Member Article

Small scale wind farms for landowners

Atmos Consulting consider the feasibility of wind power for landowners.

Uncertainties surrounding the UK’s rural economy mean landowners are searching for ways to diversify the use of their land. An option that is becoming increasingly attractive to landowners is the installation of wind turbines on their landholding.

This is highly profitable, thanks in part to schemes such as Renewables Obligation Certificates (ROCs), which create a market for renewable energy by requiring the energy companies to buy a proportion of the power they distribute from renewable sources, and Feed-in Tariffs (FITs), which provide a guaranteed income for operators. This means that landowners with suitable sites can reduce their energy costs and earn a fixed income.

But how do landowners know whether building a wind farm on their land is feasible? And can landowners cut out the traditional middleman of established wind developers to reap the financial benefits themselves?

Landowners can choose to go it alone, and while the upfront costs of detailed planning and construction are significant, which increases the risk, the reward could ultimately make it worthwhile. Alternatively landowners can lease their land to developers, a simpler no risk solution but which diminishes the financial return.

Thanks to FITs there has been a surge in smaller wind farm (below 5MW) applications. The FIT scheme is designed to encourage landowners to generate their own energy, which enables smaller schemes to come to fruition that might otherwise be glossed over by large developers.

The amount you have to invest to find out if a project is feasible is really very low. The potential income from wind turbines is significant, and it is always worth at least checking to see if your land is suitable. There is plenty of experience and expertise for landowners to call on in order to find out if they can join the boom.

“As long as a site has sufficient wind resource and a viable grid connection, and is not constrained technically and environmentally (e.g. by proximity to local settlements or the local ecology), then it could be suitable for development,” says Lauren Mortimer, Project Manager based at environmental specialist Atmos Consulting’s office in Stanhope,
County Durham. “We can quickly do the initial desk research so you can make an informed decision about progressing to detailed site surveys.”

Thereafter, consultants can guide a project right through the planning process, manage the construction phase, arrange connection to the grid and organise contracts with energy companies. There is no need to share the income with a third party operator.

In the UK there are currently 309 operational onshore wind farms, 35 under construction and 253 consented. 346 are in the planning stage and approval rates are declining. In 2005 71% of wind farm planning applications were approved, falling to 67% in 2009 and just 52% in 2010. However, a new trend is emerging in which smaller (sub 5MW) schemes are much more likely to gain planning permission than larger (greater than 5MW) schemes. For example, in England during 2010-2011 projects of 5-20MW achieved a 43% approval rate. However schemes below 5MW were much more successful, with 79% of capacity in projects between 2-5MW approved. This increased to an approval rate of 83% capacity for schemes below 2MW. Falling approval rates is worrying considering the country’s renewable energy targets and future energy security needs, but it does also highlight the importance of proper preparation for a planning application.

Lauren points out that it is primarily public and environmental interests that determine whether a wind turbine scheme will gain planning consent or not, and consultants with environmental credentials are always going to be the best partners in the early stages of a project. The environmental aspects of wind farms, such as noise and their position within a landscape, are now well understood and must be rigorously assessed, which means an environmental consultant should be the first port of call.

Consultants can ensure that you, as an independent developer, work closely with planning authorities, local residents and statutory consultees to allay any concerns and to ensure that the project is designed sensitively. Keeping perceptions of proposed wind farms positive will help gain and retain public opinion, and ultimately secure planning permission. With the government’s Localism Bill, which returns power to councils and communities, just around the corner, community involvement will be in the spotlight.

Other, non-technical factors land owners should take into account when evaluating the feasibility of a wind farm development include:
• Sales of property: Wind farms may complicate the sale of a property.
• Access: Although a wind turbine has relatively small footprint, the need to
maintain and repair it may affect farming and livestock operations.
• Equipment: Erecting wind turbines often require heavy industrial equipment, such as the installation/maintenance of transmission equipment.

This, of course, can result in jobs that benefit the local economy.
• Insurance: Land owners should review their insurance as a wind farm may affect a policy’s coverage.
• Taxes: Wind farms may have implications to property taxes. Also, there will be taxes to pay on the sale of electricity generated. Landowners should discuss this with a financial advisor.

This was posted in Bdaily's Members' News section by Jim Round .