Key points to consider ahead of renewable energy investment

Landowners and farmers who shelved renewable energy projects due to a lack of grid capacity are being urged to seek an update on their local network status as connection status could have changed.

Grid connectivity is continually being improved across the UK therefore projects that were once unviable could be worth revisiting, advises Brown&Co energy manager Henry Haworth.

During a recent Brown&Co podcast with Olivia Burfoot, one of the firm’s agri-business consultants, Henry said a lot of work had gone into upgrading the grid and there was also additional capacity provided when projects dropped out.

“While you might have been told in the past that you can’t get a grid connection this could have changed,’’ he said.

“Always consider that you could now get a connection – it’s all about timing and often having the right contacts at the grid who will guide you correctly on whether you can get a connection.’’

A connection makes a renewable project far more financially viable, although for farm-based renewables, maximising onsite usage is key.

Currently, farmers will receive 5-7p/kWh for electricity exported compared to paying 20-25p/kWh for imported power. 

“There is clear benefit to clients to have as much onsite usage as possible,’’ said Henry.

When power is generated also needs consideration, he added. “It is quite obvious that solar will be generated during the day, wind is a little more uncertain and anaerobic digestion (AD) is a constant generation.’’

Instead of progressing forward with a hardware provider that is generally reassuring that their technology will offset a farm’s needs, Henry recommends more detailed modelling to ensure the renewable is the right scale for the site. 

“We experience lots of sites where too much or too little renewable been put in and adjustments have to subsequently be made – and that is costly.’’

Solar, wind and AD are the three principal technologies utilised by Brown&Co clients, either onsite schemes for those wishing to produce their own energy or larger, rental schemes

Each technology has its peaks and troughs, often dictated by government policy announcements.

Currently, solar for on-site energy generation is a growth area, driven by advances in the renewables sector which mean the capital cost of photovoltaic (PV) panels is now lower.

“The key thing with solar is ensuring that clients offset their own power rather than export it all to the grid,’’ said Henry.

Roof-mounted solar up to a certain size, unlike a ground-mounted array, doesn’t require planning permission.

Planning is an important consideration for wind energy though as changes to government policy make it difficult to secure consent.

But for large scale sites where landowners secure rental agreements with developers, there is growing interest.

“That is because there have been allocations within the grid to allow wind energy - in the east of England for example there is a big allocation towards wind whereas solar allocation is already accounted for,’’ Henry pointed out.

“Wind has got a big allocation that has not seen the development in the pipeline so that is something that will be really interesting in the next few years.’’

The Green Gas Support Scheme is driving many AD developments.

This subsidy scheme is due to end on 31 March 2028 but there is a strong possibility that it could be extended.

“At the moment we don’t see the potential for any new sites to get planning permission in time for the current scheme but if there is an extension it would give it a new lease of life,’’ said Henry.

He doesn’t anticipate a return to government support for renewable energy generation, Feed in Tariffs (FiTs) for example, because projects are currently viable without public subsidies.

For AD, Henry added: “It hasn’t quite got to the level that it is viable to develop without the subsidy and we do still need green gas so it is likely that the subsidy scheme will be maintained for a bit longer.’’

While there may not be central government support for solar and wind, regional-based grants are often available, in Yorkshire for example where solar developments have received grant support.

Henry anticipates growth in regional grants. 

“Councils have a need to decarbonise in their areas and we are likely to see regional grants come into play so it is always worth keeping a look out for those, calling your local consultant who keeps an eye on these things to check which grants are available.’’

Brown&Co’s work on carbon reporting has largely been around feedstocks for AD in the last decade - calculating how much carbon is associated with growing a feedstock to ensure that the gas being generated produces less carbon compared to gas imported from the North Sea. 

In recent years, the issuing of land carbon credits has gained momentum. This involves a farm being assessed for the amount of carbon it produces and its potential for soil sequestration and a baseline then set. If additionality can be provided, credits can be issued.

“A tonne of carbon is effectively the same as a single carbon credit and these can be sold in the market to high carbon producers, and there are lots of big businesses that are really keen to invest in these,’’ said Henry.

Recently, Brown&Co released a three-tier system for carbon reporting on behalf of clients.

The first tier involves an audit to assess the carbon status of a business.

“The next tier is to calculate, verify and sell credits,’’ Henry advised. “And the higher level is when businesses in general, not just farming businesses, look at the supply chain also for more detailed carbon reporting.’’

Carbon reporting and renewable energy generation interlink, he added.

“If you have a business that might have requirements either from within your sector or from government to reduce your carbon emissions, and you have been set a threshold, renewable electricity on-site is a key way that can be used to reduce that carbon output, they tie together nicely.

“It is an area of work we are seeing more and more interest in. While there is little government support currently, there is a private market and the projections for carbon itself as a sector is that it has got to that tipping point where it is going to get much, much bigger very quickly.’’