Wind Farm Development: Steps for Securing a Project on Your Land
 Topic: lease agreements |  Read Time: 7 mins |
 Landowner type:Independent landowners | Institutional landowners |  Energy: Onshore wind |
5th August 2024If you’re looking to host a wind farm development on your land, you might be wondering how the process works. From assessing suitability to planning permission and construction, this guide for landowners will walk you through each 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, developers will likely be eager to get turbines on your land.
If you’re not sure what this process actually entails (or how it might affect you), don’t worry. I’ve got you covered.
In this ultimate guide, I’ll explain everything you need to know. From option agreements and feasibility studies to financing and construction, I’m here to enlighten you on the process.
Let’s dive in and take the mystery out of 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 when seeking 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 first, 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
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.
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 you can recoup these initial costs.
But if the project doesn’t appear feasible at this early stage, developers will likely back out of it. However, planning permission should be easier to obtain after July 2024 as Labour has removed the de facto ban on onshore wind.
Step 2: Site selection, feasibility and option agreements
To start, let’s quickly run down what developers usually prioritse when seeking a site for wind farm development.
They’ll be investigating:
- Whether there are other successful sites in the area
- Measuring average wind speeds
- Checking for grid connection
This is usually done via a preliminary desktop study that gives the developer a decent overview of the site.
I’m seeing an increase in site operators looking to place turbines in areas that already have existing turbines. This is because it makes planning permission easier to obtain. So, if you already have a project on your land, the chances of being approached again are significantly higher.
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 likely reach out to discuss option agreements.
I won’t delve too deeply into this here as I 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. These include obtaining planning permission and carrying out a detailed feasibility study. These steps will help a developer and the local authority 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
- Wildlife and ecological considerations that may affect flying creatures like birds and bats
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 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.
Step 3: Planning permission
Before a site is fully financed, developers will be working on obtaining 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 lengthy process.
The government was previously looking to create accelerated approval for wind farms. The time taken for this was still set to be a year at minimum, down from an average of four years in England.
It’s worth noting that Labour made a decision to scrap the de facto onshore wind ban in July 2024. This was a huge step forward in obtaining planning permission in the UK. For starters, this takes a decent amount of responsibility away from overburdened local authorities. But there’s also less chance of the community vetoing new projects. In short, it’s a win-win for speeding up the approval process.
Even with new developments, the planning application process won’t necessarily affect landowners. This is because their land will typically be tied up by an option agreement. This agreement will usually run for the length of time it takes to achieve planning permission and adequate financing.
However, if the process stalls for any reason, a typical five-year option agreement can often be extended.
Step 4: Financing
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 low-carbon energy projects.
This includes major banks like Santander and Clydesdale Bank, HSBC and Barclays.
Now, securing adequate finance is something that I’ll discuss in detail in a separate blog.
But what landowners need to know at this stage is that developers will be securing significant funding for large projects.
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 lock in construction companies to build the turbines and start mapping out access roads.
These are all crucial steps to get the turbines up and running as quickly as possible.
Developers will also need to outline construction timelines and investment repayments to stakeholders at this stage.
If you’re concerned about timelines for construction, now is the time to ask your developer.
Any reputable developer will be happy to give you a rundown of expected project completion times.
Step 5: Construction
So, your developer has secured planning permission and adequate financing for the project.
All your developer needs to do now is construct the turbines.
Local companies are often brought in to complete civil works like roads, foundations and associated buildings for the project.
As for the materials required to build the turbines, specialist manufacturers usually supply these.
If all the necessary components are available in a manufacturer’s inventory, construction can take between six to nine months.
However, due to expected supply chain delays, the process usually extends to 12 months or more for a commercial site.
Luckily, experienced construction managers will handle most of this process. So, you won’t need to get involved in this phase directly.
Step 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. Otherwise, it’s time to let the passive rental income start flowing as the site begins to ramp up production once it’s commissioned.
It’s worth mentioning that if you’re relying on rental income as a percentage of the site’s output, this payment will fluctuate.
Wind farms typically take a few years to reach full capacity and tend to become more profitable as they recoup initial investments.
As the years go on, landowners should expect regular maintenance visits to keep the turbines in working order.
Once the turbines are operational, the wind farm will typically have a lifespan of 20 to 25 years.
A Developer Has Approached Me – What Should I Do?
If you’ve recently been approached for a potential wind farm development, you’ll need to consider a few things.
The first thing you’ll want to do is research the developer carefully. This way, you can decide whether you’re interested in doing business with them.
There are a few crucial things to look out for when choosing a developer.
Generally, they should be willing to share details about their previous successful projects, be open and 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, it’s time to check the option agreement very carefully.
I 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, be sure to present data that highlights its value.
With the right data in hand, you’re likely to secure a more lucrative option agreement than you would without any prior research.
If you’re trying to figure out how your site measures up to others around the UK, why not get a detailed look with SiteStart™?
We’ll provide a full review of what other sites are receiving in the market, so you can secure the best possible lease agreement.
Based on our findings, we can even negotiate the terms for you!
Final Thoughts
I understand that some landowners may have missed the initial wind farm development opportunity.
However, if you’re ready to explore the potential of your land after doing your research, there are still options available.
First, you’ll need to make sure that your land is suitable for wind farm development. Once you’ve had that confirmed, the next steps are up to you.
While developers typically approach landowners after assessing their site, if your land is not yet on their radar, start by checking the average wind speeds in your area to kickstart the process.
Realistically, the more data you have 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. We can help with option agreements and provide valuable data to support your negotiations.
