Looking at existing renewable contracts now can protect new contract income in the future
Farmers and landowners with existing wind turbine and renewable energy contracts are being urged to plan. Waiting until the final years of a contract could mean missing substantial financial opportunities or being excluded from future projects entirely.
D&R advises clients to act now, considering objectives and available options before developers approach with potentially restrictive, standard roll-over terms.
Ian Austin, Director and Head of Utilities, Energy and Infrastructure, said, “Many of Scotland’s first-generation wind turbine contracts expire in the next ten to fifteen years. While that timeline seems distant, delaying renewal decisions until the latter years could severely damage negotiation leverage and risk being cut from future repowering proposals. Advanced renewable technologies can provide major opportunities for financial returns if strategically planned.
“Ultimately, repowering is a completely new development that replaces older turbines with fewer but larger and more efficient models, which can trigger different land and access requirements and contractual obligations, differing significantly from a basic lease extension.”
Repowering requires the same advanced planning as the initial developments where 10-year option agreements were largely standard. Landowners should act now for the best opportunity of securing future development; early action can also secure the best financial outcomes and keep the farmer/landowner in control.
Ian said, “We are already looking at clients’ existing contracts with a view to helping them achieve the best outcome for their business. By engaging with us at this stage, our team can accurately assess the farmer/landowner’s land and ambitions, guiding them in forming a beneficial partnership with a developer. Potential opportunities include contract extensions, switching developers, or securing rent continuity payments during changeover periods.
“We urge anyone with ten to fifteen years remaining on their contract to start reviewing their options as soon as possible. If a farmer or landowner is in the 10-15 year timeframe, they should contact their agent now and most certainly before signing any paperwork or preliminary agreements, including exclusivity agreements, presented by the existing developer.”
Those looking to review their renewable contract and explore future opportunities can contact the D&R Utilities, Energy, and Infrastructure team on 0131 449 6212 or email utilities@drrural.co.uk
