Exploring Challenges and Benefits of Renewable Energy

Renewable energy has been an established part of farmers’ land use mix for many years now. Land managers are familiar with government incentives, such as Renewable Obligation Certificates (ROCs), Feed-In tariffs (FiT) and the Renewable Heat Incentive (RHI), which encourage greater uptake and power output to help Scotland transform its energy supply mix. While it has been a source of income for some, it has also been a source of frustration for others.

A postcode lottery of planning authority views and grid connections have placed a big question mark over renewables at scale. Alongside this there have been feelings that land which could be growing food for human or livestock consumption is now growing crops for energy such as anaerobic digestion.

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In the early days we also saw difficult decisions as to whether to partner with larger firms to provide capital in return for use of the land, or whether to push the boat out and enter into a sector many knew little about. This led to deals being agreed which were not in the best interests of the farmer, down to an imbalance of knowledge in the transaction.

Thankfully the market has matured, good advice is available and we see better agreements being made, often with the option to provide capital or just to provide the site for generation. For larger users of power, such as cold stores and dairies this has been a huge benefit in terms of reducing energy costs more recently.

Whether it is large scale wind, or small-scale hydro, it is clear farmers and landowners are contributing as key delivery partners to the Scottish Government renewable energy targets, which are a vital part of the binding commitment to reach Net Zero by 2045. While this will continue to be the case, it needn’t be a major point of conflict with agriculture and food production.

Land which is managed for energy can also have a beneficial impact on agriculture, or at worst a minimal negative impact. Land can have many uses for different outcomes simultaneously, if it is managed in an integrated way. We have already seen the growth of energy crop for biogas plants – the biggest fear of these plants out-competing traditional crops for land have not been as severe as feared by many, with some benefits of better varieties for livestock feed and bedding, options for rotations and availability of digestate.

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Stronger prices in recent years have prevented a loss of too much arable area to this, but this may again come under pressure in the future.

According to the Scottish Energy Statistics Hub, half of the renewable capacity in Scotland comes from large installations of over 50 MW (8.1 GW in total). However, a total of 1.3 GW comes from small-scale installations of less than 5 MW. These projects are no less important as they contribute to the development of smart, decentralised and local energy markets in Scotland.

When looking to have more renewables installed on farms, one of the main issues has been the disconnect between the Scottish Government and the renewables industry which needs to be remedied so that capacity targets are achieved. The planning process is always the first in line for criticism, and while the National Planning Framework 4 could, and should, be a game changer for the sector, without improvements to the resourcing of local authority planning departments there is unlikely to be a dramatic change to the pace of the planning application process anytime soon.

Nevertheless, there is a glimmer of hope with the proposed changes to the Permitted Development Rights for certain smaller electricity undertakings. These changes are under consultation now and even if Parliament agrees to them, it will still be some months before any improvements are felt.

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Upgrading the national grid is essential and could create economic growth, both at a local and national scale, including the opportunity for an alternative source of income for generators.

However, the upgrading brings more controversy. The challenge lies in terms of the financial, visual and environmental impact of the proposed larger overhead lines and the “sterile zone” that run beneath.

While the highly regulated transmission owners, who are required by Ofgem to roll out the upgrades in a way that the taxpayer gets best value, there is a growing campaign championed by those that feel that the approach adopted has little regard for the impact on those involved. So while the ability to move energy around from where it is produced to where is can be utilised - which benefits both parties - is essential, there are legitimate calls for better investment in the transmission lines so that more sympathetic measures can be undertaken to reduce the impact on businesses and communities.

Better communication and consultation is essential to look to find workable solutions which minimise disruption. Undergrounding is one option, however it is not without its own environmental impact and is very costly.

Scottish Land and Estates welcomed the recently published report by the Electricity Network Commissioner, Nick Winser. He acknowledges dramatic improvements are needed to the grid upgrade process.

His recommendations include greater strategic planning and community acceptability, along with streamlining planning consent and regulatory approval. If implemented, these measures will provide better compensation to reduce widespread opposition to projects, while also streamlining the planning and regulatory process. Which can only be a good thing for all involved.

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Moving from a government incentivised model to one where there is sufficient market return has meant a change in dynamics in the market, and this has been aided by high power costs reducing payback times. The Scottish Government is taking a “Community Wealth Building Approach” to economic development.

This means that communities around larger scale projects should see a tangible benefit and have a growing influence on the economy around them. This could see a Bill in the coming year which could have a major impact on large scale renewables projects. It is essential that the economics of these projects are well understood, along with expectations managed to prevent ill feeling or a feeling of missing out. As with any large scale capital project, it brings with it a degree of risk and this must also be considered.

Renewables are essential for many land based businesses and currently they are the main plank of Scotland’s energy security strategy. We therefore have to ensure they are workable for all. Land in Scotland is under huge pressure to deliver on multiple fronts. Getting the right balance is crucial to ensure we produce enough energy, food & fibre as well as enhancing biodiversity and sequestering carbon. It is not an easy process but we have to view all of the outcomes in the round to succeed.