LEGAL EAGLES
DON’T BE HELD TO RANSOM
You have consent for a wind farm and it is all systems go. Well done. You are even more pleased as there are other wind farms in the area so you are content with wind
yield. However, buried away is a potential issue that could scupper or seriously delay the build – read on…
RESTRICTIONS BINDING THE SITE Where a proposed wind farm site is located on land within the same land ownership as is subject to existing wind farm lease(s) there will usually be restrictive covenants binding the landlord’s retained land.
These will often include specific restrictions on, for example, height of structures and uses of the retained land together with more general restrictions as to not interfering with the operation of the existing wind farm and the flow of wind to it.
These restrictions can become problematic for the landowner and potential tenant of the new wind farm if they bind the proposed site. If the
existing leases do not already incorporate a procedure for addressing these issues it will then be necessary to commence discussions with the existing wind farm tenant to vary their lease(s). They will usually not have any real incentive to try and reach a swift conclusion to any negotiations and so this can potentially result in significant delays and increased project costs.
WIND DISTURBANCE
Unsurprisingly, one of the main concerns for the existing wind farm operator will usually be the potential impact on wind flow to their wind farm if the proposed new wind farm is constructed nearby. The parties might therefore agree to procure a technical assessment by a jointly agreed consultant in order to model the likely wind disturbance and the resulting reduction in generation revenues and potentially increased operations and maintenance costs for the existing wind farm.
This can then be used as the basis for a single up front compensation payment or various staged payments throughout the term of the lease with the aim of placing the existing wind farm operator in no better or worse position than if the new wind farm was not constructed. The calculation should be based on various assumptions which, if changed, would require further technical modelling. For example, the position of turbines being relocated or a different specification of turbine being used.
DOCUMENTING THE AGREEMENT As part of the settlement of the wind disturbance claim there will usually need to be a variation of the existing wind farm lease(s) to carve out the construction and operation of the new wind farm from the landlord’s restrictive covenants.
FEATURE SPONSOR
Again, such variations will generally be limited to permitting the new wind farm to be constructed and operated in accordance with agreed drawings and specification or an existing planning permission but with some tolerance for changes to the proposed layout such as micro-siting or other aspects which will not in practice impact on the existing wind farm – for
example cable routes or access tracks.
The developer of the proposed new wind farm will also want to ensure that the settlement agreement specifies that the agreed compensation is in full and final settlement of any claims, both in contract and also in tort, for example nuisance.
CONSTRUCTION PHASE
Depending on the interaction between the existing wind farm and the proposed wind farm it will also be necessary to consider the impact on, for example, access tracks and grid connection. The existing wind farm operator will want to ensure that any jointly used access tracks for which it contributes to repair and maintenance costs are made good following the construction of the new wind farm without any cost to the existing wind farm operator.
It may be necessary for the distribution network operator to temporarily disconnect the existing wind farm from its distribution network in carrying out the connection works for the new wind farm. If this is agreed the existing wind farm operator will want to ensure it is indemnified for loss of generation revenue.
CONCLUSION
It is therefore important for the project team to identify any need for the landowner to negotiate with its existing wind farm tenant at an early stage in the process, well in advance of financial close, and for the technical and legal members of the project team to work together in seeking to achieve a satisfactory position for both the existing wind farm operator and the developer of the proposed new wind farm.
Peter Mason Addleshaw Goddard LLP
94
www.windenergynetwork.co.uk
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116