On-farm energy installations look like continuing to be a potential source of income for landowners.
This time it is not renewable energy projects supported by sometimes controversial government subsidy, but storage and emergency generation driven by what is known as the Balancing Mechanism.
The balancing mechanism is the method by which National Grid and the DNOs (the power Distribution Network Operators) even out any imbalance within the electricity network. There can be both too much and too little power as well as instability in electrical frequency within the grid, all of which can lead to power outages.
The balancing mechanism is the method by which these vagaries are controlled. Payments are made to energy producers through a number of complicated sounding devices – Triad Avoidance, the Short Term Operating Reserve, the Capacity Market, Frequency Response and Enhanced Frequency Response. Leave that to the experts, as a landowner you need to know that there is a guaranteed income over a guaranteed term.
Battery specialists Green Hedge Energy have entered this market with an innovative product known as The Energy Barn. It is a 10MW battery array, taking up a quarter of an acre, housed in a standard agricultural portal framed building. The only catch is that it needs to be close to the grid.
Niels Kroninger, MD of Green Hedge, told me the market is in the region of two and a half gigawatts and it may take 2 or 3 years to reach a point of equilibrium, where there is sufficient storage and capacity to ensure the grid can be maintained in balance.
He said: “It’s a brilliantly simple scheme and something of a no-brainer for farmers struggling with low milk, livestock and grain prices. The only requirement is proximity to a suitable DNO substation or powerline.”
Green Hedge have developed the system which involves the construction of a 150ftx 65ft agricultural shed holding racks of lithium-ion batteries, inverters and transformers – effectively a 10 megawatt battery.
Energy Barns can earn farmers £20,000 per annum for leasing less than a quarter of an acre of land for electricity storage.
Niels added: “On sunny days when the wind is blowing renewable energy sources are generating more power than the National Grid can conveniently cope with. Rather than drain off surplus energy supplies the barns will act as a balancing mechanism, storing energy until demand peaks - typically at half time during Match of the Day!”
“There are some people who can’t get their heads around this technology. It does sound too good to be true but for farmers it may throw a lifeline, providing additional income when agricultural incomes are struggling.”
New and innovative ideas such as this which appear to offer large sums for little risk often attract unscrupulous and unsavoury characters and it is safe to say there are already many jumping on the bandwagon.
Bruton Knowles have made this an area of specialism and strongly recommend that anyone approached by a developer wanting to sign up options should take advice before signing anything.