Vol. 31, No. 1, #8. Wind Energy Leases: What the Developer Wants.

• Author: Author: Mark D. Safty, Davina C. Maes, and Teresa Buffington

Wyoming Bar Journal

2008.

Vol. 31, No. 1, #8.

Wind Energy Leases: What the Developer Wants

Wyoming Bar Journal Issue: February, 2008 Author: Mark D. Safty, Davina C. Maes, and Teresa Buffington Wind Energy Leases: What the Developer Wants

Development of renewable and clean energy projects is growing at a remarkable rate across the United States and especially in the West. Wyoming, a state with considerable wind resources, has been a particular focus for wind energy development. There are several legal instruments through which a developer can acquire access to a landowner's land and wind resources. A wind energy lease is one of them; it creates a landlord and tenant relationship and transfers to the tenant the right, for a period of time, to develop energy generation and transmission facilities on real property in exchange for consideration. This article provides a general overview of wind energy leases and summarizes some of the issues that are important to developers when negotiating them. The lease is a legally binding agreement that will govern the landlord and tenant relationship over the life of the wind project.

Land Subject to the Lease

It is important to the developer to acquire rights to enough adjacent land to ensure that the project site has significant average wind speeds, close proximity to available transmission lines and adequate access roads. The lease will grant the developer the right to install wind turbines and infrastructure anywhere on the landlord's property. In the event a different landowner owns the land where the roads or cables cross, the developer will need to secure the right to cross over neighboring properties to access the wind turbines or to run electric transmission lines to transport the electricity from the wind power facilities to the electric grid.

Grant of Property Rights

Developers are always concerned with any uses of the land that would interfere with the free, unobstructed and natural wind flow and speed over and across the property, because such interferences can reduce the energy production from the turbines. To deal with this concern, the developer will include a non-interference covenant in the lease that restricts the landlord from interfering with the flow and speed of the wind across the property. The developer will also obtain similar agreements from neighboring...