Articles and Industry News

August 2024

STRENGTH IN NUMBERS: LANDOWNER CONSORTIUMS AND RENEWABLE ENERGY SCHEMES

“Forming a proactive consortium with your neighbours can improve your clout during negotiations and attract developers seeking to install large-scale rural energy sites. It could also have the benefit of driving up rental incomes for all members”, says industry consultant Rob Paul, Director of RP Rural & Energy Ltd.

As renewable energy firms continue to seek out sites for development across the country, Shropshire-based consultants RP Rural & Energy Ltd are co-ordinating and advising several landowner groups nationally, with a view to bringing neighbouring land holdings together for presentation to developers as a single large-scale offering, rather than as individually negotiated sites. These groups can achieve a number of benefits to the landowners that would not be available to them on an individual basis.

“A multi-site proposal not only carries considerable attraction at scale, reflected in higher rents, but also brings with it the prospect of swift deals, something that developers are keen to seek out,” says Rob. “Offering a single point of contact for professional advice and legal representation reduces the likelihood of miscommunication between developers and landlords, and misinformation spreading within landowning communities in relation to the scheme in question or about competing schemes.”

Securing a swift deal with landowners will become particularly important in January 2025 when National Grid shake up the queueing system for connections. Rob explains: “Currently, it is a ‘first come, first served’ system, whereby whoever gets their grid connection application in first gets ahead in the queue. From January 2025, though, the grid connection applications system will change from to become ‘first ready, first served’, which means that a developer could effectively come from the back of the queue and leapfrog any underperforming competition if they can properly demonstrate that they have agreements with landowners and are preparing for planning. “

This change to National Grid connections and the strength of a landowner group helps to shift some control back to landowners to determine the best outcomes for their land. “Mutual vested interest in the success of a development will also result in consistent and standardised lease terms between members of the group, reducing pressure on any single landowner from a particular developer who may make claims about terms and deals agreed elsewhere, including with neighbours. All too often such claims can be misleading, but still serve to put pressure on landowners.”

In essence, landowners acting in a group as one, can cease dealings with a complacent developer who was perhaps first to knock on their door, and who may be proving difficult to negotiate with, and instead can offer their land to a developer of their choosing. Being part of a group taking such action, carrying economies of scale and being more attractive in terms of acreage, further enhances this prospect.”

Finally, Rob states, “there are plenty of good developers to choose from out there; the group should be able to select which developer they want to run with. This will be a judgement based on deliverability, experience, user friendliness, commercial terms, trust, and where the developer is in relation to grid connections, subject to the impending change.