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Wind options

Helping a landowner choose the best option for a wind project on his farm.

A landowner from the north east Scotland approached CKD Galbraith's Elgin office with various options for a wind project on his farm. Options included renting the land to a developer, entering into a joint venture or carrying out a development themselves

The farm was most suited to a medium scale development, due to the proximity of other dwelling houses, access to the site and availability of grid connection. CKD Galbraith, along with the landowner's other professional advisors examined all the options, including income and expenditure, tax, inheritance and ownership structures. The financial implications of the project could have a significant bearing on the profitability and cash flow of the farm, so the landowner was keen that these should be reviewed carefully. It was also important that tax and inheritance issues were examined, as the landowner has a young family who will look to inherit the farm, and therefore the wind turbine, in due course.

After reviewing the advice, the farmer decided to rent some land to a developer who would look to erect a 500kW turbine. The farmer would receive an annual rent, plus an additional payment based on the income generated by the turbine. CKD Galbraith were again involved in negotiating the Heads of Terms, which involved specifically examining the rental payments, options fees, and the areas of land to be let. Once the terms were agreed, the matters were passed to the legal teams for both sides, who are currently finalising the Option and Lease paperwork. A planning application for the project has now been submitted, with the outcome expected in the second half of 2011.