& Leases
10. Final Notes
10.7 Final Considerations
By signing a lease with a developer, the landowner should be aware that the lease may preclude the development of additional buildings and/or structures on the property. Legal counsel can advise the land-owner what impact the lease will have on the property.
A landowner should also consider any impact that may be caused to the property value by having wind turbines. There are no known studies of the impact of wind facilities on property values in Ontario.
In the U.K., the Royal Institute of Chartered Surveyors (RICS) released a study in 2005 that found 63% of professional property value asses-sors felt wind turbines had no negative impact on agricultural
prop-erty value.9 9 www.rics.org ‘Wind Farms Final
Report.pdf’
Finally, as with all business transactions, there is the risk that one party may become financially unviable. While the situation is unlikely, it is to the benefit of the landowner to ensure the lease agreement satisfactorily addresses their concerns in the case of bank-ruptcy.
Appendix A
Standard (Nominal) Power Rating & Swept Area
Note that in the following table the rotor diameter is used to cal-culate the area swept by the rotor and this is then used to estimate the amount of electricity that the wind turbine will produce at a site with a 6 m/s average wind speed at hub height. This is equivalent to an annual specific yield of 770 kWh/m2/yr. The power rating is an approximation only used to provide reference. It is not used to calcu-late the electricity that could be produced.
Standard Power Rating (Nominal)
0.35kW/m2 Nominal
Generation Rotor Diameter
(m) Swept Area (m2) Nominal Power kW
@ 6 m/s Hub Height Avg. Wind Speed
(Avg. Annual Yield of 770 kW/m2/yr) kWh/yr
12 110 40 85,000
15 180 60 139,000
18 250 90 193,000
20 310 110 239,000
25 490 170 377,000
30 710 250 547,000
35 960 340 739,000
40 1,300 460 1,000,000
45 1,600 560 1,230,000
50 2,000 700 1,540,000
55 2,400 840 1,850,000
60 2,800 1,000 2,160,000
65 3,300 1,200 2,540,000
70 3,800 1,300 2,930,000
75 4,400 1,500 3,390,000
80 5,000 1,800 3,850,000
85 5,700 2,000 4,390,000
90 6,400 2,200 4,930,000
95 7,100 2,500 5,470,000
Appendix B
Sample Revenues from Royalty Payments on a Land Lease
Year 1 Payment/
kWh
$0.08
Inflation 3%
Portion of Payment Indexed with Inflation
15%
Discount Rate
6%
Year Payment/
kWh Royalty Revenue Total
Revenues Net Present Value of Contract Revenues 1 $0.08 0.02 $6,400 $6,400 $6,000
2 $0.08 0.02 $6,400 $12,800 $11,700
3 $0.08 0.02 $6,500 $19,300 $17,200
4 $0.08 0.02 $6,500 $25,800 $22,300
5 $0.08 0.02 $6,500 $32,300 $27,200
6 $0.08 0.02 $6,500 $38,800 $31,800
7 $0.08 0.02 $6,600 $45,400 $36,200
8 $0.08 0.02 $6,600 $52,000 $40,300
9 $0.08 0.02 $6,600 $58,600 $44,200
10 $0.08 0.02 $6,700 $65,300 $48,000
11 $0.08 0.03 $10,000 $75,300 $53,200
12 $0.08 0.03 $10,100 $85,400 $58,200
13 $0.08 0.03 $10,100 $95,500 $63,000
14 $0.09 0.03 $10,200 $105,700 $67,500
15 $0.09 0.03 $10,200 $115,900 $71,700
16 $0.09 0.03 $10,300 $126,200 $75,800
17 $0.09 0.03 $10,300 $136,500 $79,600
18 $0.09 0.03 $10,400 $146,900 $83,300
19 $0.09 0.03 $10,400 $157,300 $86,700
Appendix C
Wind Energy Royalty Revenue Calculator
Energy Generation Estimation
Enter
Values Units Results Units
Enter Hub Height Average Annual Wind Speed in m/s in whole and half values, eg.
7.5
6 m/s 770 Specific
Yield in kWh/m2/yr
Enter Rotor Diameter in meters (see Typical Turbine For possible values)
82 m 5,300 Swept Area
in m2
Annual Energy
Output 4,081,000 kWh/yr/unit
Enter Availability for Operation (Typical values from 90% to 98%)
98 % 3,999,000 kWh/yr/unit
Enter Array Losses (for single turbine use 0%, for large arrays use 5% to 10%)
0 % 3,999,000kWh/yr/unit
Appendix D
Land Pooling Among Neighbouring Landowners
European landowners often form a land pool or association when approached by wind developers. For example, if a landowner’s portion represented 50% of the land pool, they would receive 50% of the land lease payment even if they had no wind turbines installed on their parcels. Landowners with wind turbines or other structures receive payments in addition to the land lease payment
Source:
Collection of European Experiences in Local
Investment, European Action for Renewables (Predac), Comité de Liaison Energies Renouvelables, Paris, January, 2003, www.cler.org/predac.
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Appendix E
Our many thanks to the reviewers who helped in the making of this guide:
Ken Baigent, Mark Bell, Paula Boutis, Alisha Chauhan, Steve Clarke, Ted Cowan, Liz Cussans, Deb Doncaster, Jason Edworthy, Doug Finlay, Doug Fyfe, Jen Heneberry, Dave MacLeod, Claude Mindorff, Steve Sottile, David Timm, Bob Younkers and Melinda Zytaruk
Additional Sources of Information
It’s wise for landowners to do their homework first before signing a lease. There is a lot of information on the internet. Some links are provided here. There are books on wind energy that explain how wind turbines work and how much electricity they will generate.
Both the Ontario Federation of Agriculture and the National Farmers Union have reviewed wind development leases in the province. They may offer guidance to members.
Links to Documents on the Internet
“Wind Energy Easements Legal Issues,” by Robert R. Nardi & John H.
Daniels, Jr., Windustry, Minneapolis, Minnesota, undated, 8 pages, www.windustry.org/opportunities/easements.htm.
“A Landowner’s (Informal) Guide to Negotiating for a Wind Farm”, by the State of Montana, Department of Environmental Quality, Helena, Montana, August, 2003, 5 pages, www.deq.state.mt.us/
Energy/ Renewable/LandownersGuiToWind.pdf.
“Landowners’ Frequently Asked Questions about Wind
Development,” by Jay Haley, U.S. Department of Energy, Energy Efficiency and Renewable Energy, Washington, DC, undated, 4 pages, www.eere.energy.gov/windpoweringamerica/ pdfs/
wpa/34600_landowners_faq.pdf.
“Wind Farm Development and Operation Standard Land Lease Agreement”, by Ma kWind (private wind development company operating in Great Scotland and Germany, Reiff, United Kingdom, undated, 3 pages, www.ma kWind.com/lease.htm.
“What Landowners Should Know”, special to the Nebraska Energy Quarterly, Nebraska Energy Office, Lincoln, Nebraska, 3 pages, undated, www.nol.org/home/NEO/neq_online/oct2003/oct2003.02.
htm.
“Windy Land Owners Seminar”, by Vaughn Nelson and Ken Starcher, Alternative Energy Institute, West Texas A&M University, Canyon, Texas, March, 2002, see “Contracts” section, www.windenergy.org/
Land302_files/v3_document.htm.
“Landowner’s Guide to Wind Energy In the Upper Midwest”, by Nancy Lange and William Grant, Izaak Walton League of America, St. Paul, Minnesota, 49 pages. Available only as a hard copy by post-ing an electronic message to [email protected].
News Groups or Lists
Windustry’s Wind Farmers Network sponsors a list discussing land leases. The topic is listed as “Have you been approached by a wind developer?”
Books on Wind Energy
Wind Power: Renewable Energy for Home, Farm, and Business, by Paul Gipe, Chelsea Green Publishing, White River Junction, Vermont, 2004, ISBN 1-931498-14-8 paper, 1-931498-60-1 cloth, 512 pages, www.chelseagreen.com/2004/items/windpower.
Wind Power in View: Energy Landscapes in a Crowded World, edited by Martin Pasqualetti, Academic Press, San Diego, California, 2002, ISBN 0125463340, 234 pages with index, www.academicpress.com.
Spreadsheets
“Wind Energy Royalty Revenue Calculator” is a multi-tab spread-sheet for calculating the potential revenue from royalties on wind energy land leases. The spreadsheet is available for downloading from the OSEA web site at www.ontario-sea.org/Far MWind/WindEn ergyRoyaltyRevenueCalculator.xls.
Contacts
For information regarding the Ministry of Natural Resources online wind map for Ontario contact:
Mike Belcher
Manager, Sustainable Review Strategy Land Management Section
Ministry of Natural Resources
Robinson Pl South Tower, 5th Floor S., 300 Water St PO Box 7000, Peterborough, ON K9J 8M5
Phone: 705-755-1279
Email: [email protected]
For more information regarding net metering in Ontario:
Hydro One Net Metering Information Line Call 1-866-280-7712 for more information.
Existing net metering agreement form can be found at:
http://www.cansia.ca/downloads/hydroone_net_metering_agree-ment_form.pdf
401 Richmond Street West, Suite 401 Toronto, Ontario M5V 3A8
Ph: 416-977-4441 Fax: 416-977-2157 www.ontario-sea.org