Charging Ahead: The Electrifying Decade
The largest economic transformation since the industrial revolution? That’s how many see the challenges and opportunities from electrification over the next decade. Here, Matthew Hutchinson, Partner in the Real Estate team and Head of the Cross Department Energy Team at Blacks Solicitors, shares his insight into how property professionals should be considering the opportunities posed by the electrification revolution now ahead of a decade of change.
Electrification is the process of replacing technologies and processes that utilise fossil fuels with electric equivalents. It’s the term used to describe the changes we are starting to see all around us; from petrol cars to electric cars, from gas boilers to electric heat pumps and from coal power stations to solar farms or other renewables.
The shift is hugely important and is widely accepted by experts and governments alike as one of the most important strategies for reducing Co2 emissions and achieving net zero by 2050. It is also an important element of our energy security proposals, bearing in mind recent conflicts and their impact upon energy pricing.
The scale of the challenge
It’s important not to underestimate the scale of the challenge over the next decade, if any of the current targets are going to be met. Quoted below are some recent statistics provided earlier this year by the Tony Blair Institute for Global Change, showing the progress and the pace of change required over the next decade or so for the UK to remain on target.
The statistics highlight the incredible speed of change required, and that’s before we even consider the grid infrastructure.
All this change creates opportunities and challenges for the property industry and we’ve picked out a few specific areas below;
The most predictable element of change is the continued electrification of transport. From a property professional’s perspective, the key opportunity here relates to charging infrastructure. Whether it’s seeking EV charging companies as tenants or integrating charging stations into your commercial or residential developments. EV charging points are essential to protect or increase the value of developments or car parks.
The opportunity for renewable generation development continues. Utility scale solar, wind turbines or battery energy storage are dependent upon a grid connection, but can be excellent revenue sources for diversifying landowners. It’s key that landowners seek reliable, experienced developers to help them bring a suitable site forward to development.
Alongside grid connected generation, decentralised and distributed energy systems are also likely to become more prevalent. This covers a selection of different options ranging from small schemes or developments, where homeowners or businesses generate and use themselves, or much larger private wire arrangements where a generator connects directly to the user.
Some recent examples which we have seen include; a ground mounted solar development, a car port solar project and an onshore wind turbine proposal, all of which are intending to feed power directly to an adjoining heavy energy user. This approach can work for all parties, allowing cheaper renewable energy and a reliable return for an energy developer.
Utility scale developments create opportunities for landowners in the correct locations, and direct connections can create energy saving or development opportunities for parties. However, one challenge all developers face now is seeking to protect development value by considering the journey to electrification on any new development.
Efficiency Refurbishments and Sustainable Developments
Any developer, whether refurbishing an existing small property or completing widespread regeneration works, is keen to protect long term value. A key element of that is environmental performance and electrification. Some of this change is being driven by statutory or regulatory change, like the EPC regime, but it is also being driven by tenants and purchasers.
Options include rooftop solar, efficient electric heating and/or cooling systems and a utility management system to provide tenants with real-time data to allow them to identify energy and cost savings. Larger developments need to consider the future by building in scalable electrical infrastructure to accommodate new technologies.
Property professionals can contribute to a more sustainable future, realise development opportunities, and enhance the appeal and value of their developments by considering now the opportunities of the upcoming decade of electrification.
How can we help?
If you would like more information regarding the energy transition and how we may assist in this regard, please do not hesitate to get in touch via e-mail or telephone. Our contact details are as follows: 0113 322 2818 or Energy@lawblacks.com