Failure to check energy potential of land could cost millions
Press release issued on 13 December 2018
This post was updated: 14 September 2022
Land agents and farmers who are buying and selling land should ensure they check the potential for energy projects before proceeding, to avoid missing out on valuable contracts.
The value of land which is suitable for generating or storing renewable energy could be considerably higher than land which does not have such capacity, explains independent power and energy consultant Roadnight Taylor.
“We recently had a case where a large land agent was selling land for a client and wanted to check if there was an opportunity for a high value energy scheme,” explains director Hugh Taylor. “The client didn’t want to pay the £350 for a survey (our price at that time), so it wasn’t carried out. Within a week, we were approached by a prospective purchaser to carry out our Stop/Go study on the same land, which revealed there was 20MW of grid capacity available for battery storage.”
At the time, such a scheme was worth around £60,000 a year in rent for the next 30 years, potentially adding about £1.5m to the value of just an acre of land, he adds. “On the day the purchaser completed the sale we submitted their grid application and secured them an incredibly cheap 20MW connection offer.”
This case demonstrates the importance of carrying out such studies when buying or selling land, explains Jeremy Moody, secretary and adviser to the Central Association of Agricultural Valuers. “Land prices can be significantly affected by genuine renewable energy opportunities. While sellers and purchasers often consider whether there is potential for planning permission to develop land or buildings, they shouldn’t forget about possible energy projects.”
It’s also not just land which might be affected, adds Mr Taylor. “Commercial sites with large warehouses or offices, industrial and retail estates all have potential for renewable energy generation.” However, there is more to a suitable site than its location – the local energy grid capacity is critical to the likelihood of success, as there is such limited availability.
It’s therefore important that landowners act fast to secure capacity if it is available, he warns. “Whether you are buying, selling, or acting on behalf of a client, it’s vital that you undertake due diligence by carrying out an energy survey – failure to do so could cost you £millions.”