Drought, new farm scheme, and PV appeal

     

    Drought

     

    According to the Environment Agency press release on 9 March 2012, East Anglia and the South East of England are in drought with hose pipe bans already  announced in some areas.  Parts of central England, South West England and the South East of Yorkshire continue to be affected by dry weather. It’s anticipated that the risk of drought this spring and summer in these areas will be high.

    Most of England and Wales have received a fair amount of rain so far this month but the amount of rain has not been enough to reverse the impact of two consecutive dry winters.  River flows in those areas affected by drought have begun to increase but with a return to dry weather river flows will quickly slow again. Soil moisture deficits have decreased but remain exceptionally high in East Anglia (41mm). Soil moisture deficits in the south east are 20mm and in the Midlands 15mm. 

    As part of the Government’s initiative to reduce red tape the trading of irrigation licences is to be made easier.

    New grant scheme

    The Rural Economy Grant scheme has been launched by Defra.  This scheme provides grants of £25,000 up to circa £1 million to enable significant transformational performance in farm, forestry, tourism, agri-food and micro businesses in rural areas of England.  Grants of up to a maximum of 40% will be available, but it is a competitive scheme and applicants accepting lower rates of grant may have a higher rate of success.

    Project applications will need to demonstrate that, as a result of a grant, their business will achieve a significant step change in performance (such as job creation, increased turnover, access to new markets, enhanced Gross Value Added, etc).

    Expressions of interest must be submitted by 30 April 2011.

    PV appeal

    The government lost its appeal against the Supreme High Court ruling outlawing the reduction in Feed in Tariffs from 12 December 2011.

    However, regardless of this outcome, the Feed in Tariff would have been reduced from 3 March 2012 (due to a new deadline which was laid before Government in January).

    However, there are still plenty of opportunities for renewable energy generation particularly:

    a. where the power produced can be retailed or used on site to replace purchased electricity;
    b. for bigger schemes based on Renewable Obligation Credits and;
    c. while interest rates are low.
    d. where putting up new buildings in the future, there will be a requirement to generate renewable energy on site and PV offers a simple answer to this. 

    When calculating IRRs for various schemes care must be given to the replacement periods of different elements of the plant (such as inverters) as these can make a difference where the calculation is finely poised

    Key Points:

    • Efficient water management will be a high priority in 2012
    • Can your business use a grant to make a ‘step change’?
    • The Feed in Tariff for PV has been reduced from 3 March 2012 and other reductions are expected but there are still opportunities for the right schemes!
     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973

     

    Steve Hollis

    Steve Hollis

    Director
    Food & Farming

    Savills Salisbury

    +44 (0) 1722 426 853

    +44 (0) 1722 426 853

     

    Ashley Lilley

    Ashley Lilley

    Director
    Food & Farming

    Savills Cheltenham

    +44 (0) 1242 548 012

    +44 (0) 1242 548 012

     

    Giles Hanglin

    Giles Hanglin

    Director
    Rural Research

    Savills Margaret Street

    +44 (0) 207 016 3786

    +44 (0) 207 016 3786