identified as deprived in the SIMD. This was an unexpected benefit for us, but fuel poverty is a significant issue that the Scot­ tish Government is trying to tackle.

In December 2013 the Scottish House Condition Survey found that more than a quarter of Scottish households lived in fuel poverty in 2012. Energy costs took up more than 10 per cent of household income in 27.1 per cent of households.

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Some MSPs have expressed concern that fuel poverty should be such a big issue, given Scotland’s richness in energy, and said more needs to be done to help home­ owners in the face of increasing energy costs.

The Scottish Government aims to ensure that by November 2016 no-one in Scotland will be living in fuel poverty thanks to initiatives like the Home Energy Effi­ ciency Programmes for Scotland, areabased schemes delivered by local authori­ ties to provide energy efficiency measures to a large number of households.

This may go some way to tackling fuel poverty in Scotland, but, in light of the recent price rises announced by major energy providers, the target of freeing the country of fuel poverty by the end of 2016 is likely to come under ­increasing pressure.

Harry Stott is a commercial property and development specialist at CKD Galbraith’s Perth office. harry.stott@ckdgalbraith.co.uk 01738 456 065

ENERGY MATTERS Spring 2014

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Renewable energy: Neighbours invest in turbine venture A farming family wanted to ensure success for their wind-power project — so they set up a co-op to let local people participate. Calum Innes reports.

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Scottish farming family behind a renewable energy project is offering shares in the venture to ­local people. Revenue generated by the project will be ploughed back into the local community.

The project was begun by Dingwallbased father and son team David and Richard Lockett, looking to use their farm’s natural assets.

During their investigation into the feasibility of building a wind turbine, Mark Jennison, their project manager from the Realise R ­ enewables consultancy, introduced them to the concept of financing and running the project using co-operative ownership, rather than a conventional bank loan, so that the benefits could be spread throughout the local community.

Over a period of a year, the pair gained planning permission, formally created the necessary co-operative society and obtained a grid connection offer.

The ­society began to offer shares in the pioneering scheme last autumn, focusing on attracting local, long-term shareholders. Members can get involved for as little as £250 or invest up to £20,000, with their shares forecast to earn annual interest of 7.4 per cent. The co-operative will also create a community fund to which it will contribute at least £2,000 per year.

The Dingwall Wind Co-op share offering has attracted a lot of interest. At the time of going to press Richard Lockett advised: “The co-op has so far raised nearly £600,000 of the £856,000 needed.

The vast majority of members are local and it would be great if we can keep it that way.”

His father added: “As the first group to do this in Scotland, we felt we were sticking our necks out, but we feel that everybody should be able to share the benefits of renewable energy and we are hugely encouraged by the way it has been received. Perhaps this will start a trend.

“We obviously see it as a great investment and a chance to share in the profits of a local wind turbine.”

The majority component of the turbine’s projected revenue stream is Government subsidy in the form of a Feed-in Tariff, essentially a guaranteed price for each kWh generated by renewable sources, and that tariff, being Government-set, could change in the future. However, current policy means that a project tariff, once set, is guaranteed for its duration, so energy generated throughout the turbine’s lifetime will receive the same rate of subsidy.

Projected rates of wind cannot of course be guaranteed, though the co-operative’s directors have digitally modelled wind flow over the next 20 years, and are confident it will remain reliable.

The scale of the project — a single 250kW turbine — means the electricity generated by it, although fed straight into the local grid, will make only a very minor contribution to overall usage.

Still, the achievement remains: the group have created Scotland’s only 100 per cent community­-owned turbine. In the process they have avoided creating an estimated 240 tonnes of CO2 a year, and they have given locals an opportunity to invest in their community.

Calum Innes, based in Perth, is head of CKD’s energy team. calum.innes@ckdgalbraith.co.uk 01738 456 075

Community project: On the site of the wind turbine at Knockbain, near Dingwall are, from left, David Lockett, local investors Miles Davis, Dennis Overton and John M ­ ackenzie, and Richard Lockett. Picture: Ian Rhind

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ENERGY MATTERS Spring 2014

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sharing the profits The benefits are blowing in the wind Robert Patrick looks at the practicalities of community payments from developers.

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he distribution of funds from wind farm d ­ evelopers to communities has become increasingly commonplace in recent years. More than £5m was paid to communities across Scotland last year, according to trade body Scottish Renewables.

This growing importance of this trend was emphasised by the publication in November of Scottish Government good practice guidance for community benefit payments. This builds on an earlier pro­ tocol produced by Scottish Renewables and aims to provide increased clarity on the issue.

It is important to be aware that these payments are unrelated to any planning obligations which may be imposed on a development. These are usually governed by a Section 75 agreement and relate to the specific impacts of the proposal, such as road or infrastructure upgrades. A community benefit payment is not for­ mally linked to planning consent in this way — it is a voluntary payment by the developer in order to provide a benefit to communities affected by a proposed wind farm.

The Scottish Government is keen to ensure that community benefit pay­ ments are not seen as a ‘bribe’ to prevent objections. The guidance is clear on this: benefit payments should not rely on sup­ port from the community for the devel­ opment. For developers, it is important this is made clear when entering into discussions with the community.

Developers can make payments using a number of established mechanisms. In many cases, particularly smaller-scale ­developments, a payment will be made

Restored: Aberfeldy’s The Birks Cinema.

to the local community council, which will decide how to distribute the funds.

Another option is for a developer to provide funding to a local community group, such as a development trust or community interest company.

A popular choice, particularly for large developments, is to set up a community fund. This can be administered by the developer, by a third party such as Foun­ dation Scotland, or by a local group. The fund co-ordinators are responsible for

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The Government is keen to ensure that payments are not seen as a ‘ b ribE ’.

distributing income to local causes, with the developer often stipulating the type of project to be funded.

An example of this approach is Aber­ feldy, where the Friends of the Birks Cinema were awarded £100,000 from a community benefit fund towards the ren­ ovation of a derelict art deco cinema. The restoration was completed last year and the town now enjoys a 100-seat ­digital 3D screen with a 64-seat ­restaurant and café-bar.

In some areas, local authorities are now overseeing the whole process, with developers paying the fund direct to the authority, which then distributes it according to its own protocol. Highland

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Council is an example of this practice.

It splits the funds it receives three ways between the area immediately affected, the wider local community, and an authority-wide community fund.

Whichever method is adopted, a key concern will be deciding a fair level of payment. The Scottish Government’s guide suggests a minimum payment of £5,000 per MW of electricity produced.

This is also in line with the proposal put forward by Scottish Renewables. How­ ever, our research shows that it repre­ sents a considerable increase on current levels of payment. ­ sing the Scottish Government spon­ U sored Community Benefits Register, we analysed existing payments and found that the average annual payment across 58 wind farms larger than 5MW was only £1,728 per MW. So a move towards an industry-wide minimum of £5,000 per MW will require considerable investment from developers.

Whatever the level of contribution, it is clear that community benefit payments need to be considered carefully by wind energy developers. A clear strategy is needed to ensure that the payment level and the means of distribution are fair for both developer and community.

Robert Patrick is a chartered planner at CKD Galbraith’s Perth office. robert.patrick@ckdgalbraith.co.uk 01738 456 078

ENERGY MATTERS Spring 2014

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Farming the W

hatever one thinks about individual forms of green energy, renewables are vitally important in protecting the environment and providing long-term cost stability and security of fuel supply.

Human activity has released large amounts of carbon dioxide and other greenhouse gases, mostly from burning fossil fuels to produce energy. These trap energy, causing the atmosphere to warm up. Not everyone agrees, but there’s an established scientific consensus that this leads to climate change, which in turn threatens not only ecosystems but also entire populations. Hence the need for alternative energy supplies.

We’re already living in the age of renewable energy. Global investment in clean energy was $254bn (£154bn) last year, according to Bloomberg New Energy Finance. While this was down from the record $317.9bn (£193bn) in 2011, it’s more than four times the 2004 total of $55bn (£33bn).

In three years, total electricity generated worldwide from wind, solar and hydro will exceed energy from natural gas, says the International Energy Agency. It adds that by 2016 green power is expected to provide twice as much electricity as nuclear plants and outstrip all other electricity sources except coal.

So while our growing thirst for energy won’t stop new spending on older technologies such as coal- and gas-fired power stations, renewables are the world’s fastest growing power source. As much as anywhere else, this is important in Scotland.

Total renewable energy investment was £1.57bn last year, according to Scottish Renewables, providing 11,136 full-timeequivalent jobs — both figures far greater, proportionally, than across the UK. Though responsible for two per cent of global carbon emissions, the UK is a leader in this revolution, with Europe’s largest market for offshore wind.

As technologies improve and fossil fuel prices continue their climb, green energy looks certain to become cheaper by comparison. While not without cost, renewables are a key weapon in fighting fuel poverty ­— and they reduce our dependence on energy sources requiring permanent waste storage.

Being produced locally, green energy brings security by lessening our reliance on fuel from politically unstable parts of the world, so the lights should stay on no matter what fluctuations occur in the commodities markets.

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ENERGY MATTERS Spring 2014

Case study: Renewable energy can cut carbon footprint and bring financial benefits to those involved. Identifying the opportunity is just the start. In the first of a series of articles, Mike Reid follows one project from the initial decision to meeting a developer.

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his is the story of a sin­ gle, farm-based wind turbine development, from conception to commissioning and beyond.

The land in question is 500 acres in Fife. Primarily arable, the property is let to a family farming company but effectively all in-hand other than some let cottages.

Having previously planted woodlands and hedges on our farm as well as having grass margins and creating a pond, we had always been interested in environmental works.

My parents installed a ground source heat pump more than 20 years ago and we have installed ground source heat pumps in two of the farm cot­ tages. Twenty-five acres of short rota­ tion coppice had been planted on the farm for biomass production in 2007 but other renewable projects had not been viable options.

In April 2010, the Feed in Tariff (FiT) commenced, prompting us to consider a small to medium-scale renewable project.

Several questions arose immediately: What technology to use? Would planning consent be granted? Would we be able to benefit from the green power generated or wouldn’t this be possible. Should we take full financial risk, share this with a third party, or lease the opportunity to a developer? www.ckdgalbraith.co.uk Twitter: @CKDGEnergy

wind Option 1: 15kw

Option 2: 500kw

Generation game: Mike Reid’s family farm in Fife offered two promising sites for wind turbines.

A large-scale wind farm was never feasible, due to nearby residential dwellings and proximity to the RAF Leuchars airbase. Hydro wasn’t an option and while solar power was a possibility, wind had more potential – but this of course requires wind speed.

Noabl, the Government-approved wind speed database, showed on its website

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To avoid relying solely on virtual assessments, we used a simple, cost-effective anemometer, cross-referencing with Met Office data to obtain physical information.

ments, we used a simple, cost-effective anemometer, cross-referencing with Met Office data to obtain physical informa­ tion. Taking readings five metres above ground, while not ideal, this instrument would estimate output to help us predict the turnover from any project as well as being helpful to support any bank loan required.

The anemometer was erected on a homebuilt metal mast, and took readings for a time before it blew down and the data card developed a fault.

Still, with only a few months’ readings, we had the impression the speed would be less than the Noabl figures indicated.

Meanwhile, we researched turbine types and obtained an estimate for installing a 15kW model at a cost of around £60,000 ex-VAT, with a predicted annual turnover of £11,000 to £12,000 based on the income from the FiT and the saving in electricity from our own usage.

an ­average 7.3 metres per second for the location, at 25 metres in height – certainly enough for a viable project, but was this reading reliable? It seemed rather high.

The return looked attractive and we were ready to proceed when we were approached by a developer who had identified some higher ground on the farm as suitable for a single turbine of up to 500kW. The developer, Temporis, would pay a rent and cover all the other develop­ ment costs.

To avoid relying solely on virtual assess­

The 500kW turbine would be up to 75

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­ etres to tip height compared to less than m 30 for the 15kW model, but would be fur­ ther away from the residential properties.

The rental return from the 500kW turbine was estimated to be around £35,000 per annum for no capital outlay. We could have opted to progress the 500kW project ourselves, but, with a capital cost of more than £1m and the planning uncertainty, we decided the risk was too great for the business.

Also, we were not certain we would pick the correct turbine for the longer term.

We therefore needed to decide whether to run the smaller project ourselves, progress the 500kW project with a developer or do nothing at all.

Among other factors we had to weigh up were the potential visual impact, noise, income, expenditure, risk and tax conse­ quences — let alone what the neighbours’ reaction might be.

To be continued...

Mike Reid heads up CKD ­Galbraith’s utilities department, with particular expertise in ­telecoms and windfarms. He is based in Cupar. mike.reid@ckdgalbraith.co.uk 01334 659984

ENERGY MATTERS Spring 2014

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Opening up the Borders The turbine-free zone in the southern Scottish Borders looks set to become smaller. Harry Lukas reports.

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he South of Scotland and over the border into the North of England is one of the few places in Britain to have very few wind turbines.

turbines on the seismic array, raising the prospect that further wind farms could be allowed without breaching the current noise threshold. As yet, no decisions have been made nor policy changed.

The main reason is that wind turbine development is restricted because of the Government’s seismic array at Eskdale­ muir, which tracks explosions and earth­ quakes around the world (see panel).

The other major constraint affecting the southern Borders is the RAF range at Spadeadam, involving radar and lowflying aircraft with access points over a very large area. Technological advances

In response to concerns over noise gener­ ated by wind turbines, an engineer­ing report commissioned a decade ago estab­ lished a threshold for additional distur­ bance, a turbine exclusion zone of 10km from the site and a 50km zone in which a certain tolerance would be allowed.

The wind resource in the area straddling the Border is very good.

Recently the Scottish Government set up the Eskdalemuir Working Group as part of its renewable energy policy to establish whether the original constraints were still appropriate. A further engineering report by the Ministry of Defence has established that the current model is likely to over­ estimate the impact of noise from the

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ENERGY MATTERS Spring 2014

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taking place in radar are expected in time to cope with the turbine blade movement, reducing the ‘clutter’ effect on detection systems.

The recent disclosure of the working group’s findings has generated consider­ able pre-scoping activity at many sites throughout the Scottish Borders and parts of Northern England that lie within the current restricted zone. The wind resource

in the area straddling the border is very good and with sensitive siting there is scope for further development should this be permitted.

As with all wind turbine projects, a huge amount of groundwork must be done before any such scheme is found to be possible or viable. Access may be needed over land with multiple owners, grid con­ nections may be distant and new routes may have to be agreed with many owners and stakeholders.

Environmental issues need to be assessed and other constraints — radar, telecoms, low-fly zones and scheduled monuments among others — all need to be checked in principle before any detailed work on preparing a possible project site for plan­ ning is begun.

Landowners are being approached by a variety of developers and agents and it is always sensible to take professional advice from the outset.

CKD Galbraith has a dedicated renewa­ bles team and can advise on projects large and small, access, grid con­ nections and all such issues.

Harry Lukas is a consultant at the Peebles office of CKD Galbraith. harry.lukas@ckdgalbraith.co.uk 01721 722787

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An ear to the ground for nuclear tests The Eskdalemuir seismic array is a system of linked seismographs arranged to track earth tremors around the world. It is run for the Government by AWE Blacknest, part of the Atomic Weapons Establishment at Aldermaston.

It was installed in 1962 as part of the first nuclear test ban treaty and is now part of the Comprehensive Nuclear-Test-Ban Treaty. At present, 161 of the world’s 183 countries have signed up to the treaty, and others are due to join shortly.

Around the world there are more than 270 certified monitoring stations, including 45 primary and 105 auxiliary stations. Eskdalemuir has recently been upgraded as one of the auxiliary stations.

The array at Eskdalemuir comprises two crossed arms of 11 sensors set at 1,000-metre intervals on an area of hill and forest ground near Eskdalemuir.

It monitors and records seismological signals arriving at the site and their time of arrival.

This data is compared with records obtained from similar stations around the world to determine the source of the signals.

Naturally occurring seismological events such as earthquakes can be distinguished from those which originate from artificial sources, such as nuclear explosions because they have a different pattern.

Seismologists can also discriminate between earthquakes and other signals such as quarry blasts and sonic booms.

Making electricity while the sun shines

Solar power can generate significant revenues for landowners. Sarah Tyson looks at the options.

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cotland has a similar climate and intensity of sun­ light to Germany, yet the latter is the European leader in solar power generation. Its installed capacity in ­September 2013 was 35GW, which equates to 328 square miles of solar panels or 0.24 per cent of the country’s surface area.

Scotland’s installed capacity is just 70MW — about 500 times smaller.

But developers are now looking to Scot­ land, which has less intensity of sunlight compared to the south of the UK but enjoys longer daylight hours.

Developers are generally looking at installing larger-scale sites on 20 or more acres, with some looking to build on more than 500. The minimum size is about 1MW, scaling up to 20MW. For a prime site, developers may offer option payments, and of course the rents payable to landowners vary with the quality of the site.

Solar farm rentals do show much better returns than conventional agricultural use, for little risk, and it may be possible to receive free or subsidised electricity for the landowner’s use as part of the package. Key factors for a good site are: grid connection, slope, shade and average sunlight. Solar farms are ideally suited to sites close to urban areas on level ground, and in addition these areas generally have good grid connectivity.

Initial outlay can be high — around £1.1m per MW or £185,000 per acre (roughly six acres per MW), but ‘payback’ — recover­ ing the full outlay — ranges from six to 10 years, which is attractive to those able to invest themselves rather than entering

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into a lease with a third party. Construc­ tion costs have decreased in recent years with better sector knowledge and more competition between firms.

Planning permission is generally easier to obtain for solar than wind projects, per­ mission normally being granted within a year.

Metal frames erected without concrete foundations should not require an Envi­ ronmental Impact Assessment (EIA) for planning, and the ease of removing these structures means the future use of the land, if currently arable, is not compro­ mised. Sheep can graze beneath the panels, providing an additional source of income from the area.

Landowners thinking of building their own small system to cover some or all of their electricity use will benefit from a higher Feed-in Tariff rate if the total installed capacity is less than 50KW. Small-scale solar developments are very practical for the landowner who stores potatoes or has a high summer usage, as this high electricity consumption coincides with high levels of solar power produced in the summer months.

To make the most of small-scale solar ­energy, the electricity should be used to enable both cost savings and the receipt of FiTs, which can also be tax efficient.

Sarah Tyson is senior associate and chartered surveyor at the ­Elgin office of CKD Galbraith. sarah.tyson@ckdgalbraith.co.uk 01343 546362 ENERGY MATTERS Spring 2014

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