Extending the life of windfarms is increasingly being seen as an alternative to – or a means of postponing – repowering.
It might be possible to eke out from suitably managed wind turbines a further 5 – 10 years or possibly more of operation beyond the expiry of the term of the average windfarm lease. Developers’ capacity to benefit from this is likely to have implications both on the consenting side and in relation to the project leases.
Maintenance, improvement or other alteration of turbines does not require planning permission, unless the works materially affect the external appearance. However, wind farm consents are typically subject to a condition that the consent is limited to 25 years from date of commissioning. Extending the life of the windfarm requires variation of that condition and variation will involve cost.
An application to vary a planning permission condition – a section 42 application in Scotland; section 73 in England and Wales – has a restricted scope: the planning authority can only review the conditions. It is not clear what planning grounds would justify a refusal to vary the condition.
For 50+MW schemes consented under section 36 of the Electricity Act, the variation requires a section 36C application, as the 25 year life condition is not imposed as part of the deemed planning permission.
It seems unlikely that a life extension would have significant adverse effects on the environment and therefore require environmental impact assessment.
Windfarm land lease durations are often around the 27-30 year mark, including construction and decommissioning time. If the operational life of the windfarm is to extend beyond that period then there might be one of three ways for the developer to achieve this:
• exercise any right in the project lease to extend the duration of the lease;
• negotiate an extension of the duration of the existing lease;
• negotiate a fresh lease.
If the project lease contains a right to extend and that right to extend is definitive (for example, the term and the rent for the extended period are set out in the current lease and are workable) then the developer’s path may be fairly smooth. If the right to extend is more of an agreement to agree to extend then there may be more negotiation involved.
Negotiation of an extension of the lease, or of a fresh lease, may both take time and will depend on reaching commercial agreement with the landowner in what will be a free negotiation. Negotiation of an entirely fresh lease should not be necessary in most cases.
If the landowner has been receiving rent for decades and is looking at an extension of the life of that income stream then presumably the landowner will be incentivised to do a deal with the developer. Whatever approach is taken to obtaining the required land rights, we recommend that discussions with the landowner start early and in advance of any planning application. The sooner there is certainty across the required suite of project leases the better.
We recommend that developers anticipate early what they will need by way of land rights and consent variation to accommodate any extension of the operational phase of the windfarm – and that they commence any required negotiations with the landowners and then the planning authority well before the proposed extended operational period is to start.
On August 21, 2018