Knowledge: Biomass
Obstacle course
Gaining planning permission and surmounting legal issues can be a minefield for
large scale projects. Neel Mehta, TLT Solicitors, advises on ways to expedite the
process
iomass and anaerobic digestion
plants remain an attractive
investment, still luring
government subsidies and
incentives, yet getting one built often hits
avoidable problems.
The biggest is delayed planning. A
project can be approved within 13 weeks,
but it can also take several years, not least
because local authority and community
attitudes vary. One size planning applications
do not fit all. There have been cases where
installations exploded which, have not made
them popular. This has led to a very particular
regional sensitivity about their installation.
The first step with a proposal is not to
submit an application without reviewing local
planning and environmental policy. It could
save time employing the relevant planning
authorities to help prepare your application.
This ensures that all relevant issues are
addressed. It also means working with people
whose view about the project will influence
the planning committee. Any problems should
be flagged up and addressed before a formal
submission, thereby saving time and reducing
the risk of rejection.
An alternative option is to employ
someone who has experience submitting
applications. easements for cables and conduits across
other properties, so appropriate agreements
must be in place and dovetailed to satisfy the
interests of the project company.
Construction and installation contracts
are so crucial to the process that it stands to
reason to have the least number. For that, as
much as for technical reasons, it is ideal to use
a single biomass technology supplier with a
track record. This will also reassure lenders
about ongoing maintenance and replacement.
Project finance
Planners are often not the only people to
satisfy. The project may require financing and
need to be presented to lenders in a bankable
form. This means, for example, ensuring that
leases for the installation site are secured
against potential problems.
A bank needs comfort that the financed
asset has appropriate protections in particular,
any termination rights under the lease must
be subject to step in rights for the bank to
make good any defaults of the tenant.
There may also be issues around Insolvency protection
There are plenty of bespoke plants out there.
The question is not whether these work, but
can they be maintained securely into the
future? Companies go bust. Will the one that
supplies yours be one of them?
Any firm involved with the process, either
of construction or operation, must have the
financial capability to meet any liabilities if
there are difficulties. It is also important to
watch for caps on liability.
Another protection against the
insolvency risk is to spread it by buying
B
34 | www.renewableenergyinstaller.co.uk
Time saver: Identifying experienced and
reputable planning and legal professionals
will mitigate against avoidable project delays,
suggests Neel Mehta of TLT Solicitors
components from different manufacturers. But
prudence would still tend to favour using one
established provider with a track record, or at
least as few as possible.
Power purchase agreements and fuel
supply agreements are also at the heart of
any commercial component involving the sale
of energy. For example, biomass plant relies
on the right quality of fuel supplied so as to
prevent any damage to equipment. The wrong
fuel can cause serious problems.
It is also vital for a business, and any
lender, to have contracts that guarantee not
only supply of heat and electricity, perhaps
over a 20 year period, but also to purchase the
fuel.
In addition, government support relies
on certain energy generation benchmarks
being met, something banks will also view as
important security for any loan.
It could be argued that biomass
technology is simpler than what it takes
to avoid being burned along with the base
material: Good planning and sound contracts.
For more information contact
Neel Mehta: 0333 006 0269 / Neel.Mehta@
TLTsolicitors.com
It could save time
employing the relevant
planning authorities to help
prepare your application