Have you been contacted by an energy developer looking to build a renewable energy project on your farm but are unsure if what you are being presented is a good offer?
We are currently seeing an enormous increase in renewable energy development across the country. One of the critical components of renewable energy development is an agreement to access land for the purpose of developing a renewable energy project. In exchange for access to land, a developer will generally commit to paying a fee and may also promise other investments that provide a landowner with a benefit, such as the development of roads to enable better access to different parts of the land.
Two immediate concerns we consistently hear from landowners are:
- They're unsure how to assess an offer from a renewable energy developer and whether it actually presents a 'good deal' to their business. For instance, a 'good deal' might involve a fair compensation package, long-term benefits, and minimal disruption to farming operations, while a 'bad deal' could be one where they promise too much, don't appropriately share profit or the deal significantly disrupts farming operations.
- They don't necessarily understand the risks associated with the agreement and the potential impact to their farming operations. These risks can include changes in land use, potential environmental impacts, and the financial stability of the developer.
FTI Consulting Can Help
We believe it's crucial that landowners arm themselves with the same standard of commercial advice that renewable energy developers are accessing so they can make an informed decision in their best interest.
Our experts advise renewable energy developers and governments on the merits of their renewable energy projects. We look at the revenue strategy for new projects, including forecasting the expected revenue that may be achieved, to advise on the long-term commercial viability of the project. Our team also helps energy businesses understand their suppliers, their suppliers' ability to deliver what they promise and the risks they bear. These considerations apply to any landowner looking to enter into an agreement with a renewable energy developer.
We can also assist farmers in understanding the likely impact that any renewable energy project might have on their ability to operate their farms efficiently. Many of these projects impact how a farmer will be able to manage their enterprise. Our expert team can calculate the cost of this impact and what reasonable compensation might be expected as a result. We can also assist in building the business case to inform where renewable energy infrastructure should be placed on the farm to optimise operations and protect farm value in the long term.
So, How Does This Help You?
It's simple. We know what good looks like and can help you mitigate the risks and negotiate the best deal customised to your operations.
You should feel as though you have some agency in negotiating with renewable energy developers and receive a fair share of the benefits of new renewable projects. Allowing a renewable energy project on your land is a big decision that will impact you for many years. We want to help you by providing the information you need to feel comfortable making a decision.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.