Neighbours of giant wind project offered up to $100m in unique deal that could shape design

The developer of a proposed wind farm in a state forest in New South Wales – that would be one of the biggest in the country – is making an unique offer to near neighbours that could involve total payments of up to $100 million over 35 years and help shape the design and location of the turbines.

The Pines wind farm will be located south of Oberon, in the central west of NSW, and will involve up to 250 large turbines, and a potential capacity of around 2 gigawatts or more, depending on the final layout.

Most, and perhaps even all, of the turbines will be located within the state government owned Gurnang, Mt David and Vulcan pine forests. 

But where many of these turbines are finally sited will depend on negotiations with local residents. The around 200 properties located within 3.5 kilometres are being offered a scaled fee of between $1,000 and $5,000 a year per turbine, depending on its proximity, and will have the opportunity to choose what they prefer.

The Pines is one of four projects given permits by the NSW Forestry Commission last year to try and develop projects for large wind farms within its forests. The others are being developed by Neoen, Iberdrola and Mainstream Renewables.

The offer of equity or payments to near neighbours of projects is not new to the Australian wind industry, although it is becoming more prevalent, particularly as the industry deals with the growing issue of social licence in NSW and around the country.

Stromlo Energy, which is working with TagEnergy, the principal developer of The Pines, says that what is innovative about this approach is the offer of negotiating payments with near neighbours at the start of the consultation and design process, rather than the end.

Stromlo director Mathew Parton says the payment sizes are similar to those offered to neighbours of the recently approved Thunderbolt wind project in New England, which he worked on while with Neoen.

The Pines will offer payments of $5,000 a year for each turbine within 1 km to 2 kms of a residence, $3,000 within 2.5 kilometres, $2,000 within 3kms and $1,000 within 3.5 kms. Because that money is being offered at the start of the process, it allows neighbours to make their own choices about proximity and payments.

Parton says the initiative is being made because it’s equitable. “The project team wanted to give project neighbours the opportunity to share in the benefits and the shape of the project,” he told RenewEconomy.

Some near neighbours may even choose to host turbines, which would result in significantly higher payments and help “drought proof” their properties. But he says it will be their decision.

Stromlo estimates that the average payment to the almost 200 neighbours will be about $14,000 a year, or around $500,000 over the 35-year life of the project. Some will receive significantly more.

Parton says Stromlo has used a similar model for the Devlins Bridge project, in the south-west of the state, but that involved just three neighbours, so the scale was nowhere near the same at The Pines.

He also worked on the development of the Coonooer Bridge wind project in Victoria more than a decade ago while at Windlab, where near neighbours were offered free equity in the project. So the concept is not new, but it is being refined and expanded.

Parton also notes that eligible neighbours can participate in the Nearby Neighbour program with no requirement to sign a non-disclosure agreement, and with no confidentiality obligations placed on them.

He says they will also be protected if they cause accidental damage to the wind farm from their property, with any such damage covered under the wind farm’s insurances.

“We’re grateful for the many community members who have already committed to the Nearby Neighbour Program, and look forward to welcoming more eligible participants,” Parton said in a statement.

The project also offers an Electricity Bill Credit Initiative – involving a $100 annual credit to electricity bills for every household in the Oberon local government area, as well as a community development plan and voluntary local government payments.