Exploring alternative land uses with utilities

In today’s evolving energy and infrastructure landscape and with increasing demand for clean energy, utility companies are increasingly seeking private land to host solar farms, wind turbines, battery storage, telecom towers, and transmission infrastructure. Some landowners also have a desire to generate their own power or improve their own connectivity to meet business needs. Developments can offer long term monetary savings, and diversify income, but they also come with legal, regulatory, and practical considerations that must be carefully evaluated. Are you thinking about exploring alternative land uses? If so, you should read this blog.

Utility Agreements

Before entering into any agreement with a utility or infrastructure company, it is crucial to understand the legal implications. Most utility-related land use agreements come in the form of:

• leases (where a portion of your land is leased to a utility company for their exclusive use for a fixed term);
• easements or wayleaves (granting access or rights to install and maintain equipment); or
• licenses (rights to use land).

These arrangements can be put in place for different periods, but often last decades and may limit future development options. For instance, a solar farm lease might restrict agricultural use, building, or access to certain portions of your land.

A comprehensive appraisal should begin with a thorough title search and environmental assessment. Landowners must ensure they have full legal ownership to the property and that no pre-existing third party rights or obligations interfere with the proposed use. Environmental liabilities can also be triggered by new utility infrastructure, especially in projects involving battery storage or transmission lines.

Utility Types and Considerations

Not all utilities are the same, nor should be considered equal. There are many specific considerations which should be explored in relation to each and considered fully when contemplating a scheme or agreement.

Telecoms operators have statutory protections and rights available to them under the Electronic Communications Code. These may, under certain circumstances, allow them to share, upgrade and retain their apparatus on land without renegotiation of terms. Landowners have limited ability to remove or restrict operators and seeking to end agreements and remove apparatus can be legally complex. It is vital that the purpose and implications of entering into any agreement is understood at the outset of any negotiations. You may find our earlier blog Telecoms Leases of interest.

If considering Renewable Energy Installations, key factors will include possible points of connection to the Grid; the amount of energy intended to be generated from a scheme; roads, railways and rivers on the land; the type of soil and availability of water; planning and biodiversity; third party rights and the length of time it will take to make and progress an application.

All routes will also require tax and planning advice. Repurposing land for utility infrastructure may alter your tax obligations and your land’s designation. For example, whether the property is agricultural or within an Area of Outstanding Natural Beauty may significantly influence what is allowed.

Summary

Alternative land use for utilities can provide a revenue stream, unlock value in land and support the UK’s transition to a low-carbon economy. However, this path must be approached with a clear understanding of the legal, financial, and practical implications which can be complex and long-term. Each development and property site comes with its own unique set of circumstances, and it is important to evaluate those fully to understand the steps required to take to unlock your needs. Having advisors review a proposed site and contract terms is essential to avoid surprises down the road.

If you are considering exploring alternative land uses for utilities and would like to discuss these issues further, Paris Smith LLP offer a free 15-minute telephone call during which a specialist lawyer would be happy to discuss your proposals with you and guide you on the next steps to take. Please contact Lisa Busby for more information.

We publish blogs and social media posts to give a general overview of legal and commercial issues, relevant at the time of publication, which we hope you will find interesting. Please note that legal rules often change depending on the specific facts of a situation. The law also changes over time following changes in legislation or new court cases. We do not actively update our blogs or posts once they are published to reflect changes in the law.