Wind Farm Development: Getting a Project on Your Land
|Topic: New wind farm projects||Read Time: 8 mins|
|Landowner type:||Energy: Onshore wind|
If you’re looking to place a wind farm development on your land, you might be wondering how this process goes down. From assessing suitability to planning permission and construction, this guide for landowners will help you follow the process step by step.
The land required for a wind farm is relatively specific. But if you’re lucky enough to have good wind speeds, appropriate soil, and a supportive local authority? Well, you’ll probably have developers banging down your door for a chance to put turbines on your land. If you’re not sure what this process actually entails (or how it might affect you), then listen in.
We’ve rounded up the ultimate rundown of what to expect when a developer approaches you for a wind farm development. Covering everything from option agreements to feasibility studies, financing, and construction, we’ll demystify the process in minutes. Now, settle in and prepare to learn everything you need to know about wind farm development.
What Developers Look for When Selecting Land for Wind Farm Development
To start, let’s quickly run down what’s usually prioritised by developers seeking out a site for wind farm development.
- Suitable wind speeds
- The size of the land and how many turbines it could reliably host
- Appropriate soil
- Location and proximity to nearby properties
- Existing grid connection
- Local authorities and communities that are supportive of new wind farm developments
- Suitable access for necessary work and construction vehicles
If your land meets the criteria for a new wind project (or at least most of them), you’re in a good position. But before we get ahead of ourselves, let’s run through exactly what developers do when they find a promising plot of land.
How to Secure a Wind Farm Development on Your Land: What Happens Step by Step
1: Weighing up the economics and incentives
Weighing up the economics and incentives of a wind farm happens alongside (or even before!) a feasibility study. Before a full-on financing process takes shape, developers will usually put out feelers to interested investors during this early stage. This typically involves spreadsheets running through calculations and estimations for required funding. This helps them secure initial investments that will get the project off the ground. And by figuring out average wind speeds and income from similar sites across their portfolios developers can quickly determine the financial feasibility of the project.
Planning permission is never guaranteed, so it’s tricky to say with certainty whether these initial costs will be recouped. But if the project doesn’t appear feasible at this early stage, developers will likely back out of the project.
2: Site selection, feasibility, and option agreements
Before you’re even approached, a developer will be working behind the scenes assessing your land. They’ll be investigating whether there are other successful sites in the area, measuring average wind speeds, and checking for grid connection. This is usually done via a preliminary desktop study that gives the developer a decent overview of the site.
Just so you’re aware, we’re seeing an increase in site operators looking to place turbines in areas that have existing turbines on them. If you’re wondering why, it’s all about making planning permission easier to obtain. So, if you already have a project on your land, the chances of being approached again are significantly higher.
If your site ticks a few initial boxes, a developer will probably reach out to discuss option agreements. We won’t delve too deeply into this here (as we have a dedicated option agreement rundown for you to check out). But option agreements essentially reserve the land for a developer to potentially build on down the line.
Now, reserving the land gives the developer time to work on several things. This includes obtaining planning permission and carrying out a detailed feasibility study to assess the community and environmental impact of a project. The feasibility study will uncover anything that could constrain development on the site.
This includes but isn’t limited to:
- Projected energy and consumption
- Available land
- Above or below-ground obstacles like woodlands, footpaths, and roads
- Any potential issues with aviation or communications
- Wildlife and ecological considerations that may affect flying creatures like birds and bats
- Landscaping restrictions like listed buildings, ancient monuments, National Trust areas, or Green Belt land
It’s worth mentioning that landowners probably won’t see the developer’s final feasibility report. But it often splits constraints into low, medium, or high-risk considerations. This will play into the planning permission application to the Local Authority that comes in later down the line. The technical assessment of the site also helps the developer figure out the most appropriate scale and location for any wind turbines.
3: Planning permission
Before a site is fully financed, developers will be working on getting planning permission for the site. It’s no secret that getting planning permission when it hasn’t been granted for a previous project is a long process.
Although the government is looking to create accelerated approval for wind farms, the time taken would still be a year at minimum. And that’s down from an average of 4 years! Getting planning permission for a wind farm can be quicker in some parts of the country than in others.
For example, building new onshore wind farms is currently halted in England, while it continues without issue in Scotland. If we look at Brodies LLP’s report on wind farm decisions, it states that the process can take anything from 7 months to 2 years in Scotland. So, it’s certainly not an ideal timeline in any part of the UK.
This planning application process won’t necessarily affect landowners as they’ll have their land tied up by an option agreement. This agreement will typically run for the length of time that it takes to achieve planning permission and adequate financing. But if the process stalls for any reason, a typical 5-year option agreement can easily be extended.
Either way, it’s always worth bearing in mind as planning permission is always a major roadblock. Plus, if a planning application is rejected by the Local Authority for any reason, a developer will break the option agreement. And as 52% of historic onshore wind projects have previously been refused permission or abandoned by developers – it’s not out of the question! But if your site is green-lit, your developer will inform you, and the financing process will begin in earnest.
This is the stage when developers will start securing financing from private companies, banks, and investors. Many UK-based banks offer schemes designed to boost the country’s number of low-carbon energy projects. This includes everyone from Santander and Clydesdale Bank to HSBC and Barclays.
Now, securing adequate finance is something that we’ll discuss in detail in a separate blog (as there’s a lot to cover!). But what landowners need to know at this stage is that developers will be securing a lot of funding for large projects. And that’s because developers need to secure enough finance to cover construction, land rental costs, and turbine materials. And that can easily run into the millions.
During this stage, developers will also pin down construction companies to build the turbines and start mapping out access roads. These are all crucial steps that will get the turbines up and running as quickly as possible. Oh, and developers will also need to outline construction timelines and investment repayments to stakeholders at this stage.
If you’re concerned about timelines for construction (from start to finish), now is the time to ask your developer. Any developer will be happy to give you a rundown of expected project completion times.
So, your developer has got planning permission and has secured adequate financing for the project. All your developer needs to do now is construct the turbines. Local companies are often used to complete civil works like roads, foundations, and associated buildings for the project. In terms of the materials required to build the turbines, specialist manufacturers usually supply these.
If all required pieces for a turbine are available in a manufacturer’s inventory, construction time can last between 6 to 9 months. With expected stocking setbacks, the process usually extends to 12 months or more for a commercial site. Luckily, much of the construction will be dealt with by experienced construction managers and landowners will have little input here.
6: Get the wind farm up and running
The final stage is getting the wind farm up and running by producing electricity and selling it to the grid. Developers will need to consider warranties, operating costs, relevant insurance, and continuing leasing payments at this stage. But if a landowner has a signed lease with a pre-agreed payment arrangement, their involvement will be relatively passive from here.
If you’ve chosen a payment arrangement that’s slightly more involved (like hybrid rent), you may have more input. But otherwise, it’s time to let the passive rental income start flowing as the site begins to ramp up production when it is comissioned.
It’s worth mentioning that if you’re relying on rental income as a percentage of the site’s output, this payment type will fluctuate. Wind farms typically take a few years to reach capacity and typically become more profitable as they recoup initial investments. As the years go on, landowners should prepare for regular maintenance visits to keep the turbines in working order. Once the turbines are operational, you can expect the wind farm to have a life of 20-25 years.
I’m a Landowner Who’s Been Approached by a Developer – What Should I Do?
If you’ve recently been approached for a potential wind farm development, then you’ll need to consider a few things.
The first thing you’ll want to do is research the developer carefully and decide whether you’re interested in doing business with them. There are a few crucial things to look out for when choosing a developer. But generally, they should be willing to share their previous successful projects, be openly communicative, and be willing to explain things to you as the project progresses.
If you’re feeling relatively confident about who you’re dealing with, check the option agreement very carefully. We always suggest checking in with a specialist solicitor at this point, but it’s also worth comparing your offer to other sites around the UK.
If you possess a particularly valuable plot of land, you’ll want to present data that says so! With the right data in hand, you’ll likely get a more lucrative option agreement than you’d receive without any prior research.
We’ll give you a full review of what other sites are receiving in the market so that you can get the best possible lease agreement. Based on our findings, we can even negotiate terms ourselves!
We completely understand that a few landowners missed the initial wind farm development boat. But if you’re ready to capitalise on your land after doing your research, there are always options. You’ll need to make sure that your land is suitable for wind farm development. But the next steps are up to you.
Typically, developers will approach landowners after scoping their site ahead of time. However, if you’re still relatively under the radar, investigate the average wind speeds in your area and kickstart the process.
Realistically, the more data you can have on hand to present to potential developers – the better! If a developer has approached you about placing turbines on your land, feel free to get in touch with the team at Lumify Energy. Not only can we help you figure out option agreements, but we’ll even present you with valuable data for negotiations. That’s right, there’s no need to tackle wind farm development flying solo.