GWO publishes the Standard Contract for the advancement of wind sector governance in Galicia

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The Galician Wind Observatory (GWO) and the participating respective Presidents of the Juana de Vega and Isla Couto Foundations, Enrique Sáez and Manuel Meixide, made the content of the Standard Contract (SC) public to Galician society. After years of observation, analysis and participation in numerous wind development processes throughout rural Galicia, the Galician Wind Observatory began drafting a Standard Contract last year to improve the contractual conditions for owners of agricultural land with wind aptitude. To this end, a Doctor in Law, with the support of an independent team of external lawyers, was hired. In the initial phases of the SC development, various rural landowner organizations were consulted; their contributions form part of the final proposal. The SC was also presented to the Galician Wind Energy Association, the group representing the promoters. After several months awaiting a response, their silence has been taken as an implicit acceptance of the SC. Last week, the SC was presented to the three political groups of the Parliament of Galicia. The impression of the members of the GWO after this meeting remains positive.

The main motivation of the Observatory in defining a standard contract is the verification of the existence of different proposals that, at times, excludes wind farm owners from advantageous positions. This happens within the context of a strong asymmetry between the parties. The promoters’ have vast market knowledge and information while little information and few resources are available to the owners. This also happens within a context of the likely use of land expropriation as a way to exert pressure. Finally, the context is also characterized by a strong disparity in terms of the social responsibility of promoters. We find that some promoters are true speculators, seeking to earn a lot of money in the short term by banking on potential parks. Yet we also find other extremely socially responsible promoters who seek, from the very start, to promote a spirit of dialogue with the owners to reach a contractual solution that may favor rural communities inasmuch as possible without impeding the promoter’s business.
The SC designed by the GWO is a proposal that attempts to avoid speculation, and it tries to do so without calling business investment into question. In short, it seeks a democratic governance of energy transition linked to wind energy in Galicia within the existing legal framework.
The main characteristics of the standard contract are as follows:
Taking the Galician Wind Sector Plan (PESG) as a starting point, SC must include the entire area affected by the wind farm. This implicates the areas directly occupied for the wind turbines, the roads, the trenches and the substation as well as the easement area as set in the current PESG.
The proposal excludes the amount of rent to be paid, which is subject to negotiation between the parties. However, the Observatory offers the necessary support to reveal the average income in Galicia, the productivity of each territory, and the estimated total turnover of each wind farm. Likewise, the SC establishes the need to negotiate a minimum annual payment and the option to collect all the income represented in the contractual time-frame in a single lump-sum payment. On the other hand, the income will be updated according to the Consumer Price Index (CPI). A negative CPI implies no income variance.
The payment of annual rent will begin the moment the landowner and the developer sign the contract.
A productivity clause will be established. This means that each incremental percentage point in average productivity of the wind park relative to the average productivity of all Galician wind parks will produce a similar increase in annual income.
Equalization clause. Should there be a contract granting better economic conditions to another park akin to the one currently subject to the agreement, the promoter must match the annual payment.
The promoter must contractually agree to maintain the agricultural, livestock and forestry services existing prior to the start-up of the wind farm.
Likewise, the landowners must follow all the indications of the contract so as not to cause any hindrance in the normal evolution of electricity production on the wind farm.
The promoter undertakes to give priority for the jobs arising from the wind farm start-up to the residents of the parish or town hall where this wind farm is located.
The Galician Wind Observatory defends wind energy as a formula to advance energy and ecological transition. It demands that public policies be aimed at guaranteeing not only the growth of installed power but also a fair and democratic participation of all actors, especially rural communities. As shown on several occasions, as in the Report on the Economic Impact of Wind Energy in the Galician Rural Territories, some regulatory changes could also help to achieve this objective.
If you wish to access the content of the contract, you may do so by clicking on the following links. We only have one version in Galician of the standard contract for the Comunidades de Montes Veciñais en Man Común and the standard contract for individual private owners.