Energy Bonanza or Community Time Bomb?

Our ever growing population has an insatiable appetite for energy.  A dependence on imported fossil fuels had propelled the need to seek alternative resources to maintain our energy resilience. Will the benefits to local communities be outweighed by the intrusion, loss of property values and potential blight? Ben Harris from TM Group assesses whether the new “Energy Rush” will be for the public good. 

Faced with importing coal and diminishing North Sea oil and gas reserves, the race is on for us to develop a robust and balanced mix of low-carbon energy resources and become more self-sufficient. The UK is blessed with a wealth of natural resources in the ground and through its weather, making it ideally placed to reap a new energy harvest. However, their exploration, extraction and by-products create understandable neighbourhood anxiety.

Nuclear Power has been generated from our shores for decades and though the thorny issue of radioactive waste disposal is still unresolved, it is considered an attractive low carbon option. The expansion of generation on existing sites should come as no surprise in locations where they form the backdrop of everyday life – it’s just that  neighbourhoods are growing nearer to these once remote locations and new generations will eye them with equal concern and appreciation as a source of employment – valuable in places like rural Suffolk, Somerset and Northern Scotland.

Coming up fast on the rails though is wind power. We are already familiar with large offshore installations, such as the London Array off the north coast of Kent. Onshore, it is cheaper and therefore more attractive for operators to submit applications, but they are mired in planning battles at every turn.  Life is made a lot easier if you can find somewhere that has far fewer  restrictions – AONBs, sites of scientific interest, flight paths, for example – and Northamptonshire fits the bill perfectly. In this county alone there are currently 20 applications totalling 159 turbines in a 20 mile radius of Northampton. Middle England is battling to preserve its countryside.

In a bid to bring local feelings and wider energy needs closer together, the Government is giving communities more powers to influence the planning process for onshore wind farms, but also offering greater incentives to accept them. While planning guidance in England will be changed to ensure local opposition can override national energy targets, the measures will see a five-fold rise in the benefits paid by developers to communities hosting wind farms. Alternatively, the money could pay for energy efficiencies in the host community or fund other local initiatives.

Wind farms clearly create massive line of sight intrusion for many a rural idyll, as well as identified electro-magnetic interference affecting mobile, radio and TV signals. In one of the proposed sites at Haversham in Northants, five turbines will reach 127m in the air and will be visible in a 16 mile radius, including nearly all of Milton Keynes. There may be financial benefits to the very local community, but will it match the loss in property values in real terms?

In the latest Government Spending Review, George Osborne announced that further incentives will be made available for shale gas exploration, including streamlining the release of permits for licenced block areas across the country. This comes at a time when reserves are thought to be far higher than previously thought.

The latest analysis, supported by The British Geological Survey (BGS) suggests that in the North of England alone, there could be as much as 1300 trillion cubic feet of shale gas, of which roughly 10% would be recoverable. Given that the UK as a whole consumes some 3 trillion cubic feet of gas a year, we could easily be self-sufficient for decades to come.

In return for this “dash for gas”, Osborne is keen to ensure that communities get a piece of the action. The Department of Energy and Climate Change (DECC) is considering offering £100,000 per fracked well and 1% of future revenues generated.  Communities would then decide how the cash was spent.

While this potential revenue might appear superficially attractive, communities remain nervous about the process of extracting shale gas from the ground – hydraulic fracturing or “Fracking”. They point to earth tremors in Lancashire triggered by exploration as well as well-publicised stories from the US of groundwater contamination from damaged wells leaching a toxic combination of fracking chemicals and methane gas into local water supplies. While none of this has been conclusively proved, it doesn’t stop the community turmoil.

In areas relying on boreholes for water supply, as 70% of the South East’s supply does, communities are on red alert. The BGS have stated that the action of fracking would be safe if strict regulation and extraction controls are in place, but further research was still needed into whether any future damaged wells could lead to water supply contamination.

The UK experience is sure to be different to the US. The planning system and the regulatory regime are far more rigorous in the UK, suggesting there won’t be an uncontrolled gold rush. Indeed, it is highly likely that exploration and exploitation will be mired in local disputes and uncertainty. For local house sales markets, this creates uncertainty and potential blight – a chain killer. Sellers will fear a loss of equity if these intrusive energy installations go ahead. Buyers will be put off, unsure of what they would be inheriting and then be trapped by for years to come.

The countryside is going to get a lot more crowded in the future. Aside from the prospects from shale gas and wind farms, energy infrastructure needs renewal and new connections. Large scale power lines and relay stations are needed to build a more robust grid for our growing population. It is far more expensive to put them underground, so they will always be a feature of our landscape. Again, fear of electro-magnetic radiation and as yet unproven concerns about leukaemia and dementia will be in the minds of the hundreds of thousands who currently live within 165 feet of large scale power lines.

Homebuyers need clearer guidance on the potential financial and emotional impact of these major energy installations that could be destined for their neighbourhood. In conjunction with GroundSure, we have introduced a new search to our portfolio in order to address these issues. GroundSure Energy highlights the planned, in development or existing energy installations within 25km of a property. Homebuyers will be concerned to understand the current and future impact of how energy exploitation and management could affect their investment and enjoyment of their property. 

Whether it’s fear of fracking, frenzy about wind farms or panic about power lines – the potential issues ahead of purchase will be clear to your client. For more information on the GroundSure Energy Report call us today on 0844 249 9200 or email helpdesk@tmgroup.co.uk