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Use of agricultural land for renewable energy generation

Use of agricultural land for renewable energy generation

As Ireland continues its transition towards a sustainable energy future, agricultural landowners find themselves at the forefront of a transformative journey, writes Barry Caslin, Teagasc Energy and Rural Development Specialist.

While most Irish agricultural land will continue to be used to produce outputs such as meat, milk and tillage crops, new agricultural land uses are emerging from the renewables sector. Through involvement in renewable energy projects, some landowners will be able to diversify revenue streams, improve the incomes earned from their land, and contribute to national decarbonisation efforts.

However, navigating the complexities of renewable energy development requires informed decision-making, strategic engagement, and a collaborative approach between landowners and renewable energy companies.

In this article, we outline the different renewable energy-related land uses – such as growing feedstocks for anaerobic digestion, and wind and solar photovoltaic (PV) – that Irish landowners may be able to take advantage of.

For farmers and agricultural landowners, hosting an energy installation or growing feed stocks for energy generation may offer economic benefits. Typically, wind and solar PV uses of land provide a higher income per hectare as compared to conventional farming systems. This income stream is usually secured through lease arrangements between landowners and renewable energy generation companies. In addition, the lease arrangement between landowners and renewable energy companies is typically long term, often spanning 40 years.

By offering increased levels of financial security, renewable energy land use may be attractive to some farmers seeking stable returns from their agricultural land assets. Landowners can unlock new income-earning opportunities from their agricultural land assets while contributing to the broader transition towards environmentally sustainable energy practices.

Renewable energy policy: decarbonising the energy systems

Increasing the share of energy from renewable sources is one of the key pillars in decarbonising the Irish economy. Ireland has several targets relating to the share of energy from renewable sources, some of which are required under EU legislation and others that are determined at a national level.

The Climate Action Plan 2024 outlines ambitious targets and measures aimed at significantly reducing emissions across various sectors and for decarbonising Ireland’s energy system.

Energy system targets require that by 2030: 80% of electricity should be generated from renewable sources; 29% of energy in transport should come from renewable sources; and, 24% of the energy used in heating should be renewable.

The decarbonisation of the electricity generation system is an essential component in the wider decarbonising of the energy system, and the Climate Action Plan 2024 has ambitious targets for increases in the energy generated from onshore wind and solar PV.

The renewable energy targets require that by 2030 there will be an additional 9 gigawatts (GW) of onshore wind electricity generation capacity and 8GW of solar PV, while the draft national biomethane strategy has a target of 5.7 terrawatt hours (TWh) of gas from anaerobic digestion by 2030.

Renewable energy generation and agriculture

The three renewable energy generation sources with direct or indirect implications for agricultural land use are:

  1. The use of agricultural land to grow feed stocks for anaerobic digestion that produces biomethane.
  2. The use of agricultural land for onshore wind generation.
  3. The use of agricultural land for solar PV energy generation.

In addition, farmers can earn money from selling electricity to the grid (or reducing electricity purchases from the grid) from the installation of microgeneration or small-scale renewable electricity generation.

Anaerobic digestion (biomethane)

Anaerobic digestion, particularly in the form of producing biomethane, has gained significant attention under the Climate Action Plan 2023, with the target set at 5.7TWh by 2030. Achieving this goal would necessitate the establishment of approximately 150 to 200 anaerobic digestion plants across the country. This shift recognises anaerobic digestion’s pivotal role in curbing emissions and fostering a circular bioeconomy.

To meet the biomethane target, an estimated total land area of 120,000 hectares, which accounts for less than 3% of available agricultural land, will be required to cultivate the necessary silage for anaerobic digestion plants.

Additionally, winter slurry from around 1.3 million cattle will be needed, representing roughly 20% of all winter cattle slurry production in Ireland. These projections assume an equal mix of grass silage and slurry on a fresh weight basis.

If the targets for biomethane production are met, there will be consequences for existing agricultural land uses, with land that is currently used to raise cattle and other livestock used to exclusively grow grass for use in biomethane production. This diversification of grassland use will likely lead to some displacement of livestock production.

Wind energy

In alignment with Ireland’s Climate Action Plan 2023, the Government has set a target of achieving 8GW of onshore wind energy capacity by 2030. To assess the land area required to achieve this target, various factors come into play, including turbine capacity, spacing density between turbines, land use efficiency, and operational considerations. The estimation can be broken into clear steps:

  1. Turbine capacity: A common specification for onshore wind turbines is an average capacity of 3 megawatts (MW) per turbine.
  2. Estimating land area per turbine: Adopting a conservative approach, assume two acres (equivalent to 0.8 hectares) per turbine. This would account for factors such as spacing, setbacks, and access roads.

With the target capacity of 8GW by 2030 in mind, it is possible to derive an estimate of the total land area that is likely to be required. 8GW is equivalent to 8,000MW. With each turbine assumed to generate 3MW, this implies that 2,667 turbines would be needed to achieve the target of 8GW of onshore wind energy generation. If we assume that each turbine requires two acres of land, this implies a total land area of 5,334 acres. Given the vertical scale of onshore wind turbines, most of the land would still be available to be grazed by cattle or sheep.

Solar energy

The Renewable Electricity Support Scheme (RESS) has been instrumental in driving the adoption of solar PV and wind projects in Ireland. In the initial three auctions, a total of 2.7GW of contracts were awarded, accounting for over one-third of the 2030 target. Notably, the fourth RESS auction is scheduled for the second quarter of 2024, indicating continued momentum in renewable energy development. The consultation for the fourth onshore RESS auction is now open.

Moorepark solar panels

Currently, there are 18 solar projects connected to the Irish grid, signalling the tangible progress made in renewable energy integration. The microgeneration support framework has also played a pivotal role in accelerating solar deployment, with an impressive 700 systems registering per week at certain points during 2023. By the end of the same year, Ireland had connected 300MW from microgeneration alone. When combined with additional ground-mounted solar farms, the total connected capacity reached 1GW by the end of 2023.

The third RESS auction, held on September 15, 2023, saw significant participation from the solar sector. 20 solar farms, covering approximately 2,500 acres, along with three wind farms, successfully secured funding in RESS 3. It is noteworthy that the average support price was €100.47 per megawatt hour (MWh) for RESS 2. However, despite the success, this auction delivered the smallest volume of renewable energy among all auctions to date, and at the highest price, indicating some challenges in the market landscape.

Solar farms vary in size but scale matters. Between 2018 and 2020, most solar farms entering the planning system were between 50 and 100 acres. More recently, in the period 2021-2023, projects of over 250 acres and above have entered the planning systems across the country. The ready reckoner is 3-5 acres per MW and projects are now in the region of 100MW. Larger projects typically connect to the national grid using a 110kV grid connection or a 220kV grid connection, either via an underground electrical cable to the most viable substation or by directly tying into an overhead transmission line.

The 2030 solar PV target is 8GW. This is equivalent to roughly 16,000 hectares of solar farms if all of the 8GW were achieved exclusively via larger-scale solar PV arrays. In reality, some of the targets are likely to be delivered by microgeneration and smaller-scale generation installations. Nevertheless, if the 8GW target is to be achieved, significant volumes of land will be required. While it is not practical to graze large animals such as cattle on land hosting solar PV installations, it is possible to graze smaller ruminants such as sheep on this land.

Battery storage

The development of solar PV and wind energy farms across the country will be critical to the decarbonisation of the electricity generation sector. The intermittency of these two sources of renewable electricity means that the supply of energy has to be managed through time and one of the means of doing this is via battery energy storage systems (BESS). These BESS installations are typically located adjacent to solar PV or wind turbine arrays, and while they have a limited footprint in terms of agricultural land, they will for some landowners represent an additional source of income that is associated with the development of renewable electricity generation.

Understanding option agreements associated with wind and solar PV developments

An option agreement is a legal contract that gives a developer permission to access your land for surveys and planning purposes. Typically, this agreement lasts up to five years, allowing the developer time to sort out planning permissions, grid connections, financing, and successful bids for renewable energy support schemes. There is often an opportunity to extend the option period by a further three years depending on certain milestones being met.

By signing the option agreement, the landowner agrees that if the developer meets certain conditions, like securing necessary approvals and financing, the landowner will enter into a longer-term lease agreement with them.

It is worth noting that many option and lease agreements include a clause stating that if the developer sells the project to another party, they need the landowner’s consent. However, in general, this consent cannot be unreasonably withheld or delayed. It is essential to ensure that such terms are included in the option agreement to protect the landowner’s interests during negotiations. Landowners should always seek the advice of a solicitor and accountant before entering these or any long-term lease agreements. Meehan (2022) outlines many tax and legal considerations associated with the development of a solar.

Conclusion

Diversifying Irish agricultural land use and decarbonising the Irish electricity system are both critical components of the National Climate Action Plan. The use of agricultural land to grow grass for use as a feedstock in the generation of clean green biomethane will be central to the achievement of the national targets for biomethane production and will, if achieved, see up to 120,000 hectares of land required.

The area of land necessary for the achievement of the onshore wind and solar PV energy generation targets are smaller. Our estimate of the land required to achieve the onshore wind energy target is circa 2,000 hectares, while up to 16,000 hectares of land could be required to achieve the 8GW solar PV energy generation target by 2030.

All of these new renewable energy uses of land open up new opportunities for Irish farmers and landowners. In many instances, the income-earning potential of land leased to a solar or wind energy generation company will exceed the income likely to be earned per hectare from conventional agricultural production systems.

Given the long-term nature of the commitments associated with leasing land to companies operating in the renewable energy space, farmers should seek advice from their solicitor and accountant prior to finalising any lease or option to lease agreement.

Seeking legal and taxation advice before finalising any agreement is essential due to potential implications. Remember, individual circumstances may vary.

This article was first published as part SCSI/Teagasc Annual Agricultural Land Market Review and Outlook 2024. Access the full publication here.

Also read:The potential of solar PV on Irish farms