Landowners planning to install any renewable energy project should give greater consideration to the implications for future development opportunities for the farm business.
Most installations should last at least 25 years so it is vital to consider how potential residential and agricultural developments could be affected over that entire period as part of a long-term business plan, said Darren Hirst of Bidwells.
Rushing to develop projects without proper long-term business planning could have unintended consequences, in a similar way that some landowners got caught out in the telecoms rush of the 1990s when installing a mast seemed an easy way to make money with few downsides. Dr Hirst says history shows that occasionally some such sites can become troublesome due to downward pressure on rents and difficulties removing masts when leases expire.
While renewable energy projects are different, he highlights a few key points to be aware of when planning projects.
“It is not uncommon for developers to include provisions within their leases giving them an automatic right of renewal, subject to other consent being obtained. This effectively extends the life of the project to 50-plus years. This should be avoided wherever possible and any extension to the lease should be at the farmer’s discretion,” he adds.
Consider whether any areas of the farm might be developed for housing over the next 25 years and check their proximity to the proposed installation. Noise criteria could limit where developments can go and may be more of an issue for larger wind turbines (for example 250kW-1.5MW). Certain turbines also have tonal characteristics which can extend their noise footprint beyond that of other turbines of similar rated capacity.
Wind turbines often require areas known as wind protection zones (WPZ) to maintain a clean airflow to the turbine, which may restrict future developments (residential and agricultural) within that zone. This is especially important for smaller turbines with a lower hub height and where a steading lies within the WPZ.
Also consider how any project fits with possible minerals extraction opportunities, or farm expansion plans. Hydro installations, for example, require a minimum water flow to be maintained, which could impact on the potential for the farm to expand if water is being abstracted for irrigation.
Installation of renewable energy projects uses up grid capacity on the local distribution network, which could restrict future developments or incur significant grid upgrade costs.
Careful consideration also needs to be given to the location of the substation and route of power lines to avoid bisecting or sterilising potential development areas. While a distribution network operator (DNO) will provide an initial route for the line, these can be varied to accommodate local requirements.
Depending on the income generation of the existing farm business, farmers need to be clear how larger-scale renewable energy schemes could affect their agricultural trading status.
Also consider if land is in the right ownership or should be transferred to the next generation and whether a big inheritance tax bill could limit future plans.