Proposed reforms to the national grid connection process mean demand from renewables developers for land rights is set to increase massively. For landowners, it opens a new set of opportunities which could be transformative for their businesses.
Last year, there was an amnesty for developers who secured a grid connection but did not feel they could deliver a project. This freed up the grid and potential new large-scale battery projects for our clients, but more needed to be done.
Unblocking what has become known as ‘Zombie Projects’ (where developers are holding the grid with little imminent intention to develop) is now the number one priority for the National Grid which has a massive queue of applications seeking grid connections (circa 800GW).
The National Grid package of reforms (known as TMO4+) is currently in stakeholder engagement, with a ‘go live’ date planned for January 2025.
The National Grid’s guiding principle is ‘first ready, first connected.’ The reforms aim to streamline the grid application and allocation process, weeding out stalled projects and identifying those that will deliver faster connections to a better infrastructure that is a secure, affordable, Net Zero energy network.
Throughout the application process, developers must continually demonstrate their progress, or they will be removed from the application queue, freeing up capacity that can be reallocated to projects advancing towards construction.
What does it mean for landowners?
The key message is that developers will be pushing landowners to agree terms for land rights at an early stage in their project, to secure their grid offer and advance a connection date. They will be asking landowners to sign up to the project with various documents, namely a Letter of Authority, Heads of Terms, and an Option Agreement.
Do not sign anything without taking professional advice
It is imperative that landowners take professional advice from Land Agents (and their solicitors) who have significant experience and knowledge in this sector before signing any such documents, to assess your options.
- You may have the opportunity to talk to more than one developer.
- Your Agent will understand and can explain the long-term implications of the development for your business.
- Your Agent will have sector knowledge of current market rates and is skilled to negotiate terms on your behalf.
Any credible developer seeking land rights will pay the landowner’s (or secure tenant’s) reasonable costs for taking surveyors and solicitors and sometimes accountant’s advice to secure a development deal.
D&R has been acting for clients in this sector for decades and our agents are well placed to advise landowners. We work in tandem with landowners’ solicitors and accountants to produce the best outcome should they be approached by a developer with a proposal for a Renewable or Energy project.
If you are approached by a developer, please do not sign anything without speaking to us first. We can help you negotiate the best deal for your business.
Contact Derek Bathgate, Director, and Head of Regions on 01292 265 851, or Ian Austin, Director, and Head of Utilities Energy and Infrastructure on 0131 449 6212.
