The Real Estate Aspects of Offshore Wind Farms

As part of its Climate Action Plan 2019, the Irish government set a goal of achieving 3.5 gigawatt of offshore wind by 2030. This objective was increased to 5 gigawatts in its Programme for Government agreed in 2020. There are a number of offshore wind projects in the pipeline but more is needed to achieve Ireland’s objective of achieving 80% renewable energy by 2030. In this article, we will discuss the land rights and agreements which are required to facilitate offshore wind farms.

Turbine sites

For onshore wind farms, developers typically enter into option for lease agreements with a number of landowners which will allow them to call for leases of lands on which the turbines will be located. However, when it comes to offshore wind farms, the Irish State is presumed to be the owner of the foreshore unless alternative title is provided. The foreshore is classed as the land and seabed between the high water of ordinary or medium tides, shown as “HWM” on Ordnance Survey maps, and the 12 nautical mile (22.24 kilometre) limit. Instead of seeking to agree the usual lease or an option for lease with the State, traditionally an offshore wind farm developer would apply to the Department of Housing, Local Government and Heritage (the Department) for a foreshore licence or foreshore lease.

Legislation is being introduced to replace the existing foreshore lease/licence position with a Maritime Area Consent (MAC). The MAC process will align closely with the planning process and our colleagues in our planning department have given their thoughts on the proposed new procedures in their articles here and here.

Other property rights

An offshore wind project will require the same “on land” cabling rights for the grid connection to an onshore electricity substation as an on-shore wind project does. However. offshore projects will also have additional land requirements for landing areas, ports and maintenance and operations buildings.

In December 2021, the government set out their policy for Ireland’s commercial ports to develop infrastructure to support offshore projects. Existing commercial ports will have access to funding for the development of infrastructure. This funding will cater to both large scale infrastructure projects and smaller scale facilities for ongoing operations and maintenance resources for the planned offshore developments. In many cases this will require developers to secure property rights from third parties. Given the nature of the lands along the coast, they can often be subject to issues like flood embankment works and CPOs. Issues such as these will need to be carefully considered when contracting land options for these lands.

Depending on where the cable can be landed, there may be a requirement to engage a large number and diverse type of landowners for the cable route including farmers, public bodies, state agencies. It is important to put in place documents with these landowners that grant all necessary rights required to bring an offshore development from planning stage to development without delay or challenge. It is key for a developer to build in enough optionality so that an issue at one stage of the development will not detrimentally affect the rights granted.

Where required by a connection agreement, it may be necessary to construct a new substation and as such it will be necessary to option lands for lease or purchase by Eirgrid/ESB. It is extremely important that an option like this and the related documents to be granted out of it are in a form acceptable to EirGrid where EirGrid will be taking over the asset. Ensuring that the documents are in an acceptable form will remove the risk of having to re-engage with a landowner where a landowner can effectively hold a project to ransom.

The ripple effect

The development of ports and infrastructure required to support the operation of offshore projects will have a significant knock-on benefit for the local economy. SSE Renewables announced a plan to create approximately 80 full-time jobs for the support of the operation of their planned Arklow Bank Wind Park Phase 2. The influx of jobs and investment will have a positive ripple effect on the local property market from agricultural land, housing, retail and offices.

Conclusion

While the introduction of the MAC process will be new for all parties, there continues to be a requirement to put into place the same agreements that would be required for an onshore wind farm. Given the scale of offshore projects, it is absolutely essential that the documents put into place cannot be challenged and that they provide enough flexibility to developers to allow them to plan and develop what are very complicated projects.

For expert guidance and advice on securing the necessary onshore rights for offshore projects, contact a member of our Energy or Real Estate teams.

The content of this article is provided for information purposes only and does not constitute legal or other advice.