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Wind farms – what you should know Wind farms – what you should know

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Nov 16

Wind farms – what you should know

Written by Jonathan Mortimer
Consultant Partner

DDI: 01423 726608
M: 07850 993952
E: jonathan.mortimer@raworths.co.uk

Wind farms are like marmite. You either love them or hate them. Some see the turbines as giant majestic creatures whilst others see them as visually and audibly objectionable, to say the least!

For landowner’s, wind farms provide a financial advantage and its alternate energy source mean they now feature heavily across the UK. You might presume the most difficult part of a wind farm is the initial set-up, securing planning permission, sourcing the infrastructure and supply agreements.  Once this is sorted, the green incentives mean the money rolls in.

However, there are complications to be wary of and which need careful management:-

Maintenance and service agreement disputes

Ordinarily, the landowner will agree to a form of exclusive maintenance and service, possibly for an annual fee.  Always carefully consider what work is and isn’t covered by scheduled maintenance.

Service company failures

Difficulties often happen when maintenance companies fail to provide the service.  We have dealt with a problem for a wind farmer in West Yorkshire who had been without blades for many weeks caused by a serious service failure.

Claims on guarantees from original manufacturers

The maintenance agreements ordinarily cover running and in-service issues.  A more serious defect with the equipment will question the guarantee (usually issued at purchase).

Co-operation between contractors

Farms frequently have separate contractors responsible for infrastructure (power cables and foundation bases) but who is responsible for what is often an issue.

Renewal of agreements

With wind turbines having an operational life of around 20 years, most agreements relating to the wind farms will expire well before the equipment.

Application of business disruption or other insurance policy

Many wind farmers have insurance policies but it can be difficult to persuade the insurance company to pay in the event of a problem.

New technology

Technology is rapidly advancing.  Considering the lifespan of the equipment, the electronics are likely to be upgraded or even replaced leading to operational problems.

The wind turbines produce less power than anticipated

This could be caused by operational problems or even amount to a possible miss-selling claim.

Termination of key agreements

If after-sales support leaves you dissatisfied, it can be tempting to terminate an agreement.  Walking away can leave the wind farmer exposed to a claim for loss of profit.

A supplier becomes insolvent

The industry has a surprisingly high level of business failures which can leave you high and dry on the continuing support you need.

 

Careful management of contracts throughout the life of the wind farm will help secure income stream and ensure benefits to the community are maintained.

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