Pressure is piling on for wind farms but there is much still to be considered

In November 2009 the Government outlined its plans to fast-track major energy infrastructure projects including nuclear and "clean coal" power stations and wind farms.

Six draft "national policy statements" are to secure the UK's energy supplies, reduce carbon emissions and create jobs.

The new planning system for large infrastructure is intended to push through the Government's plans for thousands of new wind turbines as announced in its Low Carbon Transition Plan in July.

The pressure is on for this rollout of wind farms but when considering the potential of your holding you will need to assess if the site is likely to gain planning permission. Aviation radar objections are one of the largest causes of wind farm planning applications being rejected or withdrawn in the UK.

They are currently holding up over 5GW of wind energy in the planning system and a further 5.5GW in early stages of development.

New research by NATS (formerly National Air Traffic Services) to try to solve the problem has started but it is not expected to conclude its programme until April 2011. Accordingly it is imperative that at an early stage any site is checked to see whether it will interfere with radar and telecommunications installations.

You may have been contacted by a developer or its agent.

It will be the developer who will incur the time and expense of carrying out the feasibility studies, investigations and planning applications.

The developer will insist you enter into an exclusivity agreement under which it has an exclusive right for a period of one to two years to carry out this initial testing and enquiries, which are known as "scoping".

If those are positive, it will be followed by an option agreement for between two and five years.

The option agreement would detail the terms of the lease under which the wind turbines would be erected if the project is successful.

Each of these three documents will be of crucial importance to you detailing financial, legal and practical issues - in the case of the lease for the lifetime of the project.

The lease will be for between 20 and 30 years and is intended to document each issue relevant to the construction, operation and final decommissioning of the wind farm. One of your principal concerns will be the level of rent and other sums to be paid by the developer.

There is no fixed industry standard but the rent paid may be based on the higher of a minimum rate per megawatt and a percentage of gross electricity output or income.

Developers tend to have their own standard exclusivity, option and lease agreements.

These are not intended to be favourable to the landowner.

You need expert advice not only on the commercial terms being proposed by the developer but also on the contents of each agreement.

You should insist that any professional fees incurred in taking advice on the proposal and the documents is guaranteed by the developer whether or not the transaction proceeds.

Yorkshire Post [2009-12-11]