Managing and Monitoring Wind Farms for a Smooth Project

Are you looking for a detailed guide on managing and monitoring wind farms? From contract considerations and payment arrangements to physical checks, I’ll cover them all.

Now that you’ve decided to host a wind project on your land, you may be wondering what your site operator is responsible for. Or perhaps you’re not sure what you, as a landowner, can do to monitor the project from your end.

Maybe you’re not sure of your responsibilities and want to get ahead of the game, or you’re curious about whether wind farm maintenance will impact your daily activities.

Whatever questions you have, I’m here to clear things up.

To start with, I’ll cover what you should think about before getting turbines installed on your land.

Next, I’ll run through how wind farms are monitored and managed (and what this means for landowners).

To finish, I’ll provide some helpful tips for landowners who want to take a more active role in monitoring their project.

After all, preparing for what’s to come is always a smart move.

Things to Think About Before You Manage and Monitor a Wind Farm

Everything starts with a good contract

Every successful project starts with a good contract.

Even small differences in legal phrasing can have a big impact on what you’ll receive.

Plus, it’s essential to have responsibilities outlined in writing before the project begins.

From monitoring responsibilities to decommissioning steps, having a clear plan of action will keep both you and your site operator satisfied.

1. Payment arrangements and royalties

Before you sign any contract, you’ll need to carefully consider the payment arrangement being offered.

Some payment arrangements are naturally more volatile than others, as they fluctuate with energy prices.

For example, fixed payment arrangements require very little management from the landowner’s side. You’ll simply receive a pre-agreed fixed fee, which allows the site operator to run the project on your land.

These agreements usually require minimal time, resources or cost to check the accuracy of payments since they’re usually quite straightforward.

However, the main downside to this simplicity is that you may not receive as much overall income.

After all, less risk often means less reward.

On the other hand, if you opt for something like turnover rent, which involves you sharing in some of the project’s revenue, you’ll need to track your payments far more carefully. These payments are dependent on multiple income streams, so keeping an eye on the numbers is crucial.

2. Dispute resolution

If you’re not being paid in line with your agreed payment arrangement, you’ll be within your rights to question your site operator.

However, disputes can be costly.

You could face expenses ranging from £1,500 on the low end to £300,000 on the high end.

That’s a substantial amount to spend on resolving a disagreement.

The determining factor in how much a dispute will cost depends largely on the type of dispute resolution clause you have in your lease.

The key takeaway is that it’s best to avoid disputes in the first place, or at least be prepared with solid evidence to address any issues that arise.

A quick case study from Travis:

I always advise landowners to be aware of their payments and all arising income streams associated with their land.

For example, I once worked on a project that had been running for years, and when a staff member left, a finance team member noticed that something didn’t look quite right.

Upon further investigation, I found a 0.01 per cent error in the stated royalty rate in the contract.

Having worked with sites across the UK, I quickly realised that this section of the contract wasn’t up to the usual standard.

By working closely with the site operator, I managed to secure a seven-year back payment of income for the client.

3. Decommissioning plans

When a wind project reaches the end of its usable life, it’s time to decommission it (or repower as part of a wind farm extension).

Since the project is on your land, the eventual decommissioning work could fall to you if the developer doesn’t take responsibility or abandons the project.

While this isn’t common, the legal responsibility lies with you to restore the land.

For that reason, I always recommend having clear and actionable wording in your lease that deals with decommissioning.

Expert solicitors will be able to work this into your lease and take you through the process when the time comes.

The Project Is Up and Running – What Happens Then?

Once your wind turbines are successfully up and running, you might wonder how the project is maintained.

It’s not uncommon for the original developer to hand over management of the project to another site operator, and throughout the lifetime of a project, it’s also quite common for ownership to change hands.

The site operator is generally responsible for:

• Keeping the site running and generating electricity
• Planning and carrying out maintenance checks
• Keeping the turbines in good condition

These maintenance checks typically take place when the turbines are harnessing less wind energy (like in the summertime).

The site operator will also schedule shutdowns throughout the year for maintenance, but these checks will be few and far between, so they shouldn’t disrupt day-to-day activities.

What about when the turbines start supplying energy to the Grid?

Once the energy goes to the National Grid, it can be supplied to homes and businesses.

This is the point when the project is considered ‘commissioned’ and becomes eligible to receive income.

This is also when Power Purchase Agreements (PPAs) come into play.

While, as a landowner, you won’t be involved with the terms or negotiation of these contracts, they do impact the income you receive.

PPAs provide a ‘route to market’ for the electricity generated by the wind farm.

These long-term contracts allow suppliers to buy renewable energy at agreed volumes and prices to meet consumer needs.

They provide both parties with security and often ensure that landowners receive payments regularly.

PRO TIP

In my experience, a lot of larger developers will be willing to agree to lower prices for energy PPAs.

This is largely because it gives them more certainty when planning their revenue models. For them and their shareholders, a guaranteed income is more predictable than fluctuating earnings.

However, this situation isn’t ideal for landowners, as it can limit the payouts developers are willing to offer.

So, when you’re choosing wind energy developers to work with,smaller (but reasonably established) ones are often better options.

Smaller developers are more likely to negotiate for higher-valued PPAs, resulting in higher overall payments.

Smaller projects tend to have fewer stakeholders to satisfy, which makes them more flexible in negotiations.

For this reason, I always recommend that landowners do plenty of research into any developer before signing an option agreement.

How Will the Wind Farm Be Monitored?

Don’t worry, you won’t be responsible for actually monitoring the turbines – this will be down to your site operator.

But if you’re interested, there are a few different things that site operators typically use to monitor and manage a wind farm:

Accelerometers

The accelerometers measure physical accelerations experienced by an object (in this case, the turbine blades).

Temperature sensors

Temperature sensors can monitor current-carrying components in the turbine (like the generator and gearbox).

This ensures that nothing is overheating and everything is working within an acceptable temperature range.

Pressure sensors

Pressure sensors are important for managing the hydraulic system inside the turbine.

These help to optimise power outputs at any wind speed, so they must work properly.

Rotational speed sensors

As you might expect, monitoring the rotational speed of a wind turbine can help site operators measure the performance of a site.

They measure how the turbine shaft rotates and can detect whether the turbines are performing sub-optimally.

The Importance of Relationships – Site Operators and Landowners

Part of successfully managing a wind farm is keeping your relationships stable.

A solid relationship between the site operator and the landowner can help resolve disputes much more quickly.

It also encourages an open dialogue about the site, which benefits both parties.

At the end of the day, it’s in both your best interests to maintain a positive and collaborative relationship.

What Can Landowners Do to Monitor the Projects on Their Land?

Review all payments and carry out regular audits

When carrying out SiteView360 reviews, I’ve noticed that around 75 per cent of landowners discover calculation errors during the life of their projects.

It’s not that your site operator is deliberately missing payments; rather the payment system is complex and involves several different income streams.

Plus, energy prices are linked to the cost of gas in the UK energy markets.

Currently, landowners should be seeing higher payments as these rates rise.

When the most expensive commodity on the market, like gas, increases in price, renewables tend to follow suit.

These price increases will likely taper off as the energy crisis resolves, but it’s always important to keep an eye on current market rates to make sure you’re getting your rightful share.

Depending on your payment arrangement, the payments you receive should track with these increases and decreases.

How exactly can landowners check for payment discrepancies?

While it might be tempting to let passive income roll in once your project is running, you could be missing out on significant sums. 

If your project has been operational for some time, you should consider carrying out a SiteView360 comprehensive review, where you’ll be able to easily catch any payment discrepancies.

Alternatively, you might want to choose ongoing management with our Lumify SiteAdvisor solution.

Having a dedicated specialist accountant on your side can be extremely helpful.

Ensuring your income remains reliable throughout the life of the project will only benefit you in the long run.

Monitor wind farm ownership

Even if there is a good relationship between the landowner and site operator, it’s not uncommon to see projects changing hands during the life of a wind farm.

With leases lasting upwards of 30 years, ownership transitions are something you should be prepared for.

To stay informed, make sure you keep an open dialogue with your current operator.

Equally, it’s a great idea to get detailed information (including accurate contact details) for any new operators.

You’re well within your rights to ask them any relevant questions before the changeover takes place.

Overall, keeping an eye on who your site operator is and what their responsibilities are will significantly improve your overall experience.

Being able to reach out for problems, breakages and repair processes is invaluable.

Be proactive

If the site isn’t working for any reason, reporting it promptly to your site operator will seriously speed up repair times.

Of course, it’s usually only landowner-developers who would be expected to monitor the technical side, including:

• Checking accelerometers
• Making sure the turbines are adequately lubricated
• Hiring teams to perform maintenance checks

But if you notice any issues with the turbines as a landowner, it’s always worth raising them with your site operator.

This way, fixes can come in as quickly as possible, restoring the project to its fully functional state.

And when the project is fully functional, it can produce as much energy as possible – meaning you’ll see the benefits.

Watch out for key lease dates

When you’re nearing the end of your wind farm lease agreement, you’ll want to look at your contract carefully.

If you’ve had a mid-lease option applied to your agreement, you may be able to reassess your payment arrangement during your lease term.

Make sure that you have this key date clearly marked to give you time to prepare.

If you’re unsure what a mid-lease option entails, here’s a quick overview:

Volatile energy prices and inflation can significantly impact the payments you should be receiving for your land.

This applies whether you’re on a fixed payment arrangement or something more complicated like a hybrid rental agreement.

Either way, assessing your payment arrangement and terms at a set point in your lease gives you more flexibility.

Instead of accepting the existing terms of your lease, the mid-lease option gives you the opportunity to negotiate a better deal.

To get the best deal possible, I highly recommend working with a team of experts to secure favourable terms.

Solicitors are always a great help, but even land agents and accountants can help fill you in on current market rates.

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If you want to come to the negotiation table armed with the latest figures on similar sites around the country, I recommend reaching out to our team.

Whatever experts you consult, they should give you cold, hard facts to present to your site operator on current market rates.

And in my eyes, that information is priceless.

What about repowering?

As an aside, repowering a wind farm can be an excellent option at the end of a lease.

Not only does this let you take advantage of new technology, but it also saves your developer from having to apply for planning permission again.

Letting a lease end without a formal contract in place can be extremely problematic. That’s why I always advise starting the renegotiation process at least three years before your lease expires, especially if your site operator hasn’t approached you about it.

In short, keep a close eye on the end date of your lease and take action well in advance.

While getting planning permission was once nigh-on impossible in England, new developments under Labour in 2024 should make this far easier to achieve. So, while you need to be on the ball before your lease ends, getting planning permission for repowering should be less of a hassle.

Final Thoughts

Managing and monitoring wind farms is largely out of a landowner’s hands.

But it’s always worth staying informed about what’s going on with the project on your land.

It doesn’t matter whether that’s by keeping track of your payments or understanding the maintenance schedule. The more you know about a wind farm, the better placed you are for a site operator to fairly compensate you.

And as I always say: knowledge is power.

If you have any further questions about managing and monitoring a wind farm, don’t hesitate to get in touch.

The team will happily run you through the typical process. We’ll even help you check for any payments that might have been missed.

FAQs

When speaking with new clients, they often ask about maintenance costs and the overall life cycle of a wind farm.

To help demystify these topics, I’ve answered a few of my most frequently asked questions below.

How much does it cost to maintain a wind farm?

Much of the maintenance cost of your average wind farm comes from taking care of the turbines themselves.

According to Wind Measurement International, maintaining modern turbines costs 1.5 to 2 per cent of their original investment per year.

So, the cost of monitoring and managing wind farms depends largely on how expensive the turbines are.

Who pays for UK wind farms?

Developers usually finance wind farms with a mixture of bank financing and individual investment (for example, from High Net Worth individuals).

But landowner-developers who want to take full control of a project often self-fund.

This is less common as it requires a significant capital injection at the start of the project.

How many years does a wind farm last?

Wind turbines generally last between 20 and 25 years before developers need to repower or replace them.