Wind Lease Contracts for Landowners

August 15, 2008 at 7:00 am 2 comments

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?

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Size Matters: From an Energy and Environmental Standpoint, the Larger the Livestock Farm the Better (part 3) No Wind Turbine Controversy Here . . . Yet

2 Comments

  • […] January 27, 2009 On Monday, January 26 I attended another large-scale wind energy meeting in Van Wert.  The meeting featured Ohio Farm Bureau’s Dale Arnold as well as Iberdrola Renewables Wind Land Consultant Dave Dickson.  This post is more or less a followup to one of the first posts I did on wind energy (click here for that post). […]

  • 2. R. A. Ray  |  June 29, 2010 at 4:33 pm

    The Bowling Green Windmill Farm has reported that wind in Ohio is stronger than expected. One writing said that on average they are producing about 33% rated capacity. I had guessitmated 20-25%. I would say yes we have the wind.

    The Next 2 questions: 1. how much of the wind generated power do the Electric Companies have to purchase? 2. AT what price per KWH?

    AT 30% average and at 10 cents per KWH, one 2MW turbine would GROSS $526,960/year if the Electric Companies are required to purchase all the turbines output.

    A lease price of $5,000 per year without any increases for inflation is really a windfall for the foreign companies!

    I saw 2 blades parked on west bound roadside rest on 6/27/10. Many communities want a piece of the windmill pie.


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