Forestry support for Electricity Distribution Network Operators
Electricity Distribution Network Operators (DNOs) are now required, by industry regulations, to select circuits which are most vulnerable to tree related problems and make them resilient. This often involves the felling of sometimes quite large areas of commercial forestry plantations. This equally applies to new lines where the planned route runs through woodlands
Where this is the case, estimating what is a reasonable amount of compensation to pay the landowner requires specialist forestry advice. ADAS have Chartered Foresters across the country and so are able to provide this and any other forestry related support that may be required.
The three main financial questions which need to be answered are:
What is the current standing value of the timber being felled?
The most usual option is for the DNO to measure the trees standing and pay the landowner the agreed standing value. The DNO then fells the trees and sells the timber. How the trees are measured will depend on the age and structure of the plantation and could involve either a complete measure or measuring sample plots in accordance with – the Forestry Commissions “blue book” Forest Mensuration – A handbook for practitioners.
What is the financial loss to the landowner from felling plantations prematurely?
In relation to a young plantation, the timber value will be very small, but the loss of future revenue to the landowner can be quite substantial. This loss of revenue is based on estimating the value of timber from thinnings and the value of the final crop. These values are then discounted back to the present day (from the time they would have occurred) to give the landowner the net present value (NPV).
What is the financial loss to the landowner “in perpetuity” where land is not being replanted?
This involves a similar exercise to (2) above, but it is also usually necessary to decide on the tree species that is most suitable for the site, which may be different from what is there at present, to take into account the cost of establishing a plantation and to calculate not only the NPV for one crop but for successive crops (i.e. in perpetuity).
The Forestry Commission normally require all felled areas to be restocked and where this is not the case it constitutes a change of land use. Where there is a change of land use, the Forestry Commission will normally require an Environmental Impact Assessment to be submitted with the felling licence.
ADAS has a good track record in relation to not only assessing compensation for loss of timber revenue, but also in helping negotiate the financial settlement with claimants.
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