James Walker provided some great advice and ideas to farmers on how to prepare for negotiating with developers for hosting commercial renewable energy projects.
The Walker family own and manage Camden Park Station, an 800Ha grazing property to the east of Longreach in Central Western Queensland. The farm has diversified into tourism with farm tours, a campsite, the famous Outback Yacht Club and the Longreach Solar Farm.
The 15MW Longreach Solar Farm was commissioned in March 2018. It consists of 54,000 x 320W solar panels on a single-axis tracking system. It generates around 39.16GWh of electricity per year, which is enough to power around 5,000 homes.
For details of the project, see the Australian Renewable Energy Agency (ARENA) website HERE.
James talked about how the project was developed and gave plenty of advice about how making early preparations will help result in a good outcome for the farmer, developer and the local community.
Below is a short summary. Watch the video to see the full discussion here.
James approached the developer, Canadian Solar to develop the solar farm as he thought the site was appealing with good solar access and very close to power lines and the highway. The agreements went through three phases: a letter of offer, an option, then a lease agreement. An annual fee was payable.
A different company now owns the project. James mentioned that it’s common that projects change hands throughout their life, so the landowner may end up dealing with a number of companies during the long project life. James highlighted the importance of agreeing to everything in writing for that reason!
Camden Park station can operate as required with no requirement to consult.
Value for the Farm and Local Business.
James was keen to ensure that there was local benefit and prepared a prospectus for all the trades, suppliers, and accommodation providers in Longreach to introduce them to Canadian Solar and the contractors that built the solar farm. The developers were therefore able to use local steel companies, civil contractors, and other businesses where they may have otherwise brought in more skills and materials from outside the area.
James also provided a Capability Statement to Canadian Solar to set out what else they could contribute to the project such as water, rock clearing, fencing and stakeholder discussions. James, therefore, had first right of refusal on a lot of sub-projects with the project.
What was James able to negotiate as part of the project?
- Lease Payments
- An all-weather road, not just to the site, but up to the farm compound as well
- Fencing, including security fencing to stop solar farm traffic from going up to the farmhouse.
- First right of refusal on mowing and grass clearing for the project
- Provided some solar and batteries for the homestead
- Offered the opportunity to invest in the project
- Offered the opportunity to do security which they declined
- No chemical use on their project to retain the farm’s organic status.
Since the solar farm started operating, James has signed a Memorandum of Understanding to enable grazing sheep amongst the solar panels. James and the solar Farm have developed an Operations Plan for grazing so they and the solar farm owner have a joint agreement on managing the site with sheep.
Key points that James raised:
- You have to work fast with these companies as “they operate at the rate of commerce!” It was impressive to see how quickly the project was actioned.
- The more preparation you have done, the better – have a blueprint for what you would like to happen with your farm over time, you may be able to bring some of these projects forward by negotiating with the developer.
- You have more control and negotiating power at the time the option agreement is being negotiated, so have a prospectus available as early as possible.
- You should do the financial modeling on the future value of the farmland to compare to what you might earn if you continued farming, so you can evaluate the potential renewable energy lease income.
- They have now prepared a net present value of the lease payment to determine that they have an additional asset in that they could sell the Lease or the rights to the income.
If he had his time again, James said they would have liked to see local residents near the project given the opportunity to invest.
Watch the video to see the full discussion. It’s available on the Queensland Farmers’ Federation YouTube channel at www.youtube.com/watch?v=nMc8Xl6o0b4 which includes the index to the conversation so you can go straight to the section you are interested in.
The Queensland Farmers Federation in partnership with the Department of Energy and Public Works is preparing a landholder toolkit and guide to upskill and assist landholders as they respond to and negotiate with energy industry representatives about accessing land for renewable energy projects. Read here for more details.
(Banner Photo Credit: James Walker. Longreach Solar Farm under construction.)