The Anatomy of a Wind Farm Contract – Part 3

 

In Part 1 we looked at the nature of the Option granted by the landowner to the wind developer, which effectively placed the use of the land beyond the control of the landowner, often for relatively small sums of money, whilst the developer did what they needed to do to the land in order to get planning permission for their wind farm.

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In Part 2 we considered the payment provisions, which again, contained many “ifs and buts”. The values looked impressive, but it became clear that the landowner might have to wait a long time for that money, if there was going to be any money at all. The wind developer can simply walk away if their plans do not come to fruition, and the landowner is left holding the pieces, which will not necessarily include the thirty pieces of silver.

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Today I would like to look at some of the duties that the landowner is obliged to perform. Again, many of these would be in the hope of receiving money, as opposed to actually being paid to do these things.

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On the face of it, the landowner does not have to do much at all, at the beginning of the contractual relationship, in any event. Most of these duties consist of standing aside and allowing the wind developer free rein with your land. The landowner must just allow the wind developer to use the land as if it were the owner.

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The landowner leases the land on which is situated the “Development Area”.

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In the Definitions section of the wind farm contract (the lease portion) we find the following:

“the Development” the wind farm development which the Tenant proposes to construct and operate on the Premises and other lands adjoining, adjacent or in the vicinity of the Premises with a view to the commercial generation of electricity by wind power, and “the Development Area” is the area outlined in blue on the Plan in Schedule #”.

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In other words, this describes the wind farm itself, and all equipment, structures etc. connected to that wind farm, either on the whole, or specified portion, of the landowner’s land.

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It is generally accepted that an area of two hectares is required per wind turbine. A landowner should insist on a clause to protect their right to continue to use the remainder of their land for its original use, if that is possible. So a farmer could continue to use the rest of his farm to grow crops or raise livestock. As previously mentioned, if the landowner is a farmer leasing agricultural land, then the lease agreement should also contain provision to indemnify the landowner against any loss that may arise as a result of the Department of Agriculture refusing or seeking a refund of any payments such as Single Farm Payments, REPS, AEOS, Forestry Payments and so on, but remembering that there is a real danger that the land will no longer be considered as agricultural land for the purposes of these payments or for taxation purposes.

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The spread of this wind farm is not necessarily restricted to this “Development Area” however, as the contract goes on to describe all the other stuff necessary to run a working wind farm:

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“Accommodation Works” means the construction  of access  roads (temporary or permanent) necessary for access  to the Wind Turbine(s), (temporary or permanent} crane pads for the assembly of the turbines, the control buildings, the Cables, the Conducting Media or any other Tenant’s equipment on the Development Area (ii)the opening of temporary quarries for the production of road making materials  for  the construction of access roads whether temporary or permanent necessary for access to the Wind Turbine(s),  the control buildings, and the Cables”.

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This describes all the excavation, road building and building of structures that is necessary to adjoin the working wind farm. Specifically are mentioned “the Cables” and the “Conducting Media”, which again need to be attached to, or inserted into, the land.

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These are further defined:

“The Cables” include any wire, cable, tube, pipe, conductor, or other similar thing (including its casing or coating or protective tiles) placed on above or in the ground for transmitting and/or distributing  electricity  together with communication cables and other ancillary equipment, Drain pipes, wire Cables and other conduits.

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In other words, this is all the stuff that is buried in the ground, including a load of heavy duty electrical cabling and conductors. The landowner must not hinder the installation of this subterranean smorgasbord of pipes, cables and wires that will crisscross the land.

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“Conducting Media” Conducting Media or any other Tenant’s equipment on the Development Area and/or the premises ( iii) construction of control buildings, sub-stations and installation of associated equipment to connect to the grid system (iv) the construction and widening of accesses to and from the Development and for the Permitted Use (v) the laying of underground Cables and Conducting Media necessary for the  Development and Permitted  Use (vi)  the  construction of temporary or permanent storage areas necessary for the Development and Permitted Use (vii) construction installation, repair, maintenance, replacement, renewal and decommissioning of Wind Turbine(s) on the Development Area including without prejudice to the generality of the foregoing the construction  and  laying  of  foundations for Wind Turbine(s) for the Development and Permitted Use  (viii) wind measurement mast (ix) any other works reasonably necessary for the Development and the Permitted Use.

 

This describes (somewhat cutely) all the substation construction and related construction which must take place on the landowner’s land and/or adjoining land. This construction must be completed in order to allow connection to the grid. It also describes the huge block of concrete that must be sunk deep into the ground in order to provide a stable foundation for a turbine that is taller than the Dublin Spire. When you have a whole field of these things, that’s a lot of concrete. What will that do to your groundwater? Can you imagine the damage that this will do to a farm and how long that farm will need to recover once the wind developer leaves?

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Good luck with removing all of that when the wind developer leaves the country or sells to a shell company that has its head office in a letterbox.

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This is an important point. Who must remove these monstrosities when wind power is finally recognised as wholly ineffective, the subsidies dry up, and the developers vanish overnight?

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One of the duties of the Wind Developer under the Lease is described as follows:

‘At the expiration or sooner determination of the term of this Lease quietly to yield up the Premises to the Landlord and within six months there from but without obligation to do so unless required by the Landlord to remove from the Premises the Tenant’s equipment above ground level and wherever possible to remove all subterranean structures and cables.’

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Hmm. I’m glad to see that the wind developer promises to go quietly but the rest of this clause makes for scary reading. The developer will not remove anything until expressly asked to do so, which means that the landowner needs to be aware that he has to ask, as it will not be volunteered!

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The underground structures and cables will only be removed “wherever possible”. Who decides whether it is possible? I would guess that the wind developer makes that decision, so good luck with that. Is it possible to remove huge lumps of reinforced concrete from the ground? Well, I suppose anything is possible, but that depends on who is defining ‘possible’.  Is it possible to remove 25 years’ worth of contaminated soil and groundwater? I doubt it.

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And that duty only mentions structures and equipment. What about the roads that were constructed for access to the wind farm? These are often extremely wide giant-sized roads, as they must be able to accommodate super trucks with their monstrous flatbed trailers that carry the extreme loads of gigantic turbines and blades. That might affect a good portion of previously arable land which cannot be used for anything else, at least for some time, particularly if the ground is soggy (this is Ireland!) when these monster trucks drive over it.

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windroad1 windroad2

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This is where a lot of landowners are misled. Whilst the mentioned operational area might only be a small portion of their land, the legal burden extends to the whole of their land in that they are restricted from dealing with their land, whilst the physical impact on their land can extend significantly beyond the neatly defined ‘Development Area’. When you consider the amount of additional building and digging and road-making that goes on, and to top it all, when you realise that all traces of that must be removed before the land can be used for anything else, that definition of the Development Area is a joke.

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Assuming you do get some money out of the developer, can it ever be worth that?

 

About Neil van Dokkum

Neil van Dokkum (B. SocSc; LLB; LLM; PGC Con.Lit) Neil is a law lecturer and has been so since arriving in Ireland from South Africa in 2002. Prior to that Neil worked in a leading firm of solicitors from 1987-1992, before being admitted as an Advocate of the Supreme Court of South Africa (a barrister) in 1992. He published three books in South Africa on employment law and unfair dismissal, as well as being published in numerous national and international peer-reviewed journals. Neil currently specialises in employment law, medical negligence law, family law and child protection law. He dabbles in EU law (procurement and energy). Neil retired from practice in 2002 to take up a full-time lecturing post. He has published three books since then, “Nursing Law for Irish Students (2005); “Evidence” (2007); and “Nursing Law for Students in Ireland” (2011). He is an accredited and practising mediator and is busy writing a book, with Dr Sinead Conneely, on Mediation in Ireland. His current interest is Ireland’s energy policy and its impact on the people and the environment. He is also researching the area of disability as a politico-economic construct. Neil is very happily married to Fiona, and they have two sons, Rory and Ian.
This entry was posted in Democracy; Ireland; Fine Gael; Labour; Sinn Fein; Workers; Constitution, EirGrid; Insurance; Law; Cancer; EMF, EU Renewable Energy 2020 Target, Green Party; Ireland; Eamonn Ryan; Cormac Manning, Irish Farmers Association; IFA; wind farm contracts, NREAP; National Renewable Energy Action Plan; EU Commission; Aarhus Convention Compliance Committee; ACCC, Planning and Development Act 2000; guidelines; directives; Sections 28 & 29, Planning Permission; Extension; Planning and Development Act, Wind Farm Contract and tagged , , , , , , . Bookmark the permalink.

3 Responses to The Anatomy of a Wind Farm Contract – Part 3

  1. Pat OBrien says:

    Thanks Neil

    On 3 March 2016 at 15:51, The Law is my Oyster wrote:

    > Neil van Dokkum posted: ” In Part 1 we looked at the nature of the > Option granted by the landowner to the wind developer, which effectively > placed the use of the land beyond the control of the landowner, often for > relatively small sums of money, whilst the developer ” >

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