31 Jul 2018

Warning after developers off-load grid connection rights

Farmers and landowners should be cautious about any offers from developers who are looking to off-load grid connection rights for battery storage schemes.

Independent power consultant, Roadnight Taylor, has issued the warning after a farmer contacted the firm for advice after being approached by a developer asking if he wanted to buy back the grid connection rights secured on the farmer’s land at a cost of more than £150,000.

“Landowners need to be very careful if offered grid connection rights,” explains Hugh Taylor, chief executive at Roadnight Taylor. “No matter what the fee, there can also be substantial financial obligations enshrined within accepted grid offers – and these represent risk above and beyond that of the capital being demanded.”

“In this instance, had the farmer bought the rights, he would be more than £150,000 out of pocket, with no tangible chance of ever getting a battery storage scheme.”

This appears to be a new tactic being employed by developers seeking to claw back cash, warns Mr Taylor. “This kind of behaviour from developers is only likely to increase, as the heat in the battery storage market has attracted players who are less prudent and discriminating.”

Developers are particularly likely to try and sell connection rights for sites that are less financially viable.  “Any landowner or farmer being approached to buy grid rights in this manner should ask why the developer is trying to sell to them, rather than to the pool of known storage and power scheme investors.”

However, there may be genuine opportunity arising from an offer to acquire grid connection rights. “They should be approached on a case-by-case basis,” says Mr Taylor.

“Landowners need to be aware that not every developer offer is going to be in their interest. This is an unusual and worrying development and I would advise severe caution; it’s vital that any case is looked at by an independent expert who understands the market.” 

Read more like this here.

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