wind turbine lease considerations for landowners n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Wind Turbine Lease Considerations for Landowners PowerPoint Presentation
Download Presentation
Wind Turbine Lease Considerations for Landowners

Loading in 2 Seconds...

play fullscreen
1 / 23

Wind Turbine Lease Considerations for Landowners - PowerPoint PPT Presentation


  • 163 Views
  • Uploaded on

Wind Turbine Lease Considerations for Landowners. Dwight Aakre Ron Haugen February 2010. Wind Farm Development Contracts. Legal, binding contracts are necessary Before a contract is signed, terms are negotiable Upon signing, you have given written approval of all provisions.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Wind Turbine Lease Considerations for Landowners' - giza


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
wind turbine lease considerations for landowners

Wind Turbine Lease Considerations for Landowners

Dwight Aakre

Ron Haugen

February 2010

wind farm development contracts
Wind Farm Development Contracts
  • Legal, binding contracts are necessary
  • Before a contract is signed, terms are negotiable
  • Upon signing, you have given written approval of all provisions
first rule of contracts
First Rule of Contracts
  • Contracts reflect the interests of the party that writes the contract
second rule of contracts
Second Rule of Contracts
  • Seek competent legal advice before signing
landowners options to participate in wind energy development
Landowners Options to Participate in Wind Energy Development
  • Lease land to a wind project
  • Be a partner in a wind project
  • Own a residential/farm size turbine for your own use
wind energy leases and easements
Wind Energy Leases and Easements
  • Most common way for landowners to participate
  • Few standards
  • Compensation varies widely based on:
    • Turbine size
    • Wind resource
    • Price of energy
    • Access to grid system
    • Knowledge level of landowner
  • Long term commitments
some questions to ask before you sign on the dotted line
Some questions to ask before you sign on the dotted line
  • How much of my land will be tied up and for how long?
    • Leases have two components
      • Contract to lease the wind development rights
      • Contract to construct and operate the wind turbine and related development
contract to lease wind development rights
Contract to Lease Wind Development Rights
  • Limited duration, 3 to 5 years is common
  • May include an option to renew
  • Provides exclusive development rights to that company
  • Provides annual payment to landowners
  • Payment may be $2 to $10 per acre for acreage contracted
contract to construct and operate wind turbines
Contract to Construct and Operate Wind Turbines
  • Leases usually are 20 to 25 years
  • Usually includes an option to extend the lease
  • May or may not permit renegotiation of terms
wind turbine decommissioning
Wind Turbine Decommissioning

What happens when the tower becomes obsolete or uneconomical?

  • Tower, access roads, other structures
  • Timeline for removal
  • Who is responsible (work and cost)

Photo by Ron Beneda, Cavalier County Extension Agent

placement of access roads
Placement of Access Roads
  • Roads are necessary for maintenance and repair
  • Will impact efficiency of field operations
  • Landowner input in location of roads

Photo by Ron Beneda, Cavalier County Extension Agent

construction period
Construction Period
  • Considerable crop may be destroyed
  • Contract should provide compensation

Photo by Ron Beneda, Cavalier County Extension Agent

roads fences and gates
Roads, Fences and Gates
  • Responsibility for maintenance of roads (primarily snow removal)
  • On grazing land, who is responsible for:
    • Fences
    • Gates
    • Cattle guards
how much will i be paid and how will i receive payment
How much will I be paid and how will I receive payment?
  • Types of compensation packages
    • Fixed payments
    • Royalty or percentage of revenue
    • Combination of fixed and royalty
    • Equity partnership
fixed payments
Fixed Payments
  • Per tower or megawatt
  • $4,000 to $8,000 per megawatt of turbine capacity
royalty or percentage of revenue
Royalty or Percentage of Revenue
  • 3 to 6 percent of gross revenue
  • Revenue includes
    • Production tax credits
    • Tradable renewable energy credits
  • Must have a means of verifying company records
inflation or escalator clause
Inflation or Escalator Clause
  • Contracts will run for 20 or more years
  • Inflation will significantly reduce value of future payments
  • All fixed payments should be adjusted by an escalator such as the consumer price index
liability issues
Liability Issues

Contract should specify the project developer and any company to which the contract may be assigned in the future are responsible for any financial obligations you may incur as a result of:

noise visual pollution vandalism

access roads construction period ice shedding

blade drop/throw shadow flicker fire

stray voltage electromagnetic fields lightening strikes

communications microwave towers radar stations

TV and radio signals emergency radio signals bird kill

water/air pollution

have i considered other contract specifications
Have I considered other contract specifications?
  • Confidentiality clauses
  • Settling contract disputes
  • Negligence
  • Safety and maintenance issues
  • Limiting agricultural land use
  • Limiting hunting and recreational use of land
  • Aerial crop spraying
other considerations
Other Considerations
  • Mortgaged real estate
    • All lien holders must provide written approval before the landowner signs an agreement
  • USDA Programs
    • Need approval from USDA if land is enrolled in CRP
    • Other USDA programs
much of the wind development has been established using a divide and conquer strategy
Much of the wind development has been established using a “Divide and Conquer” strategy
  • Company representative contacts individual landowner
  • Drops off a contract
  • Requires decision to sign within a short time frame
  • Expects landowner to commit to a 20 to 50 year agreement
  • Contracts include a confidentiality agreement
an alternative approach
An Alternative Approach
  • Landowners organize into a business entity
  • Market their resource as a package
  • Landowners are compensated with or without a tower
  • Hire an experienced attorney to work for the group