This article might seem a little futuristic in South African times, let’s rather be proactive.
Wind energy presents exciting new opportunities for many farmers, and those farmers who wish to make productive use of the wind on their farms have many different development options. Projects come in many different sizes and styles, and farmers have a range of opportunities to invest in, and benefit from, the wind.
But it takes more than just wind to make a wind energy project work. Even the
smallest wind turbines require time, money, and some technical expertise. For
very large commercial-scale projects, the stakes are even higher, and a successful
development requires tenacious advocates, the local community’s support,
and—perhaps most importantly—access to a market for the generated electricity.
One primary obstacle new wind energy projects will face is simply the electric
grid itself. The grid is stationary, and its limited capacity can be easily taken up
by electricity from traditional energy sources, such as large coal-burning power
plants. To be able to sell energy and be financially viable, a wind project must be
located close enough to the grid to connect with the local power lines, and there
must be sufficient capacity on those electric lines to make them physically
available to transport newly generated wind energy. Our local refit program
is still being finalised.
However, even in the best location, successful development of a wind resource
will require overcoming legal obstacles as well, namely the requirements
imposed by the tremendous variety of complex and ever-changing laws that will
affect a wind development project. Legal issues will arise at every stage of wind
development: in contracts with consultants to explore the wind resource; in state
and local regulation of project siting; in agreements allowing use of land for
wind turbines, transmission lines, and other project activities; in loans and
capital investments needed to finance the project; in formation of a business
entity, if desired, to own and operate the project; in contracts to purchase and
install wind turbines and other equipment; in planning for potential liabilities
associated with the project; and—most dauntingly—in negotiations with electric
utilities, entities subject to an enormous amount of regulation, for transmission
and purchase of the generated electricity.
This guide is intended to help farmers understand the legal backdrop they must
navigate in order to pursue wind energy development. It does not promote any
one choice over another, nor does it provide a perfect roadmap to a single
successful development model. As is true of any type of enterprise, some wind
projects will fail. To guard against this, farmers interested in developing a wind
resource must learn as much as they can about the technical and legal
requirements of the industry and seek individualized assistance from experts.
While some aspects of this legal framework are imposed by
state or federal regulation, others are created through private contracts with
electric utilities, neighboring landowners, creditors, investors, contractors, and
others.
Finding and hiring an experienced and knowledgeable attorney to work with
throughout the project development will be necessary to successfully identify and meet the legal
challenges of developing a wind resource and will represent a farmer through the
entire development process, and this cannot be emphasized enough. In addition,
other experts—including engineers or wind development consultants—can be
useful for tackling the technical design and managing the financial cash flow of a
wind project. The wind is a valuable resource, and farmers should not let
misunderstanding or ignorance of the law prevent them from making the most
of their wind energy opportunities.
Legal aspects of renewable energy solutions will be discussed at the GREENEX2010
conference and expo in Johannesburg South Africa during May 2010.
