Green power a windfall for farmers
Turbines could generate revenue, but landowners warned of pitfalls
Alberta farmers who historically have profited from having oil and gas wells on their land have a new opportunity blowing in the wind, though experts advise landowners seek legal counsel before signing contracts.
The province’s planned move toward 30 per cent renewable electricity by 2030 has made Alberta the most attractive jurisdiction in the country for new renewable energy investment. Last Friday, the Alberta Electric System Operator issued a call for expressions of interest for companies capable of providing 400 MW of new solar or wind power capacity — the first in what is expected to be several competitive auctions as the province works toward its target of adding 5,000 MW of renewables to the grid over the next decade or so.
Alberta’s green power shift represents a huge opportunity for renewable energy companies, but also for the province’s farmers, since all those wind turbines and solar panels will have to go somewhere.
Evan Wilson, Prairies regional director for the Canadian Wind Energy Association (CanWEA), said there is “certainly the opportunity to make some money for landowners” as developers seek sites for the development and construction of renewable power projects.
“I have gotten calls to my desk here from landowners asking me who they should talk to if they want wind turbines on their land. So there are definitely people seeing these things going up who are thinking there’s a real upside to this,” Wilson said.
Though renewable energy companies do not make details of their lease negotiations public, CanWEA says that every 150 MW of new wind power capacity in Alberta represents $17 million in lease payments to landowners over a 20-year period, as well as $31 million in property tax payments to municipalities. In the U.S., it’s estimated wind farms pay $222 million a year to farming families and other rural landowners, according to the American Wind Energy Association.
Graham Hager, whose farm northeast of Provost is home to four wind turbines that make up part of BluEarth Renewables’ 29MW Bull Creek Wind Facility, said he also has oil and gas wells on his property but that the lease payments from the wind power company are “much better.” He said the contract is structured so that he receives a flat base rate plus a royalty portion that fluctuates based on how much the wind is blowing and how much electricity the turbines are generating.
“Some quarters are a bit better, but we’ve been really happy with it overall,” Hager said. “Farming is such a gamble — you put all your faith in Mother Nature and some years you don’t make any money. So to have some guaranteed income is pretty nice.”
But while green electricity represents an opportunity for landowners, negotiating a lease with a renewable energy company is not the same as negotiating with the oil and gas industry. Currently, there is no right of entry or expropriation process for renewable energy in Alberta, so farmers approached by a wind or solar company have the right to say no. However, if they do accept, the Surface Rights Act — which provides certain protections for landowners involved in a lease arrangement with an oil and gas company — doesn’t apply.
“We’re just hoping people gather all the information before they sign a lease and make an informed decision about what they choose to do with their land,” said Jeana Schuurman, rural engagement and communications specialist with the Farmers’ Advocate Office, which is holding a series of information sessions across the province to assist landowners who have been approached by a renewable energy developer.
Schuurman added that unlike with oil and gas, landowners involved in solar and wind project leases cannot appeal to the Surface Rights Board if the developer were to run into financial difficulties and stop paying its land lease rentals. (Landowners can, however, appeal to the courts, but would be considered an unsecured creditor — making recovery of funds less likely).
There is also currently no industry or government-funded “orphan” program that would remove the wind turbines or solar panels in the event a company becomes insolvent.
“We really do encourage people to get legal advice on any contract that’s proposed to them before signing,” Schuurman said.
While many farmers embrace the idea of renewable energy and the extra revenue it may bring, not all do. Concerns about noise, obstructed views, traffic during the construction phase and other potential effects can become sore points between neighbours — especially if not all of the landowners in the area will financially benefit from the project.
“We still have neighbours that are not happy with us about allowing them to go through,” Hager said of the wind turbines on his land, adding he has been told by some area residents that the giant turning blades are an eyesore. “But nobody ever said anything about the oil wells — nobody ever opposes
Nobody ever said anything about the oil wells — nobody ever opposes them, and they stink. These (turbines) do change the view, but I think they look cool.
them, and they stink. These do change the view, but I think they look cool.”
While developers must conduct a public consultation program to get Alberta Utilities Commission approval for their projects, the Farmers’ Advocate Office recommends landowners considering signing a wind or solar lease discuss the opportunity with their neighbours early on.