Planning consent has been granted for what will be Scotland’s biggest solar energy farm when it’s completed. The ‘farm’, which will be in excess of 50MW with 80,000 solar panels across 47 hectares, is at Milltown near Elgin and represents a significant escalation in the size of solar energy projects being developed in Scotland.
Our renewable energy team worked with clients Elgin Energy to help obtain the planning consent necessary for the project’s development. The proposed solar farm dwarfs the 13MW solar development at Errol which Elgin Energy developed in 2014/15. The Errol project was energised in 2016 and is currently the largest operational ground mounted solar development in Scotland. Although there was some initial scepticism, the Errol development demonstrates that solar energy developments can be successful in Scotland.
Elgin Energy have adopted a long-term view on the deployment of solar technology in the UK and are constantly working to develop solar projects across the country and the rest of the UK and Ireland. Their current aim is to energise 1GW of projects from early 2020’s onwards.
But, to meet this ambitious target, Scotland will require more successful and viable solar farms. So, what exactly is required to create a successful solar site? This article will demonstrate the key attributes needed to do just this, address common concerns and will also explore the future of solar energy in Scotland.
What is required for a successful solar site?
The critical factor in deciding the location of a solar farm is access to and capacity on the grid. Without it, any project will be dead in the water - unless there is a large energy user nearby who is willing to purchase all the electricity generated “off grid” or by direct wire. Even then, funding of the project may be difficult given the uncertainty surrounding the long term bankability of the contract with the large scale user:
- they may not always be nearby;
- they may not be able to use all the electricity generated; or
- they may switch suppliers.
In terms of access, while it is preferable that the same landowner owns the entirety of the route from the solar development to the point of connection to the grid, it is not crucial. This is, however, assuming that the neighbouring owners are willing to grant rights for cabling to pass over their ground.
Capacity in the grid can also be a stumbling block. A number of current projects are likely to be delayed in entering the construction phase due to the significant works required to the electricity grid to allow it to cope with non-centralised energy generation.
The developer will look to reserve capacity in the grid at an early stage in the project and will then make regular payments to retain that reserved capacity until energisation of the project. These upfront payments can often be eye-watering amounts, and are often required before option agreements are signed with the landowner and planning applications are submitted.
Risks and costs
It’s also important to recognise the significant costs and risks associated with this process. The developer carries a significant risk in the early stages of the planning process. The landowner could change his mind during the negotiation process or planning authorities could refuse the application. There is now also the risk that the grid operators will take back reserved capacity if it is not utilised within a given period.
Costs can also be crucial in the planning process. The cost of the grid connection, including the reservation fees previously mentioned and any works required at the developer’s expense to upgrade the grid, will impact on the financial viability of the project. Only once all of these steps have been completed and it has been ascertained that grid capacity is available and can be accessed, can true consideration of the site itself begin.
Some landowners may be concerned that installing a solar farm will remove land from agricultural use but that is not the case. In relation to the Milltown project, a former RAF Airfield, the site will continue in agricultural use in the form of sheep grazing once the solar farm has been installed. Installations like the Milltown project provide both a secure revenue stream for farmers and also the opportunity to diversify their income.
Ground conditions are also often a concern in the planning stages of a solar farm. Preferably, the ground will be flat or gently sloping; south-facing sites are ideal but each new site can introduce a variety of challenges. Due to their expert stakeholder relationships and careful due diligence, Elgin Energy have been successful in overcoming these challenges across numerous projects. The Errol Solar Farm which is built on the site of a former clay quarry and slopes down to the River Tay is a notable example.
In many respects the documentation for a large scale solar development is similar to that for wind farms. The main differences lie in relation to the access needs for delivery of equipment to the site (the wider accesses and turning areas required to deliver wind turbines are not generally needed for solar projects), and the restoration of the site at the end of the development. As the ground below the panels has usually already been returned to agricultural use with well-established grass, the decommissioning and restoration may entail little more than disconnecting and removing the panels themselves.
The future of solar energy in Scotland
Since the Renewable Obligation Certificate (ROCs) renewable support scheme ended in March 2017, new renewable projects have to be large scale in order to be economically viable in the short term.
Depending on the cost of the grid connection and construction works required, it is thought that solar projects of 20MW and greater will become economically viable in the early 2020s. These solar farms are likely to require a corporate renewable power purchase agreement (PPA) to secure project financing and achieve energisation. Where the electricity is supplied into the grid, the difficulties identified above in relation to “off grid” sale are not so pronounced but they will still have an impact on the ability to secure project financing. At least with a PPA through the grid, if the purchaser terminates the contract for whatever reason the electricity from the project can be sold to a new purchaser.
Scotland has ambitious renewable energy targets and solar will be a key component in meeting these. However, further advances are required before construction of significant solar developments begins. We believe that solar will blossom throughout the 2020’s in Scotland as the conditions become more favourable and industry and government work towards a cost-competitive, low carbon future.