Wind Farm Extensions: Experts to Help Institutional Landowners
|Topic: wind farm extension||Read Time: 8 mins|
|Landowner type: Institutional landowners||Energy: Onshore wind|
Is your current renewable energy project lease coming to an end? If you want to make your wind farm extension feel much easier, just keep reading. We’ve rounded up a list of key experts that can help institutional landowners make the renegotiation process utterly seamless.
If your lease is coming to an end, you’re probably trying to figure out how to get the best terms possible at renegotiation.
And as it’s likely that your lease hasn’t been reviewed for 30 years, it always pays dividends to enlist the help of experts.
Although they probably won’t be the team that helped you with your original contract, don’t feel daunted!
Fresh pairs of eyes can help you decide on the future of your project and achieve a favourable outcome without missing any deadlines.
Whether you engage the services of your internal finance team or an external consultant, these experts will maximise returns for institutional landowners.
If you’re not sure exactly who to call on for your wind farm extension, join us as we run through your options!
P.S.: if you’re an independent landowner, you’ll find all the information you’ll need about teams and renewals right here.
Experts That Can Help Institutional Landowners During Wind Farm Extension Renegotiations
The finance team
The finance team is a crucial piece of the puzzle during renegotiations. They usually start by carrying out a full payment audit that involves reviewing your organisation’s rents.
This should put you in good stead for your lease renewal and give you all the information you’ll need when your lease nears its end. If any payments to the landowner have been miscalculated or simply not paid, they can also give you this information.
The finance team can also look at the financial viability of a project and assess if any new tenant is financially secure.
The overall goal is to ensure your organisation enters a lease with a company that can fulfill its financial obligations.
And not just that.
They’re here to make sure your project will be operated as well as (or better than!) others on the market.
If a company is considering bringing a project in-house, a finance team can also do a cost-benefit analysis to weigh this up. This will prevent institutional landowners from leaping into the unknown before renegotiating a lease.
Instead, they can work out the best payment arrangement for their project that will give them ultimate peace of mind.
To summarise, the finance team:
- Can carry out a full payment audit.
- Can discover any miscalculated or unpaid rent.
- Will look at the financial viability of extending a wind farm lease.
- Can make sure your project will be operated as well as others on the market.
- Can do a cost-benefit analysis of bringing a project in-house.
The legal team
When it comes to a wind farm extension, there are more legal hoops to jump through than you might think.
It doesn’t matter whether it’s assessing changes to contracts since you last signed (up to 30 years ago!) or understanding confusing terms. Legal teams are here to help institutional landowners.
The 2 main things that a legal team will do is serve a notice and renegotiate your lease agreement. These are quite complex tasks that require a bit of back and forth with site operators (and you!).
So, you need to work with them no later than twelve months before the end of a lease.
If you’re wondering what happens with each of these steps, let us fill you in.
Serving a notice
If your organisation wants to remove the current tenant from the site, there are very specific time limits that must be followed. That’s why it’s crucial to avoid your lease lapsing without a formal agreement in place. Unless you want to battle to remove your tenant from the site, that is!
There’s the risk that they could acquire greater security under the Landlord and Tenant Act 1954. But if you’ve opted out of this agreement, you can remove the tenant and bring a project in-house once your lease lapses.
The legal team will ensure all paperwork is filed and sent correctly, letting you sit back and focus on more important things.
Renegotiating the lease agreement for a wind farm extension
Most institutional landlords will know that renegotiations can last a long time. And as this is a specialist area of law with complicated clauses, you’ll want a legal team to review all relevant documentation.
This will ensure the lease is fully compliant with current laws which may have changed since your last agreement. Your legal team will also instigate discussions that will put all parties on the same page when it comes to the new lease.
Oh, and legal teams are there to help site operators too!
As this team is responsible for exchanging and registering key documents with your operator, they’ll keep everyone “in the know”.
Some organisations opt for external more specialist legal teams and although they can be expensive, they’re worth the investment as they simply make the renegotiation process seamless.
To summarize, the legal team:
- Will review all relevant documentation and ensure it’s in line with current laws.
- Will make sure all paperwork is filed and sent correctly when serving a notice.
- Will instigate discussions with site operators and put everyone on the same page for renewals.
- Can register and exchange key documents with site operators.
The in-house land agent
If your organisation is lucky enough to have an in-house land agent, they can be extremely helpful during a wind farm extension. This is because large-scale projects often require complex planning permission. Your in-house team can take these matters on and apply for all necessary permissions.
Not only will they take a stressful task away from institutional landowners, but they will make sure they’re done correctly and within deadlines. If a project has any unusual conditions that need to be met, they can also check that you’re being compliant.
Did your project need to be a set distance from a cliff edge? Did it require you to restore highways that were used to build your projects? They’ll check this all out and make sure you’re fulfilling your obligations.
In addition to applying for planning permission and keeping you in the clear for unusual conditions, they’ll also look at terms.
This includes investigating current market rents (on projects far and wide!) for a data-led approach that’ll aid you when renegotiating.
A quick tip:
Just so you’re aware, we typically suggest reviewing a minimum of 60 comparable UK sites and taking note of any trends.
It’s crucial to see whether any key terms are being added to other wind farm extensions.
These can then be built into contracts to give you the best result possible.
If you need any help with your site reviews, we highly recommend checking out any of our SiteScan™ solutions. We cast the net wide across the country and will provide the knowledge you need to get the fairest rates possible. Plus, it takes the guesswork out of things and lays things out in a clean and easy-to-understand way.
Compare the rents at hundreds of wind farms across the UK.
Access the best contractual terms written by the UK’s top solicitors to attain your ideal lease
100% of the landowners that we work with increase their rent negotiation offers
To summarize, the in-house land agent:
- Will ensure you have all necessary planning permission.
- Will ensure you’re compliant and within deadlines.
- Can investigate current market rents that can help when you’re renegotiating.
The in-house procurement team
The in-house procurement team is another group of experts that can help institutional landowners. They’re amazing for advertising new contracts and can assess the best value from a range of potential site operators by putting the project out to tender.
This team usually uses strict criteria for assessment. This includes the rent that new operators are willing to pay versus the quality of service that would be received. Essentially, they’ll separate the wheat from the chaff so that you don’t have to.
The team can also put together a business case for the project and liaise with external consultants to help them understand its potential value. This is especially helpful when you need to present a case to senior management about the project going forward.
After all, money (and a handful of facts) talks.
The in-house procurement allows you to take a data-driven approach and will compare bids to get you the best outcome possible.
To summarize, the in-house procurement team:
- Will advertise new contracts and assess value from potential operators.
- Will weigh up what operators are willing to pay versus what value they’ll add.
- Will help you prove the value of a project to senior management.
The specialist consultant
Although there’s plenty of help to be found in-house, it’s worth engaging with an external specialist before your lease ends. You may not need much help if you already have an in-house land agent and input from a finance team. But they can certainly assist by putting a monetary value on the project.
For this, they’ll look at the project and its future to assess its commercial viability.
This is usually done by:
- Looking at the historical performance of the site.
- Identifying seasonal trends
- Comparing sites across the UK
They can then use this data to forecast what the future output of the site could be in the next 10 or so years.
Once the monetary value of the site has been determined, they can weigh up the potential income from the site versus running costs.
If you want to bring the project in-house, an external consultant can also:
- Obtain an environmental permit and/or any other necessary consents to operate the project
- Secure government subsidies.
- Subsidies from the government have become more complicated over the years. It’s crucial to remember that if a project is decommissioned, it can lose its entitlement to government subsidies.
- So, the consultant should carefully plan and liaise with Ofgem to preserve the subsidy if a project is transferred in-house.
- Ensure the continuation of the sale of electricity to the grid.
- Liaise with the local network operator so they have continued connection to the National Grid.
- Organisations should then be able to continue to sell the electricity once the project has been transferred in-house.
If you need to prove that your organisation has the in-house expertise to run a project, consultants can also do this. Although they’ll need to look over your data, they can set up agreements for certain elements to be overseen by a third party. This should leave you in the clear to bring the project in-house.
To summarize, the specialist consultant:
- Can ascertain the commercial viability of your site and put a monetary value on the project.
- Can secure environmental permits and government subsidies.
- Will ensure the continuation of energy sales to the grid.
We always like to say, “Fail to prepare, prepare to fail” when it comes to renegotiations, as it never fails to ring true.
The earlier institutional landowners start preparing for the end of the lease, the more options you’ll have available to secure favourable terms. Plus, it means that you can engage with all the experts you’ll need to make the process way less stressful.
If you’re thinking of changing site operators, you’ll want to make sure there’s enough time to review alternatives. You should also leave plenty of time to obtain the relevant planning permission for your site.
As some renegotiation processes can take upwards of a year, it’s wise to be on the front foot and plan ahead. If you need any help with your renegotiation or simply want to see how well your site is performing, get in touch. Whether you’re wondering what’s changed since your last renewal or want expert insight, we’ve got you covered.