With interest in renewables at an all-time high and attractive returns on offer, now could be the time to join the green revolution. But, as Ben Collard explains, careful planning is essential for anyone looking for a slice of the action.
Planning constraints will depend upon the area in which you live, as different local authorities look upon applications very differently. As a rule of thumb smaller turbines with less visual impact are usually viewed more favourably.
Undertaking detailed pre-application consultations with planners can save significant time and cost in the long run.
At the same time, because of these benefits, many landowners and occupiers are increasingly being approached by developers and utility companies to rent their land for wind turbine projects. The reason for this is because significant returns can be made from the increasing wholesale price of electricity and renewable obligation certificates (ROCs) or the feed in tariff (FiT).
Investment funds, high-net worth individuals and multinational companies are keen to take full advantage of arguably the North’s most valuable resource – its wind.
These funds and developers are able to offer attractive options fees because of the huge financial gains if planning consent is granted.
With this in mind identifying a “good deal” is imperative. Increasingly developers are exploring leases on 500 kw turbines and offering, in some cases an extremely low option fee. This may seem like money for nothing but in effect land is tied to the option holder, removing the owner’s right to develop their own turbines for a long period of time.
Suggestions have been made that some organisations are doing this to prevent other companies developing the sites or to wait for a change in legislation that will relax planning policies. In the case of large wind installations, a planning refusal may hinder the opportunity for the landowner/ occupier to develop their own “mid wind” turbine on the land in future.
Usually a permanent access track is required for each turbine, a ground mounted substation, significant earthworks, additional overhead lines and at least a 20-year change to the view. This must be considered during negotiations on remuneration.
To understand when a deal is a good deal you must first understand the returns from the proposed turbine. If you are offered £20,000 per annum per turbine this may seem a good deal. However, if the turbine proposed is likely to generate £350,000 per annum this figure may not seem as attractive. Working out the return the developer is likely to receive should also help individuals assess the option fee they should receive. Landowners should be mindful when entering into option agreements and always have a third party review the terms of any agreement before signing away their right to take full advantage of a hugely valuable resource.
Ben Collard is director of gfw-Renewables, which was set up last year as a wholly owned subsidiary of George F White Chartered Surveyors, and has specialists operating throughout the North East