In the UK, the switch from fossil fuels to renewable energy sources is accelerating rapidly, and the adoption of the National Planning Framework 4 Policy (NPF4) means Scotland actively promotes renewable energy and the government’s net zero target. It is no surprise that developers and operators are still approaching Scottish landowners seeking Battery Energy Storage System sites.
It has been widely accepted that Battery Energy Storage Systems (BESS) will be paramount to building a resilient, reliable, and affordable grid network that can handle and store renewable energy like wind and solar, discharging it into the grid network when required. Whilst this is still the case, we expect other technologies entering the market will become increasingly important.
It is also worth noting that given the current restriction in the network, the mass influx of activity will reach saturation point until further electrical infrastructure work is completed.
Kirsty Barr, Graduate Surveyor at D&R, has been working closely with landowners and said “The BESS market continues to evolve, with large-scale BESS electricity units now traded on markets similar to other commodities.
“The advancement of BESS technology with data management, AI and machine learning, now enables operators to have complete control of the discharge and recharge of the batteries. It also allows them to forecast the most efficient time to discharge the battery into or recharge it from the grid, maximising operational use and thereby profits.
“We envisage demand for BESS sites will continue in the immediate future, however as the policy will have to be adopted into the Local Development Plans, there may be a lag period between negotiating Heads of Terms to actual signing of Option Agreements.
“The BESS developers will be watching how the adoption of NPF4 pans out with and between local authorities.”
The rental values for BESS long leases can be phenomenal from relatively small areas of land (3-5 acres provides a viable site), but it’s all about location-location-location, i.e., proximity to an electricity network operator substation.
Davidson & Robertson has previously urged landowners to seek advice in the first instance, before signing any agreements. It is now becoming more imperative that landowners are well represented by an agent that can deliver solid and robust lease terms with rents that reflect the current and developing market.