Repowering of wind farm sites is a topic which is moving up the UK energy agenda. The onshore renewables pipeline has reduced in recent years, but it should not be forgotten that some of the existing onshore wind fleet will soon start reaching the end of its life. While planning policy in England has moved against onshore wind, repowering is specifically addressed in the National Planning Policy Framework as an exception and Scotland and Wales are seeing definite signs of activity. It is tempting to think that existing onshore wind sites would be relatively easy to repower, but that is not necessarily the case. Burges Salmon has experience of advising on some of the UK’s first repowering of onshore wind projects and is aware of the issues that these projects throw up.
So, here is our non-exhaustive checklist of issues to consider.
Almost certainly a new agreement with the landowner will need to be put in place. Even if the existing arrangements allow for extensions and repowering, the reality is that the layout of the site and/or any ancillary matters relating to the project, such as battery storage, are likely to require new landowner consents and this should not be taken for granted. We know in the new subsidy-free world that all parties involved in these types of projects need to be realistic about the financial model. Developers may, justifiably, be expecting landowners to be realistic in rental demands, but in finding the new equilibrium, landowners may want to test the market.
As part of the repowering, consideration will need to be given to dove-tailing the landowner rentals and obligations under the old property documents with those applicable to the new proposed project e.g. decommissioning and access arrangements for the repower. There is a balance, therefore, between making sure that some of the obligations and restrictions for the existing wind farm developer and landowner stay alive while decommissioning takes place, balanced against required flexibility to obtain all necessary rights for the new wind farm on the other.
Consideration also needs to be given to whether the same project vehicle for the 'existing' project can be used for the 'new'. Key to that will be the view of equity and debt in equal measure. Whilst it is likely that the original debt will have exited by the time that a re-power is considered, there may well have been a refinance of an operational wind farm along the way. Furthermore, there may also have been a change in equity participants during the lifecycle of the project. Consideration will need to be given as to whether debt and equity only have appetite for an operational wind farm or whether they would countenance the element of development risk posed by a re-power.
Clearly dependent on which part of the UK the project is based, planning may or may not be as simple as it once was.
Most repowering projects need to be treated, from a planning perspective, as completely new projects on greenfield sites. Any repowering is likely to require full planning permission and will almost certainly require a renewed environmental impact assessment, although the scope of that assessment may be able to be restricted based on some of the reported and documented effects of turbines from the old project. It will be important to have regard to any changes in the baseline (other projects and/or designations) and up to date guidance which may be more restrictive than at the time the original consent was granted.
Repowered turbines will be larger with, potentially, a greater landscape and visual impact to consider (although accepting they may be less in number). As ever, in planning, compliance with policy, local support and the community reaction to the wind farm project will be key. Depending on where the project is located, community or local ownership may also be an important consideration. .
Decommissioning the old project
Before the repowered project can be constructed, it is likely that the old turbines from the existing project need to be decommissioned and there will need to be compliance with the provisions in the lease and planning permission. Depending on whether the developers are different, this may lead to conflict issues and intransigence in terms of cooperation. It should also be borne in mind that the contractual requirements for the new project may mean that the decommissioning requirements will need to be adapted.
Other things to think about in relation to decommissioning will be how much of the existing infrastructure can be used, such as the cabling and tracks, compliance with the relevant legislation, in terms of decommissioning requirements and traffic noise impact as a result of both the decommissioning of an old project and the constructing of a new one.
It is very likely that new grid connection arrangements will be required. Any new project will also, undoubtedly, be considering ancillary services and the installation of, for example, other forms of technology, such as battery storage. So, an assessment of the grid, its impacts, its capacity and suitability will need to be made.
Construction and Operation & Management (O&M)
The redevelopment of the site will necessitate the negotiation of consultancy agreements and works contracts to procure the works and services required to repower the site on terms which satisfy all stakeholders, including landowners and potential funders.
Site and other investigations will need to be procured to assess which assets are suitable for incorporation into the revised scheme and to aid in the design of the new scheme. Again, if the existing developer is wishing to take forward a repowering prior to the end of the term of the contracts for the existing wind farm, arrangements, such as operations and maintenance etc, will need to be reviewed and terminated or amended, to ensure that the repowered site is subject to an appropriate regime.
In the subsidy free world of onshore wind there has been a lot of focus on the route-to-market for the power generated by these projects. Corporate Power Purchase Agreements (PPAs) can be very useful, but their availability is limited in that there are only a certain number of power intensive corporates who are willing to take the power. Corporate PPAs may provide a useful fixed price for the power and possibly even a marginally inflated price compared to the market price, but they will not provide the returns that historic ROC projects would have enjoyed. This places great focus on devising innovative power trading strategies and even a re-examination of potential private wire arrangements.