Wind Turbine Lease
Education Program
Ron Haugen
Project Director
North Dakota State University
Extension Service
Extension Risk Management Education National Conference
St. Louis, Missouri
April 12, 2011
3/10/2016
Grants Provided by
North Central Risk
Management Education Center
GRANTS:
• Wind Turbine Lease Education Program
• Wind Turbine Lease Provisions and North
Dakota Regulations Education
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Background
• Wind power potential
• Questions about leases
3
2007 Installed Wind Power – 16,818 MW
3,500+ under construction
4
5
United States Annual Average Wind
Power Potential
6
Wind Energy Potential
THE TOP TWENTY STATES for Wind Energy Potential
as measured by annual energy potential in the billions of kWh, factoring in environmental and land
use exclusions for wind class of 3 and higher.
B kWh/Yr
1. North Dakota
2. Texas
3. Kansas
4. South Dakota
5. Montana
6. Nebraska
7. Wyoming
8. Oklahoma
9. Minnesota
10. Iowa
1,210
1,190
1,070
1,030
1,020
868
747
725
657
551
B kWh/Yr
11. Colorado
12. New Mexico
13. Idaho
14. Michigan
15. New York
16. Illinois
17. California
18. Wisconsin
19. Maine
20. Missouri
481
435
73
65
62
61
59
58
56
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Source: An Assessment of the Available Windy Land Area and Wind Energy Potential in the Contiguous United States, Pacific Northwest
Laboratory, August 1991. PNL-7789
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North Dakota Wind Farms
Existing
Proposed
WHY GROWTH IN WIND ENERGY?
• Renewable power
• Environmentally friendly
– A 1 megawatt turbine in a “good” wind area will:
• 2.6 million kilowatt-hours electricity per year
• Serve about 300 average households
• Eliminates 5 million pounds of greenhouse gasses(CO2)
– Equivalent of 16 carloads of coal
• Helps the local economy
– Property taxes
– Lease agreement revenue
– Employment
• It can be a very good economic investment
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Need for Lease Education
• No Standardized contracts
• Questions about leases
• Are wind companies taking advantage of land
owners?
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Landowner Options
• Lease your land to a wind
project
– Local project
– External developer
• Be a partner in a community
wind project
• Own a residential/farm size
turbine for your own power
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Wind Energy Leases and Easements
• Most common way that landowners are participating in wind
energy development
– No cash outlay
– Low financial risk
• Few standards: range from good to bad to ugly.
• Compensation varies widely based on:
– turbine size
– wind resource
– price of energy
– knowledge level of landowner
– and many other factors.
• Long term commitments – usually last 20 to 40 years.
• Best results when landowners make informed
decisions.
• Consult an attorney before signing.
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Wind Energy Agreements
• Never agree to confidentiality agreements
• Have your insurance agent review the
agreement
• Will any USDA land use restrictions be
violated (FSA mortgage, CRP etc.)?
– Consider clause requiring developer to
indemnify landowner for any lost government
payments or for imposition of any penalties
• Decommissioning Rules
13
14
15
RISKS
• Financial risk
• Legal risk
• Liability
Liability Issues
Contract should specify the project developer and any
company to which the contract may be assigned in the
future are responsible for any financial obligations you may
incur as a result of:
noise pollution
access roads
blade drop/throw
stray voltage
communications
TV and radio signals
water/air pollution
visual pollution
construction period
shadow flicker
electromagnetic fields
microwave towers
emergency radio signals
vandalism
ice shedding
fire
lightening strikes
radar stations
bird kill
17
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Much of the wind development has been
established using a “Divide and Conquer”
strategy
• Company representative contacts individual
landowner
• Drops off a contract
• Requires decision to sign within a short time frame
• Expects landowner to commit to a 20 to 50 year
agreement
• Contracts include a confidentiality agreement
The Correct Approach
• Landowners organize into a business entity
• Market their resource as a package
• Landowners are compensated with or
without a tower
• Hire an experienced attorney to work for the
group
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Before you sign
on the dotted line…
•
•
•
•
•
•
•
How much of my land will be tied up
and for how long?
How much will I be paid and how will
I receive payments?
Are the proposed payments adequate now and will they
be adequate in the future?
Have all the liability issues been considered?
How will a wind project impact my other land uses?
Have I considered all contract specifications?
Have I considered all of my other options and is this the
best one for me?
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North Dakota Laws
• Code of Conduct for Wind Energy Leases
• Wind Turbine Sales Tax Exemption, Income tax
Credits and Property Tax Credits
• Wind Rights Legislation
• Tower Siting Regulations
22
Grant Administration
• Collaborated with the North Dakota
Department of Commerce
– They helped with meeting locations at proposed
wind farm areas
• Had several meetings in conjunction with the
North Dakota Public Service Commission
– A commissioner was in attendance or called in a
several meetings
• Project team had planned on fewer larger
meetings with experts, but did more smaller
meetings with ourselves as presenters
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Number of meetings and
attendees
• 25 meetings at 20 locations
• 1023 attendees
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Wind Turbine Lease Education Meetings 2008-2011
North Dakota
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Make-up of attendees
• About 20% have signed a lease
• About 40% have been approached about a
wind turbine lease
• Majority were land owners
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Grant is ongoing
• Need for more educational meetings
• Will do an impact study
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Take Away Points
• Need for further wind turbine lease education
• Keep abreast of state and local laws and
regulations
• Need for ‘small wind’ analysis and education
• Need for community and cooperative wind
farm education
• Education needs to be current with the
dynamic issues of wind energy
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Thank you,
Any Questions?
Ron Haugen
Project Director
701-231-8103
ronald.haugen@ndsu.edu
Credits:
Lynn Hamilton, Michigan State University & Cal Poly
Dwight Aakre, NDSU Extension Service
Cole Gustafson, NDSU Agribusiness
Ron Beneda, NDSU Extension Service, Cavalier Co.
American Wind Energy Association
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