Archive for the ‘windfarms’ Category

Windfarms: Making the most of those welcome winds of change

Thursday, August 30th, 2012

More than 600 land owners attended three recent IFA meetings on proposed wind energy projects in the midlands. These could prove lucractive for farmers but there are issues to be considered

A representative from an energy generation company comes into your yard talking about a possible annual rent of €18,000 per wind turbine for three turbines.

You are struggling and cannot wait to get signed up and get going. What are the issues?

Your land will generally be part of a larger block intended to be used as a wind farm.

The company promoting the wind farm needs to have a written commitment from all the landowners in order that the company can make an application for planning permission, and then to make the land available for the wind farm project should planning permission be granted.

Accordingly, you are asked to sign a document called an option agreement.

The option agreement states that for the payment of a fee of up to €1,500 or so, you will give the company the exclusive right to take perhaps a 20- to 30-year lease of a part of your farm if it so chooses at any time within the following period of perhaps five years.

The proposed lease is attached to the option agreement.

The option agreement deals with such things as:

1.The names of the parties;

2.The particulars of the land;

3.The option fee and period;

4.Restrictions on the use of the land (both the land retained as well as that intended to be leased by you during the option period);

5.What tests and surveys can be done by the company;

6.Your willingness to co-operate in planning applications;

7.Felling licence applications etc;

8.Responsibilities of each party;

9.The wind farm company’s contribution towards your professional costs and insurance;

10.You agree not to oppose any planning application by the company and there is no guarantee of a wind turbine.

The proposed lease attached to the option deals with such matters as the names of the parties, the land to be leased, use of that land, the rent, length of lease (generally about 30 years) and the conditions to be complied with by each side.

Such conditions cover a wide range of issues, including sufficient access and accommodation works (e.g. widening entrances, making new passageways, laying cables, construction of substations, storage buildings, masts, fencing).

The farmer can generally graze animals near the turbines and carry on as normal, but cannot do anything to interfere with the operation of the construction or ongoing maintenance of the wind farm or the windflow to the turbines.

The land owner must deal exclusively with that company as regards wind farming and there is often a confidentiality clause. There are clauses relating to dispute resolution and insurance.

So what must the land owner look out for?

Probably the primary matter is only to deal with a company you can trust and which has a track record in wind farm development.

Allied to that is how the project is to be financed and the conditions laid down by the lender.

It would help to be convinced if possible that the overall project has a realistic chance of success.

After that, you need advice from someone with experience in advising farmers in relation to these matters — preferably someone who knows both the wind electricity business and the agriculture business.

Options and leases will be drawn up by the wind farm developer’s solicitors, who may not be aware of all of the regulations with which farmers must comply, particularly in their dealings with the Departments of Agriculture and of the Environment and with their own banks.

Compliance with Single Farm Payment regulations, Disadvantaged Area Payments, REPS, AEOS and Afforestation Schemes can all be affected through the development of a wind farm on a farmer’s lands.

Payments to farmers under these schemes may also be affected.

Developers offer different lease payment systems which may or may not be indexed or linked to actual electricity sales.

Not all wind farm developments are straightforward and where a turbine or turbines must be shared between two or more farmers, a fair method of payment must be agreed between the participating farmers at the beginning to avoid bad feeling between neighbours for the following 20 or more years.

In many wind farm developments, developers will be pressing farmers to sign options and leases quickly.

A wind turbine or turbines on your land should be treated as an alternative enterprise which will improve the income on your farm. You and your neighbours should pool your resources to get the best possible agricultural, accountancy and legal advice to ensure a good return.

A united approach will always achieve better results than if each individual farmer fights his own battle.

Oliver Ryan-Purcell is a solicitor and can be contacted at 086-2532056 or at oliverjryanpurcell@gmail.com, while agricultural consultant David Walsh can be contacted at 086-8338329 or at d_walsh@eircom.net