Renewable energy is booming in Australia. Data recently released by the Clean Energy Regulator suggests 6.3 gigawatts of total renewable energy capacity is expected to be delivered in 2020 – roughly equivalent in capacity to four large coal plants.
Wind farms and solar farms are usually located on cleared primary production land. In addition to wind turbines or solar arrays, developers also require certain area of land for access roads, transmission line easements and electrical substations.
If a landowner is approached by a developer, the landowner will be provided with an Initial Licence Agreement (optional) and an Option Deed during the early stages of development, leading to an eventual Lease Agreement and/or Contract for Sale of Land once the development is approved by the authority and the option is exercised by the developer.
1. Initial Licence Agreement is a simple agreement allowing the developer site access to conduct preliminary investigations and feasibility studies. Depending on the project’s needs, not all developers sign this document with landowners.
2. Option Deed gives the developer an option to lease and/or purchase part or whole of the land from the landowner for construction and operation of the project. During the option period the landowner is paid an option fee.
3. After the project is approved and before construction commences, the option will normally be exercised and the developer will enter into a Lease Agreement with the landowner.
4. Where necessary, the developer may also exercise its option to purchase part of the land for construction of a substation, in which case the developer will enter into a Contract for Sale of Land with the landowner.
The above documents are complex and lengthy. Further, developers will usually negotiate the Option Deed and other documents at the same time before entering into the Option Deed, with the Lease Agreement and Contract for Sale of Land as attachments to the Option Deed.
Everingham Solomons have experienced Solicitors who have represented landowners in wind/solar farm projects. Please do not hesitate to contact us for any legal advice you may need in relation to a renewable energy project, because Helping You is Our Business.
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