Below, Red-Cap Energy answers some of the most common questions from landowners about the financial implications of wind energy development.
What financial benefit can I expect if I lease my land for wind energy development?
Leasing your land can provide a guaranteed stable income stream for the lifespan of the project, which may be 25 years or more.
Payments are usually structured as an annual rental income that is usually paid on a quarterly basis, based on the number of turbines and additional infrastructure, such as substations, that are placed on your land.
This presents an opportunity to diversify your revenue with a second guaranteed income.
Are there any upfront costs or financial risks for me?
No, there are no upfront costs or financial risks during the wind farm’s development, operational, or decommissioning phases. All development and maintenance costs are covered by the wind energy developer.
Property taxes might increase due to the rezoning of your land for energy purposes. The developer will cover the difference, so this won’t impact you financially.
Will the presence of wind turbines on my land affect my ability to farm?
Wind turbines only take up a very small percentage of your land, so most of it remains available for farming activities like crop production and grazing.
You can continue your regular operations while benefitting from rental income.
How do I choose the right developer to partner with?
You’ll be partnering with a wind farm developer for the long term, so choose wisely. Assess their track record of project completion and look at whether their wind farm assets are operational, as your rental income depends on the wind farm being operational.
Compare the financial terms on offer, but also assess the developer’s experience and skills. While the terms on paper may look good, if the project is never completed, the benefits won’t materialise.
A developer with a strong track record is better able to navigate regulatory, environmental, and financial challenges, ensuring the project is successfully developed and operational.
How do wind energy developers identify suitable sites for wind farms?
Wind energy developments have rapidly become a common sight across South Africa. If you’ve been wondering whether your own land might be suitable for development, and what the process involves, read on to find out more.
What do wind energy developers look for in land?
Developers consider three key factors when assessing potential development sites: access to a power grid that has capacity; sufficient available land for development; and a good wind resource.
The Eastern, Western and Northern Cape currently don’t have network capacity to integrate new renewable energy projects into the grid.
Be aware that wind energy developments require environmental authorisation, and this is easier to obtain in areas that have historically been disturbed, compared with more pristine natural areas.
How much land do wind energy developers need?
The average wind turbine requires approximately 0,5ha of land for the turbine itself. The total land required is based on the number of turbines erected, including space for additional infrastructure like substations and roads, as needed.
The development footprint of a wind farm takes up only a small percentage of the total land signed up for it. Agricultural activities can therefore easily continue alongside an operational wind farm.
What does the process involve?
Developing a wind farm is a lengthy process that can take around seven years to complete. First, developers identify suitable sites and begin negotiating with landowners, a step that can take up to two years to finalise.
Construction can’t begin until all the necessary permits have been received, such as environmental authorisation, a water-use licence, and rezoning, among others. Frequently, this phase takes about three years to complete.
Finally, once all the permits have been secured, construction can begin, and this can take up to two years. The typical wind farm operates for 20 years under agreements like the Renewable Energy Independent Power Producer Procurement Programme, bringing clean energy to the national grid.
How is the site access controlled to ensure security during development?
Access to the proposed wind farm site is limited to specialists and a wind mast contractor. In line with Red Cap’s site access protocol, landowners are always informed of planned visits well in advance to minimise disruptions to daily operations. The required information about who will be visiting, their reason for visiting, vehicle description, contact details and licence plate number are shared in advance.
How is the site access controlled to ensure security during the operational phase?
Once the wind farm is operational, only wind farm staff are authorised to access the wind farm and servitude areas. If someone else is required on site, an induction will be carried out to ensure they’re fully briefed with the required knowledge to access the site. In addition, 24/7 security will be present to monitor the wind farm and prevent unauthorised access. A rotational security shift setup means no personnel is allowed to permanently reside on the wind farm.
What happens if there is a security breach?
Red Cap takes every available measure to manage security risks, installing biometrics, motion sensors, and an extensive security camera system. In the event of an emergency or any issue as a result of its development, Red Cap makes provision to compensate landowners fairly for any loss.
Not all wind farm developers approach security in the same way. A developer with a strong track record is better able to navigate safety challenges and ensure that you, your family, and your staff remain safe.
Answers provided by Eugene Marais, lead land rights manager, and Surina Laurie, lead project manager at Red Cap Energy. If you have any questions, email [email protected] or visit red-cap.co.za.
