SOLICITOR’S GUIDE TO WINDFARM AGREEMENTS
A developer may seek an option over all of your lands but it is possible to exclude part of your lands when discussing a Windfarm agreement.
Do not give them more lands than is necessary. It is generally accepted that an area of 2 hectares is required per turbine.
Ensure you know the exact identity of the land that will form part of the agreement. The agreement should be accompanied by a map. If necessary, instruct an engineer to prepare a map to avoid any dispute.
Think ahead. Consider future uses you may have planned for the land. Are you planning on giving a child a site in a few years?
Consider practicalities and how day-to-day farming access may be affected. Turbines and access routes can affect your farm greatly.
This can change field configurations and create land fragments inaccessible to large equipment. On grazing land, fences and gates may have to be changed.
There can also be clauses restricting the use to which you put adjoining land.
These need to be closely looked at, for example, if you wish to plant forestry on your land you need to insert a clause into the agreement that the windfarm development company can raise no objection to you doing so.
Ensure you have the right to continue to use the lands for current agricultural activity and that you have an entitlement to use all roadways constructed by the developer.
It is important to ensure that the windfarm development company has relevant insurance and that the landowner can oblige the development company to produce their certificates of insurance to the landowner on an annual basis.
The type of cover that a development company requires may include marine cover, advance loss of profits, uploading and transit of turbines, build-again cover and public liability in the first year.
After installation and commissioning are completed, the type of insurance cover one would expect to have on an annual basis would include material damage, operational damage and public liability. Ensure the developer indemnifies you on claims arising out of the developer’s use of the land.
The option agreement may affect your ability to comply with the conditions on the Department of Agriculture schemes and your entitlement to the receipt of payments. Ensure you seek professional advice in advance of signing the agreement from your Teagasc advisor.
The lease agreement should also contain a provision to indemnify the landowner against any loss which might arise as a result of the Department of Agriculture refusing or seeking a clawback on any payments — single farm payments, Reps, forestry payments and so on.
You should also discuss the agreement with your accountant and tax advisor prior to signing to avoid any surprises down the line.
With these windfarm developers getting landowners to sign confidentiality agreements it is very difficult to know what you should be paid. The calculation of the payment is complex and needs to be looked at very closely and can vary from developer to developer. How the basis of payment is defined in the agreement needs to be given special attention.
Payment provisions will determine the level of rent and that is why you are signing up to the agreement in the first place. There should be a minimum rental payment per megawatt of installed capacity rather than exporting capacity. This is important.
You should also be entitled to a percentage proportion of the operating proceeds of either the turbines on the land or from the overall development on a pro-rata basis.
See walshandpartners.ie/blog for more!
Go to www.windfarms.ie for advice when entering into a Windfarm agreement