When the Feed-In Tariff payments were introduced last April, we predicted a change in the windfarm market. We foresaw a switch from large to medium/smaller scale projects with more farmers and landowners taking a cut of the action.

With the continued squeeze on the economy and the current restrictive lending regime, we also predicted that financing would become an issue for renewable projects: banks might talk a good game but they would hold the purse strings – tightly.

Our third prediction in the last 6 months was that we would see the emergence of a new commercial market in the renewables sector where windfarms became a “commodity” and developers would sell on their wind farm projects either with planning consent, pre build-out or at the operational stage.

These predictions have all been realised and we have advised clients to take action in anticipation of this new market. They have done so and they are now reaping the financial rewards.

We have reviewed the current situation and have three further predictions: the first is that there will be an increased focus on how to make windfarm projects more efficient and economically viable. We are already seeing this happen with the construction of onsite energy storage facilities close to windfarms. Hydrogen balancing plants will take excess electricity produced by adjacent wind farms at periods of low demand, transmit it through the facility and the grid, convert it into hydrogen, store it, and then convert it back to electricity on demand. We’re already advising clients in cases like this and we predict more advice will be needed as the technology develops.

Secondly, we believe that in order to protect themselves from carbon taxes, there will be an increase in the number of companies looking to buy into renewable energy projects such as wind farms, hydrogen balancing facilities and biomass plants. We predict that this will create a new trading market in the sector, which will in turn create opportunities for owners and operators of these renewable projects in the form of increased income, as companies seek to find ways of converting their “green energy” mission statements into actual investments they can then promote on their websites.

Thirdly, and perhaps most importantly, landowners are now making a much more critical appraisal of how they will enter renewable schemes: Inheritance Tax planning and the desire to have a more active stake in the profitability of the scheme are driving them forward.

Further information

For further information please contact Gail Clarke or Alex Brown 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.