Wind Lease Contracts for Landowners

In Van Wert County, Ohio we have several Wind Energy Companies shopping landowners for acres. I have seen lease and payment arrangement terms for two of these wind energy companies. I won’t give you specific details of each lease, but I’ll share some commonalities. Frankly, the leases and terms are similar for the most part. OK, here we go:

Phase I – Research

• lasts 3-5 years
• meteorlogical (referred to as ‘met’) tower(s) erected
• payment can be as much as $2000 per year per landowner

Phase II – Construction and Operation

• lasts 30 years with option to extend the contract for an additional 20 years
• density of turbines and number of landowners involved varies per project
• payments to an individual landowner are based primarily on number of turbines and/or electricity generated (note: other factors come in to determining payment, but to a lesser extent)
• 80 acres with one turbine can provide $5,000+ per year to a landowner (this may or may not depend on power generation); assume 1.8-2 MW turbine
• lease may or may not include payment adjustment based on Consumer Price Index; lease payments based on MW generation will likely not have CPI adjustment

Phase III – Renewal or Decommission

• after 30-50 years the project will be renewed
• if the project becomes obsolete, the project will be decommissioned

Summary

Wind energy development is definitely a hot issue in my locality. It is important to point out that the companies working in my area are interested in developing utility-scale wind farms, not wind farms for individual use. The projects are in the 100-300 MW range, which translates roughly into 100-200 wind turbines.

Speaking with the the companies that are interested in my area, the availability of utility grade transmission lines is a big asset. Van Wert County has a 345kV transmission line bisecting the county east to west. Now the question becomes, do we have the wind necessary to make wind farms feasible?