Farmers considering diversification and landed estates with surplus land may take comfort from a report by the IEA that renewable energy is holding up during the current troubled times (described as being a "historic shock" to the energy market). The IEA report, published today forecasts global energy demand will fall by around 6% this year. This would be the most severe drop since World War 2. Bucking this trend, it is forecast that renewable energy will experience growth, due to new capacity coming on stream, speed to market and lower operating costs.
From a landowner point of view, this could lead to increased and stronger interest from developers in potential sites for developing renewable energy projects. Given the circumstances and particularly where such an owner has a complicated estate, it could be prudent to undertake an estate health check. Whilst this may simply comprise a review of property holdings and ownership (to consider how that land is held and whether there may be any title issues that will impede development), it would be sensible to consider any tax planning and succession implications of any development. Finally, from a technical perspective, it may also help to commission an assessment of your land and its prospects for obtaining a suitable grid connection. Given that part of what will drive the success of any particular scheme is spare grid capacity, it is important to be able to act. It is also important to know the value of what is held to ensure that the landowner is able to share fairly in the future value of what considers to be a growing sector of the market.
Fatih Birol, executive director at the IEA, described the pandemic as posing an “historic shock to the entire energy world”. “Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas. Only renewables are holding up during the previously unheard-of slump in electricity use “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.”