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Renewables Roundup

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Welcome to the September issue of Anderson Strathern’s Renewables Roundup.

Our Renewable Energy Team here at Anderson Strathern continues to play a dynamic and innovative role in advancing our client partners’ ambitions to achieve a green and sustainable energy supply in Scotland.
 

Our Roundup aims to keep you up to date with changes in the regulatory environment and new industry initiatives to support the drive for our low carbon future.

Please click on the links below for quick access to the undernoted items.

Current projects

Anderson Strathern nails green credentials to mast

Renewables developments

Agri-Renewables Strategy announced

Funding for farmers harvesting renewables

Small Hydro is Best Performer in FiTs Stable

Aberdeen city and shire on 'Hydrogen highway' to the North-east

Renewables strategies

Renewing Scotland: The Government’s Programme for Scotland 2011-2012

Proposed changes to Climate Change Agreement scheme

DECC announce renewables funding schemes

Renewables News

DECC appoints chair for offshore wind cost-cutting task force

Renewables data

Key Scottish Environment Statistics 2011

Current projects

Anderson Strathern nails green credentials to mast
Anderson Strathern will sponsor the Scottish Low Carbon Investment Conference to be held at Edinburgh International Conference Centre on 27 and 28 September.

The conference is part of a government backed initiative identifying and debating opportunities and challenges around major offshore and infrastructure projects. A range of highly respected speakers will participate, including Al Gore.

Bruce Farquhar, Head of Renewable Energy team at Anderson Strathern, is delighted to have the firm continue its sponsorship for this prestigious event which is testament to its support for the wider global transition to a low carbon economy. The firm’s award winning work for The Crown Estate on the marine leasing rounds for the Pentland Firth and Orkney Waters and its role in advising on the sale of Artemis Intelligent Power to Mitsubishi are but a few of the recent innovative renewable energy projects, of national significance, in which the firm has played a key part.

Liz McAreavey, Director of Development at Edinburgh Chamber of Commerce comments: “Anderson Strathern's involvement in the Conference is great news. Through this sponsorship the firm is demonstrating real commitment to playing its part in securing a successful low carbon economy for Scotland, with all of the future benefits that will bring."
 

Renewables developments

Agri-Renewables Strategy announced
The Scottish Government has recently announced a strategy focus to expand renewable projects in the agriculture sector – the Agri-Renewables Strategy.
The aim of the development is to ensure that “land managers can benefit from the renewables revolution and unlock the green energy potential of their land'.

The strategy will consider key challenges for land managers, covering amongst other things: 

  • Understanding the planning system
  • Access to independent advice
  • Pre-construction costs
  • Connection to the National Grid

The Agri-Renewables Strategy is to be taken forward by the government with the assistance of industry representatives and will build on the existing renewables activity in the agricultural sector.

Details are available on the Scottish Government’s website accessible here.

Funding for farmers harvesting renewables
Barclays bank has taken the shrewd step of launching a £100 million fund for UK farmers who invest in renewable energy. The move picks up on the evolving focus of farmers to bolster normal revenues from other sources – a desire to save costs in current operations is also playing its part.

Barclays consider that in excess of 37% of the UK’s 200,000 farmers are expecting to invest in renewable energy with a view to achieving a return of up to £25,000 per annum.

The bank’s findings do not appear to be without foundation. The Carbon Trust has found that businesses which invest in renewable energy could make average returns of 11-12%, with the potential for returns in excess of 20%. According to its findings, new financial incentives, energy market trends and building regulations are combining to create a compelling case for UK businesses to generate their own renewable energy.

Indeed, REF research indicates that wealthy landowners in Scotland may earn millions of pounds from windfarms on their estates, which are often at great distances from their homes.

The Barclays fund is available for solar, wind, and hydro projects in the UK, with Barclays including projected feed-in-tariffs (FIT) when assessing each loan.

More information on the fund can be found on Barclay’s website accessible here.

Small Hydro is Best Performer in FiTs Stable
The Renewable Energy Foundation (“REF”) has announced the publication of its on-line searchable database of the small renewable energy generators subsidised under the Feed-in-Tariff (“FiT”) scheme.

Analysis of the data obtained by REF and related Ofgem renewables data show that small hydro is the best performer in the FiTs group.

The database is based on material released quarterly by Ofgem following a Freedom of Information request by REF in 2010.

REF has also published an information note on the performance of the FiT scheme so far. The key findings are: 

  • Growth in small solar photovoltaic (PV) projects accounts for nearly all the increase in installed renewable microgeneration;
     
  •  The geographic location of favoured areas for solar PV includes significant concentrations in Sheffield, Barnsley, and Rotherham, suggesting that factors other than resource availability are driving adoption;
     
  • Historical average annual load factors for all microgenerators suggest that small hydro could deliver more energy than micro PV or wind, with the better hydro sites able to command good returns for investors;
     
  • The FiTS generators installed at 31 March 2011 would generate approximately 140 GWh per annum, which is 0.1% of the 119 TWh required to meet the EU 2020 target for 15% of renewable energy;
     
  • Government expects that the FiT scheme will deliver 6 TWh of renewable electricity in 2020. This would require current output to increase more than 40 times in 9 years.
     
  • Details can be accessed on the REF’s website accessible here.

Aberdeen city and shire on 'Hydrogen highway' to the North-east
Aberdeen City and Shire Economic Future (“ACSEF”) has unveiled ambitious plans to set up Scotland’s first "hydrogen highway". The proposal forms part of a £750 million strategy to create a global energy technology corridor, stretching from Aberdeen to Peterhead which will be named the "Energetica" corridor.

The Aberdeenshire Coast is renowned for its hydrocarbon resources, but ASCEF aim to make the same coast a world leader in the development of renewable energy.

Details of the proposal can be found on the ASCEF website accessible here.

Renewables strategies

Renewing Scotland: The Government’s Programme for Scotland 2011-2012
The Scottish Government has issued its Programme for Government for the coming year.

The programme reinforces itscommitment to the 2020 Routemap for Renewable Energy in Scotland and the transition to a low carbon economy with targeted investment in renewable energy. As previously announced, there will be £70 million for the National Renewables Infrastructure Fund to help leverage private sector investment to bring forward the necessary infrastructure to support offshore renewables.

The Scottish Government also plans to introduce a Water Bill to develop the country’s water resource as a tool of economic growth and an environmental asset.
It has also raised the renewable energy electricity target to 100% by 2020, in line with its belief that Scotland can be environmentally sustainable in the future.

The full programme is available on the Scottish Government’s website accessible here.

Proposed changes to Climate Change Agreement scheme
The UK Government has launched a consultation into the Climate Change Agreement scheme (“the CCA”). It is hoped that the revitalisation and streamlining of the scheme proposed will result in savings for participants paying the Climate Change Levy (“the CCL”).

The Key proposals are: 

  • New rules requiring the existing 54 industry sectors to continue to participate in the scheme - but closing the scheme to new sectors;
     
  • Lowering the level of eligible energy use for installations from 90% to 70%, of the site’s total energy consumption, for the purposes of claiming the CCL discount on their entire energy use;
     
  • Encouraging use of reputational drivers to encourage carbon savings;
     
  • Reducing complexity by streamlining and aligning target periods with the EU Emissions Trading Scheme; and
     
  • Closing the EU Emissions Trading Scheme to some CCA scheme participants and introducing a new measure permitting some participants to buy-out any shortfall against their targets. 

Details of the consultation are available on DECC’s website accessible are to be made to DECC by 28 October.

DECC announce renewables funding schemes
Finance to take marine power technologies to the next level of development has been announced by DECC. Up to £20 million from DECC’s budget of over £200 million to fund low carbon technologies, announced at the Spending Review, will support the development of marine devices from the current large scale prototypes to bigger formations in the sea.

Additionally, Householders across the country could get up to £1,250 of government funding to help towards the cost of installing renewable heating systems such as biomass boilers, air and ground source heat pumps and solar thermal panels. The Government’s new £15 million ‘Renewable Heat Premium Payment’ scheme – which is open for applications until March next - will support up to 25,000 installations.

Details of the low carbon technologies investment is available on DECC’s website accessible here and on its support for green heating here.

Renewables news

DECC appoints chair for offshore wind cost-cutting task force
Andrew Jamieson, the Chair of RenewableUK, has been appointed as chair of the new industry-led Offshore Wind Cost Reduction Task Force. Mr Jamieson has been invited by the Energy Minister to chair the task force and provide an industry lead in driving the work necessary to bring the costs of offshore wind down to £100/MWH.

Details are available on the Department of Energy and Climate Change’s website accessible here.

Renewables data

Key Scottish Environment Statistics 2011
Scotland's Chief Statistician has published his Key Scottish Environment Statistics 2011.

Of particular interest to the renewable energy industry are the detailed charts showing the general public’s attitudes to the environment, global atmosphere, air quality, water, marine, radioactivity, waste, land, conservation and biodiversity.

The charts are supplemented by text providing brief background information on environmental impacts and relevant legislation, and a separate spreadsheet with the full datasets.

Details are available on the Scottish Government’s website accessible here

If you need any advice on renewables projects and the law and regulations driving the industry, please get in touch with Bruce Farquhar, Partner and Head of our Renewable Energy Team.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.