Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki, emphasized during the Power Field conference that land lease agreements for renewable energy sources, regardless of whether they are photovoltaics or wind farms, are concluded for many years. Properly prepared, properly protecting the farmer's interest, they can be a source of large and, more importantly, stable profits and secure the profitability of agricultural production.
It is worth knowing first of all who you are talking to and with which company you are signing the contract for leasing land for renewable energy. Let's find out more about the company that presents us with the contract. Is it an experienced company, are they competent people, has it already implemented some renewable energy project, because these factors, apart from the lease agreement itself, are the greatest guarantee of success for the farmer – emphasized Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki.
read more
What is the fertilizing value of cereal and rapeseed straw?
The most important thing is the amount of rent in the contract. How to determine it so that it is most beneficial?
Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki, also defined the most important things to pay attention to before signing a contract for the lease of land for renewable energy.
What is most important in such an agreement from the farmer's point of view? Of course, rent is the basis and is the most important thing, but it is not the only thing. The mechanism for determining the rent amount is also important. The amount of rent may be a nominal amount, paid regularly depending on the area of the farm. However, apart from determining the rent amount in the form of a nominal amount, we can also choose an alternative option. The amount of the lease fee can be dynamically determined as a percentage of the revenue generated by the operating photovoltaic or wind farm. I encourage you to choose the second option, because it guarantees a more stable income in the long term – emphasized Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki. – Secondly, if we choose the nominal value of the lease rent, the contract must precisely specify the principles on which it is indexed. In the face of rising inflation, the agreed nominal rent amount may seem very high today, but in a few years it may be inadequate to market conditions. It is worth including in the contract the principles of indexation based on rising inflation, or perhaps it is better to let this indexation be based on the index of changes in rising electricity prices. This is the most important part of the contract, added the expert.
read more
Approval of a wind farm investment should take one year, not several years
The location of a wind and photovoltaic farm has an impact on agricultural production
It is worth ensuring that the contract includes provisions giving the farmer some (but not decisive) influence on the arrangement of individual elements of the wind farm or photovoltaics. It is the lessee, after completing all procedures, who will choose the optimal location for wind turbines and photovoltaic panels.
The point is not to voluntarily cut up your farmland as a result of such a renewable energy investment. There cannot be any fragments of land that cannot be cultivated due to difficult access due to the construction of the wind farm. I emphasize once again that the farmer will not and will never have a decisive influence on the exact location of individual elements of the wind farms in the contract. However, it is important that the lease agreement gives the farmer the opportunity to take an active part in determining where these individual turbines can be located at each stage of the implementation of the renewable energy investment – emphasized Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki.
Certainly, the contract for the lease of land for a renewable energy farm, especially a wind farm, will include provisions prohibiting the construction of farm buildings in close proximity to wind turbines.
The farmer should therefore think in advance whether he wants to build a farm building, a warehouse or a silo in the area of wind turbines. If so, the contract should include precise provisions at what distance from the turbines we can carry out such projects, otherwise we can expect construction to be blocked for many years – emphasized Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki.
What will happen to the photovoltaic or wind installation on agricultural land after the lease agreement expires?
It is worth including provisions clearly defining the lessee's obligations related to the removal of remnants of renewable energy installations, and even restoring the land to a specific level of usability. So that we are not left alone with this problem. Contracts should normally contain such provisions.
read more
Power Field: energy production cannot displace food production
What about additional public and legal fees related to the implementation of renewable energy investments?
In addition to the lease rent, there are important provisions specifying who is responsible for the fees for land de-agriculture, real estate tax, improvement fees, etc.
There are many different public law levies identified in the legal system and they are usually borne by the tenant. However, the farmer should bear in mind that additional fees may arise over the 20-30 years of the contract. Therefore, it is worth including provisions that all public and legal fees (including those that will be additionally imposed during the lease agreement) will be fully borne by the tenant – emphasized Małgorzata Malinowska-Mizera, vice-president of the management board, Młyny Szczepanki.
read more
Power Fields, or what is the plan for farmers for cheap energy and low-emission food?