Wind Energy Projects

Given the large expanses of wind farms and ancillary infrastructure, such as switching stations and substations, it is absolutely critical for wind project developers to obtain the appropriate rights from all required parties. Unfortunately, we have seen developers having to go back to landowners to request a “re-do” on their land leases because they did not contain sufficient rights to support the normal development and operation of the wind farm. Generally, larger wind farms (e.g., 100 MW +) have greater risks of title and contiguity issues and will usually involve interfaces with municipalities for road and other land use, as well as additional utilities and services. The land rights may also include a combination of land lease agreements, easements and fee simple land ownership. In addition, these issues may necessitate utility crossing agreements and utility relocation agreements related to railways and other infrastructures with a variety of counterparties with differing interests.

We have excellent working relationships with title insurance companies and their underwriters, and can assist you in properly planning your project. We can also help you with your due diligence requirements to identify deficiencies and wrap property interests as a whole into a cohesive, comprehensive package.

The days of full-wrap construction contracts for large energy projects are largely gone in Canada. These days, the owner typically splits the scope of the work into two — the purchase of the turbine equipment from the turbine vendor and the contracting of the balance of plant work, including other key pieces of equipment such as transformers — and then needs to link those components as seamlessly as possible. The project then needs to be connected either to a transmission system, a distribution system or a private line that leads to the transmission or distribution system. Managing your project’s critical path and scope as well as potential risks can be a daunting task for both experienced wind energy developers as well as those entering the market.

We have significant experience and expertise in creating effective construction and equipment supply turbine contracts and identifying interface risks and issues, especially with shared transmission lines, and have worked with owners and lenders to deliver effective solutions. We also focus on making the key provisions of the documents consistent with the developer’s obligations under the PPA and the applicable connection agreement with the transmitter or the distributor. As well, our national Construction and Infrastructure Group has significant experience in dealing with international players entering the Canadian market, especially on the construction contracting side, and we know how risks and disputes can play out and should be managed.

Project proponents must be aware of the operation of builder/mechanic lien legislation, including Ontario’s Construction Lien Act, which is in the midst of being significantly reformed. Whether you are an owner or a lender, we can help you understand how wind energy legislation can have an impact on different types of land interests, including Crown lands and Indigenous lands.

Indigenous involvement

Indigenous involvement in wind farm projects is continuing to grow, and Indigenous issues are one of the most common sources of regulatory delay and uncertainty for new natural resource development projects in Canada. More importantly, we are seeing increasing numbers of partnerships with Indigenous groups, and believe that it is crucial for experienced counsel to ensure that the parties enter into arrangements that are realistic and financeable. It’s critical for project proponents to understand the legal requirements and risks associated with Indigenous and treaty rights and related consultation, and to develop strategies to manage these risks. Our Indigenous law practitioners advise clients on the duty to consult and the preparation of Indigenous consultation policies and reports, and negotiate and develop impact benefit agreements. We can help you create a successful Indigenous strategy and stay up to date on major developments as Indigenous law in Canada continues to evolve.

Environmental issues and guidelines

It’s important to anticipate and address environmental concerns early on in order to avoid potential setbacks that can threaten project completion. Our environmental experts can help you address environmental requirements during the siting, construction and operation of your project and obtain the appropriate approvals. We have experience with environmental issues relating to wind farm development and operation, including compliance with Renewable Energy Approvals and other permits, and on-going monitoring plans. Our team is also committed to keeping clients up to date on wind energy guidelines and directives as they are issued.

Evolving wind energy regulations

As the renewable energy industry continues to evolve, so do the legal and regulatory requirements associated with the development and financing of renewable energy projects. Our regulatory practitioners have the expertise to help you successfully navigate the complexities of this shifting landscape and address regulatory hurdles, including wind turbine regulations. We are a trusted advisor to organizations, including APPrO on electricity generator and related transmission regulatory issues and power trading and utility regulation, and have appeared in front of the Ontario Energy Board and the Canada Energy Regulator (formerly the National Energy Board) on leaves to construct and other regulatory matters.

The returns on your wind energy project revenue are affected by loan terms, making it vital to understand financing options and prepare due diligence documentation before approaching financing entities. Most of our 2,000 MW portfolio of experience has been financed on a project-finance basis, so we are very familiar with lender requirements, whether terms are considered consistent with market practice and what it takes to get your project successfully financed. This experience naturally supports our thinking on all of the material project documents as they are developed, from a PPA to a balance of plant construction contract. In addition, we can review or develop your term sheet in the context of bank or bond financings as needed. We also see around corners on the inevitable teething issues and events that occur in the operational life of the project and the times where lender consent may be needed, and build them in to the credit agreement from day one.

The structuring of wind farm project entities can be complex, particularly in multi-party joint venture projects. It is critical to establish clear rules between partners for project governance as well as to enable them to eventually exit the project. Further complexities can arise when additional partners such as municipal corporations and Indigenous groups take an ownership stake in a wind farm project and have particular interests that need to be protected. We have successfully advised on many of these arrangements in the Ontario marketplace and elsewhere, with input from our corporate and tax colleagues.

As well, the pace of mergers and acquisitions in the Canadian renewable energy market is increasing, as many project sponsors eventually seek to exit or monetize their project interest after commercial operation is achieved. We are adept at structuring the project partnership documents to anticipate this and building in the necessary flexibility. We have acted for both sellers and acquirers of several wind farm projects, and are well positioned to assist by drawing on the expertise of our industry-leading M&A practice.