This article is Part 2 of a five-part series exploring the essential components of Battery Energy Storage Systems (BESS) development. Each article focuses on a vital phase or document necessary for navigating the complexities of BESS projects. Our series began with the Term Sheet or Letter of Intent (LOI) setting the groundwork for clear agreements. Moving forward, we’ll discuss other key topics, including project timelines, permitting processes, and innovative solutions to enhance BESS project efficiency and profitability.
Following last month’s discussion on the term sheet’s critical role, this installment delves into an equally crucial aspect—securing site control. Earlier this year, I published No Land, No Project: The Significance of Securing Site Control for Renewable Energy Projects, where I emphasized streamlining the lease and purchase process. Building on that article’s foundation, this article will present advanced techniques for establishing site control more effectively while fostering mutually beneficial relationships with property owners.
Advanced Strategies for Securing Site Control in BESS Projects
- Consistency in Offerings: Maintaining consistent terms can be vital when working within a specific region, especially in rural communities. Although property values vary, property owners often know one another and offers tend to circulate through local discussions. Consistent offers establish credibility and reduce hesitation from potential lessors, contributing to smoother negotiations and increased trust.
- Transparency Builds Trust: Honesty and integrity are fundamental when working with stakeholders, particularly landowners. Many landowners may have previously engaged with battery storage proposals, some of which may have yet to materialize or include unfulfilled promises. By being transparent about project expectations, timelines, and deliverables, developers can establish a foundation of trust that will benefit the project in the long run.
- Clear Communication of Timelines and Processes: Setting realistic expectations is essential for a long-term, cooperative relationship. Communicating realistic timelines frustrates landowners, especially if the project encounters regulatory or study-related delays. Consider providing a concise document outlining a typical project timeline and milestones to mitigate this. This builds trust and preemptively addresses questions, fostering an informed and engaged partnership.
- Negotiation as a Two-Way Exchange: In many lease negotiations, developers may need to make concessions, such as adjusting compensation or altering lease terms. However, it’s essential to approach these negotiations as a two-way exchange. For example, if a landowner wishes to modify the storage area’s location, developers can request a commitment, such as a timely lease signing. This approach not only maintains balance but also ensures that both parties feel empowered and gain value from the agreement, fostering a collaborative relationship.
Developers can navigate site control challenges by employing these strategies—maintaining consistency, prioritizing transparency, communicating timelines clearly, and negotiating effectively. These methods streamline the negotiation process and lay the groundwork for a productive, decades-long relationship with landowners.
Battery storage projects are long-term investments, often taking several years before reaching Notice to Proceed (NTP). Locking in well-vetted properties as early as possible ensures that valuable sites are secured, minimizing risks associated with project delays or regulatory hurdles.
In the next installment, we will address the importance of establishing realistic project timelines and managing expectations to keep BESS developments on track.
Joe Tassone Jr. is founder and a principal of Oncore Origination and has over twenty-eight years of project development experience. Visit www.oncoreorig.com for more information.