Insights / May 5th, 2022

What to do when the Energy Developer comes knocking?

While renewable energy developments can create financial opportunities for farmers, the issues involved are complex and far-reaching.  This insights discusses some of the issues that should be considered.

As environmental awareness becomes mainstream, so does Australia’s demand for clean, renewable energy.

With every State and Territory in Australia committing to net zero emissions by no later than 2050 (some much earlier), mass consumption of clean energy is no longer a matter of if, but when.

We are seeing now more than ever energy developers and investors moving quickly to capture significant opportunities available in the renewable generation industry.

But to do this, energy developers need access to land. 

Australia’s vast farming land creates the perfect opportunity for energy developers to establish renewable energy projects, especially wind, solar and battery storage.   This has resulted in energy developers approaching farmers and their advisers at a very rapid rate in recent times, seeking to secure binding agreements over farming land to conduct energy developments.

With legal agreements spanning decades there is a lot to think about.

Will the farmer be able to continue with ‘business as usual’?  Are there Aboriginal heritage and native title issues to be considered?  If so how will these interests impact on the energy development  What should the term of the lease be?  What happens if the projects stall as different technologies emerge, or worse still, if the development does not proceed at all?

What happens to the energy assets when they are eventually decommissioned? 

And what are the terms of payment? What return should the farmer get? 

Furthermore, in our experience, formal legal agreements are often prepared by the energy developers and often on terms very favourable to the energy developer, leaving farmers potentially exposed to risks they might not have expected.  Significant pressure is often exerted on farmers to sign documents at very short notice.

Agreements therefore require very careful consideration before signing, but without expert help, it can be overwhelming.

Cowell Clarke’s Agribusiness team has substantial experience advising farmers on these agreements and negotiating on their behalf to achieve optimal outcomes.  

If you are approached by an energy developer we can help you understand the issues and protect your interests.  Feel free to call Sam Richardson on 08 8228 1240 or email at SRichardson@cowellclarke.com.au.  

This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice.  You should not act upon the information contained in this publication without obtaining specific professional legal advice.  No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.