Capital is becoming more selective, with infrastructure funds, pension capital and international investors prioritising projects that offer greater certainty over planning, grid connections and delivery.
Reforms introduced by the National Energy System Operator (NESO), particularly Gate 2 outcomes, have reshaped how investors assess development pipelines, making projects with greater certainty over grid access more attractive. The push towards Clean Power 2030 is also encouraging developers to recycle capital, supporting transactions involving operational assets that offer investors established revenue streams. Grid reform is also creating a more pronounced two-tier market. In some cases, connection status is becoming as important to valuation as planning consent itself, particularly for co-located solar and battery storage projects where efficient use of grid capacity is central to the investment case.
These developments are influencing how transactions are negotiated and structured. Buyers are scrutinising grid arrangements, planning status and routes to market more closely, including Contracts for Difference (CfDs), power purchase agreements (PPAs) and other revenue arrangements. Where uncertainty remains, buyers and sellers are adapting how risk is allocated. Deferred consideration and earn-outs can link payments to project milestones, such as securing planning consent or a firm grid connection.
This year has demonstrated that joint ventures and co-development arrangements are becoming increasingly relevant as developers and investors seek to share risk and improve project delivery certainty, particularly where developers retain responsibility for progressing projects after a sale. In some transactions, developers may remain responsible for securing planning consent or grid connections under development services agreements. Meanwhile, sellers continue to favour clean exits, with warranty and indemnity insurance (W&I) playing an important role in larger transactions.
Looking ahead to 2027, Scotland will remain an attractive market for investing in renewable projects. Projects with secure grid access, planning consent and viable revenue arrangements are better positioned to attract investment. For those facing greater uncertainty, flexible deal structures and the ability to manage risk around development milestones could prove increasingly important in getting deals over the line.
This content was originally published in The Scotsman's Annual Legal Review 2026.
