Landowners’ returns from large scale wind farms have been increasing since their inception in Scotland, according to a recent report compiled by CKD Galbraith’s dedicated renewable energy department.

Advisory and consultancy work has seen CKD Galbraith acting on behalf of landowners, developers, community groups and statutory national bodies on over 850MW of wind farms, with over 100 different assignments being completed in the last ten years.

The report found that between 2002 and 2008, rents under new leases increased on average by 200%. In addition, from 2009 to 2010, rents rose by more than 10% and early indications in 2011 show that they are continuing to rise as demand for available sites increases.

Landlords of pioneering wind farm sites throughout Scotland will soon be undertaking rent reviews on the earliest leases and evidence suggests that landowners can expect significantly higher rental returns for their projects from review dates.

CKD Galbraith’s research also shows that Option Agreement payments for wind farms can vary by thousands of pounds. Often initial terms proposed by a developer do not reflect up to date figures so it is more important than ever to seek advice to secure optimum payments.

Scotland currently has 110 operational wind farms, the largest proportion of which are in Aberdeenshire and Highlands and Islands and with arguably the ‘best’ sites already developed, a trend is emerging to suggest that the average size and number of turbines per new site is decreasing.

Currently the Scottish Borders, Ayrshire and Perth and Kinross have the highest average MW output per county although Renfrewshire has the most, this is skewed by the 322MW Whitelee Wind Farm, which is soon to extend into an even larger site, with a further 75 turbines.

In Scotland CKD Galbraith have already seen existing sites extended to add more turbines to individual locations which can be more acceptable to the public than developing new, green field sites.

‘With the introduction of the Feed in Tariff (FiT), medium-scale (250kW-1MW) wind developments are becoming more prevalent, meaning more electricity can be produced from fewer turbines. Wind power to smaller producers, not just the international developers who dominated this market just a few years ago,’ said Mike Reid, head of CKD Galbraith’s utilities department.

‘If property owners are considering any renewable projects, it is important to ensure that time scales for planning and grid connection are accounted for, since these can cause delays. Also, time is of the essence since FiT rates are due for review from 2013 and the viability of a project may well be affected should payments reduce.

He warned that the Government has already announced its intention to refocus on the most cost effective technologies with a view to cutting the FiT budget by £40 million, or 10%, in 2014 and 2015. And the recently announced Comprehensive Spending Review could have a detrimental impact on funding for FiTs as it tried to introduce a balance between the various energy options.

As well as likely reductions in FiTs, The industry is braced for a longer turn-around for planning applications due to cuts in Government spending combined with an influx of renewable planning applications in certain counties, particularly Aberdeenshire and Lanarkshire. Delays can have a detrimental impact on a project, especially if the local grid capacity is already near its limit.