The main challenge any wind developer faces in the Panhandle of Texas is the current state of transmission lines in the area. There simply is no grid capacity for any large project. It will take years of development and construction to solve this challenge. A few years is long enough to prove that there are sufficient wind resources to make a viable and bankable project but it will take an unknown number of years to get the grid resources into the area.
Wind farms are traditionally planned after grid issues have been resolved. In such circumstances, land lease agreements usually include a payment (often around $2 per acre per year) during the relatively short development period.
The Mariah project is being developed while the grid issues are being resolved. This leaves tremendous uncertainty about how long the development period will last.
Scandia Wind Southwest is dealing with this uncertainty in a way that benefits both the developer and the land owners. Instead of offering the traditional payment during the development period, landowners are being offered a 10% share of Scandia Winds Exit fee when the projects are being sold/financed. The exit fee is shared between all the landowners in the individual project areas. If the project is successfully developed and sold, the landowners share in the exit fee will be worth an estimated 10 times the amount of the traditional payment. For example, in a traditional development period payment of $2 per year for 5 years, the landowner would receive payments totalling $10 per acre. It is estimated that 10% of the exit fee would produce 10 times that amount, or $100 per acre. While this is an estimate only, it is based on historical prices of similar fully developed projects.
The complete land lease agreement that covers the development period, the construction and operation periods, is equal in its basic text and structure for all landowners.
Information Billboard in Bovina
Scandia Wind Southwest April Meeting