Bluefield Development MD hails “buoyant” UK solar farm market
Despite the huge disruption of the covid crisis, Jonathan Selwyn, Bluefield Development’s Managing Director, is optimistic about the growing UK solar farm market. In the latest of our industry Q&A series with Seb Berry, the former Chair of Solar Energy UK reflected on the challenges of his first six months as Bluefield Development MD, and the prospects for “subsidy-free” solar in the UK, including Bluefield’s own 450MWp pipeline.
1/ You’ve been MD for just over 6 months now, during the most disruptive period any of us can remember. How has the covid crisis affected Bluefield’s plans, including recruitment?
In terms of Bluefield Development, we are a new business within the wider Bluefield Group, and we actually started up during the first lockdown. However, one of the attractions of the role for me was working with Bluefield Partners and Directors who I had already known for some years and this, together with fitting in a couple of strategy meetings before lockdown, meant we were able to get up and running smoothly. However, we have only met most of the wider Bluefield team via Teams and Zoom and haven’t visited any of the offices, so we are looking forward to getting to know them in face-to-face meetings soon.
As a small, established development team, we haven’t needed to start recruiting externally yet, but the wider group has, albeit mostly via video interviews. It has been a challenge for the new recruits and for the teams they have joined, but Bluefield have continued their admirable approach to making incoming staff feel welcome and quickly part of their teams and the wider group.
The biggest impact on our development activities has been on the ability to get to potential development sites, meet the landowners/agents and conduct a thorough site review on the ground. We have spent much of our time carrying out desk-based studies and only visiting sites during the various stages of lockdown easing. There is nothing to beat walking a site to fully understand its positive attributes and any likely constraints, and we have now managed this on all the sites we are taking forward.
2/ In general terms, how would you characterise the current state of the UK solar farm market?
Despite the pandemic, the UK solar farm development market is buoyant. The costs of solar have fallen sufficiently to make subsidy-free solar an investment reality, even in more northern climes such as the UK. Early in the pandemic, there was concern that the rapidly falling demand for energy and the subsequent drop in energy prices would make renewable energy relatively more expensive and therefore less attractive to investors. However, with the collapse in investor confidence in formerly safe investment havens such as oil and gas, commercial property, and airlines, together with the accelerating need for decarbonisation, renewable energy has in fact become relatively more attractive to investors.
With more finance available, development activity has surged with many of the leading solar investors such as Bluefield at the forefront. The large utilities are also notable by their presence in the market, perhaps at a scale that they weren’t able to achieve in the Feed in Tariff and Renewable Obligation markets a few years ago.
We are increasingly seeing hybrid projects coming forward, combining solar and battery storage, whilst ‘green hydrogen’ produced from renewable energy also provides huge potential opportunities.
3/ A few years ago, the great concern in the industry was that very expensive or over lengthy grid connections might frustrate solar farm rollout, particularly in the South-West. Is this still a concern?
It is certainly the case that grid connectivity has become a much scarcer commodity, and this has led to increases in development premiums for those projects that have secured cost-effective connections. It has also led to larger projects being developed. With much of the country’s 11kV and 33kV circuits saturated with renewable energy connections, developers have had to look to the higher cost connections on 66kV and 132kV circuits.
These connection costs only work on much larger projects with the result that most projects now in development are in the 30-50MWp range, with some well over 100MWp in size. Any planning applications for projects over 50MWp bypass the local planning system and are treated as Nationally Strategic Infrastructure Projects (NSIP) which are decided upon by the Secretary of State. This is a more time-consuming and expensive process which is why once developers have chosen to go down this route, they seek the largest projects possible above this threshold.
4/ What difference, if any, will including solar in the next CfD round make to the UK solar sector and investors?
Although relatively few solar projects are likely to be entered in the CfD auction process relative to the development pipeline, it is no doubt important for market and investor confidence. It means that large-scale solar is once again considered by government to be a desirable and important technology on their path to Net Zero. This is a major step forward after years of government indifference at best and outright hostility at worst. The government-backed guarantees also lower the cost of capital.
5/ Is it possible to say how large the Bluefield Development pipeline is right now, and typically what size of solar farm you’re planning to develop?
We are currently working on a realistic and buildable pipeline of around 450MWp. Projects range in size from modest extensions to our existing solar assets up to 50MWp, with the majority between 25MWp and 50MWp
6/ What steps is Bluefield Development taking to ensure your solar farms meet high biodiversity standards?
We are determined that we will build higher quality projects now that we have left behind the madness of the subsidy deadline dashes. We will plan in high standards of environmental stewardship from an early stage: all our solar farms will allow sheep grazing, wildlife corridors will be prioritized, areas will be set aside for wild-flower meadows and pollinators and other insects will be encouraged. We will be setting biodiversity net gain targets as part of a comprehensive group wide ESG strategy. One of the big advantages of working for Bluefield is that we develop, build, own and operate for the long term. Therefore, we understand the benefits of getting this right from the start and have the ability to manage effectively throughout the project lifecycle.
7/ Which European markets are you targeting this year (and why), and are there any plans to go beyond Europe?
As well as the UK, we are currently active in Italy, Spain, the Netherlands, France, and Ireland. We are looking at a number of other European markets and will also be exploring opportunities in markets outside of Europe although this would be a longer-term strategy.
8/ Solar Power Portal claimed at the end of last year, that the cumulative pipeline of UK solar farms had grown to around 13GWp. Realistically, how much of that is likely to be built, and to what extent is planning permission still relatively straightforward (for sensibly sited projects) compared to eg onshore wind?
There is always a large disconnect between pipelines and viable, buildable projects. This is because grid and planning constraints are myriad. However, there is no doubt that most local authorities look more favourably on solar farms than they did in the previous subsidy phase of development. Many have declared ‘Climate Emergencies’ and there is of course a big push from central government. Solar has continued to be the most popular energy technology in regular public attitude surveys and the public are more familiar with them as they see them around the country. It is important, however, that developers continue to focus, where possible, on poorer quality land that is (or can be) well screened and has opportunities for environmental and biodiversity enhancement.
9/ Bluefield Development is also interested in wind farm development I think. If yes, any immediate plans on that front and which market/s?
We are looking at a number of opportunities to buy operational assets in the UK and are not looking to become involved in greenfield development at the present time. We will also be assessing other European markets.
10/ What more could the UK government be doing to support the solar sector and encourage the more rapid rollout of largescale solar during the 2020s?
We would like the forthcoming revised planning guidance to be unequivocal in its support for solar in the right locations. We would like to see more regular CfD auctions (at least annual rather than bi-annual) with unlimited caps and/or volume reserved for solar and hybrid solar/battery schemes
11/ Anything you would like to add?
The solar industry is incredibly resilient. Time after time it has been knocked back by government, but each time it has come up with new and innovative ways to make the technology work. It’s great to see the good times come back for solar and installations growing at all scales, whether on rooftops or land. We’ve always known that solar would play an increasingly important role in energy supply globally and it now feels very much like its time has finally come. I’m looking forward to helping Bluefield remain at the forefront of this energy transformation.