Utility Week

UTILITY WEEK | 6TH - 12TH DECEMBER 2019 | 25 Operations & Assets "The hardening attitudes of landowners towards utility companies has the potential to be a major stumbling block to achieving net zero." Market view Chris Gaskell T he government's ambitious commitment to achieve net zero carbon by 2050 will inevitably require a major transformation of infrastructure if targets are to be met. Supply chains will need to be radi- cally sized-up and established infrastructure upgraded. This will only be achieved with the backing of landowners. Access to, and acquisition of, land is an inevitable consequence of the government's race to reach net zero. And this is where utility companies are hitting a major stumbling block – experiencing a serious hardening of attitudes by landowners. Negotiations regarding land are increasingly lengthy, time- consuming, costly and potentially confrontational. In‚ ated compensation payments are draining budgets for developments with wild ƒ nancial expectations at higher ends of pay scales, and developers o„ en forced into paying signiƒ cant premiums for projects to be delivered on time. I also believe that current statutory powers are failing to help the situation. The current Schedule 4 of the Elec- tricity Act 1989 is frankly not ƒ t for purpose, resulting in the pushing through of developments being even more problematic. Why is this happening? Privatisation and lack of trust are two major factors which jump out. Attitudes towards utility companies changed since privatisation. Previously, the sector was per- ceived as a public service doing "public good". Post-privatisation, a step change occurred and we witnessed co-oper- ation disappear. This also happened with the rail industry. A lack of public trust, perceived high prices and lack of transpar- ency has also contributed towards a poor perception of the industry. This inevitably has a knock-on e' ect regarding landowners' willing- ness to negotiate – suspicious of change and unlikely to want to be involved. So how can utilities rebalance the relationship with landown- ers? Acting both as property consultancy and property broker, Bruton Knowles knows the value of a trusted working relation- ship between utilities and landowners. An important ƒ rst step is to conduct face-to-face meetings to explain what's happening and when, highlighting the indirect beneƒ ts of the scheme, along with discussions sur- rounding impacts to land. O„ en, landowners see large infrastructure projects as being of no beneƒ t to themselves because they have no need of network reinforcement. Beneƒ ts such as greener energy, environmental impact or a stronger economy, for example, are important points to demonstrate. Time is imperative. Generally, the earlier negotiations com- mence with landowners and their agents, the fairer the outcome for both parties. Major stumbling block A major stumbling block for all involved is the Electric- ity Act 1989. The act provided for the privatisation of the electricity supply industry yet is based on out-of-date principles dating back to late 19th century. Powers are old and designed for the wdi' erent needs. As a result, we're o„ en unable to implement powers in the time required and costs are prohibitive. If network operators are required to use statutory powers to avoid paying excessive premiums, time scales are extended signiƒ cantly. Under the current act, consent by the sec- retary of state is required in all cases where a voluntary agreement cannot be reached. This can push projects time scales back by at least a year. Furthermore, costs to invoke such powers are high, taking into account legal costs and sta' time to prepare proofs of evidence. Conse- quently, network operators will o„ en take a commercial view and pay signiƒ cant premiums to avoid the even greater implicated costs of using powers. A much faster process is urgently required. The new code powers available to telecoms operators to develop 5G networks are an example of how new legislation can enable progress of this type. I see similarities between eš cient telecoms networks and eš cient electricity networks in this regard. Powers available to electricity network operators need the same attention to deliver major changes and upgrades to meet net zero. Net zero is a reality, but at its core is the relation- ship between landowners and utility companies. This needs to be improved dramatically. But the government must also play its part by bringing in e' ective powers to deliver change. We have to turn to the government to move on this if we are to meet net zero. Without the right foundations, targets won't be met. Chris Gaskell is head of utilities at national property consultancy Bruton Knowles Attitudes towards utility companies changed since privatisation. Previously, the sector was per- ceived as a public service doing "public good". Post-privatisation, a step change occurred and we witnessed co-oper- ation disappear. This also happened with the rail industry. A lack of public trust, perceived high prices and lack of transpar- ency has also contributed towards a poor perception of the industry. This inevitably has a knock-on e' ect regarding landowners' willing- ness to negotiate – suspicious of change and unlikely to want to be involved. So how can utilities rebalance the relationship with landown- ers? Acting both as property consultancy and property broker, Bruton Knowles

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