The breeze that pushes inwards from North Carolina’s coastal currents and the nearby flat farmland made this part of the country an obvious choice for clean energy developers.
Which is why it’s not surprising to find that internet giant Amazon is preparing to build 104 turbines on North Carolina farmland. Once operational in 2016, the 208 MW/hour production wind farm will help Amazon Web Services adopt clean energy to power its cloud data centres. It will also help Farmland Partners, the New-York listed real estate investment trust (REIT) leasing the land where the wind farm will be built, nab a significant boost in rental income.
“To be blunt, we’re kind of getting lucky,” Farmland Partners chief executive Paul Pittman told Low Carbon Energy Investor. “We don’t pick our farms on wind and solar capabilities. If the opportunity comes along, we happen to take advantage.”
Spanish developer Iberdrola Renewables, which will build and operate the wind farm for Amazon, agreed to pay $2,600 per acre for 28 acres of farmland for 25 years, a hefty increase from the $275 per acre charged to farmers in the area. That will boost total rent across Farmland Partners’ 1,839 acres of leasable farmland by some 13 percent.
The good news for farmland property holders like Farmland Partners is that clean energy offers a new and scalable way to increase revenue. “With green energy, a pretty big portion of our portfolio is eligible,” Pittman said. From eastern Colorado and Kansas to Illinois and down to the Gulf Delta states of Mississippi and Louisiana, Pittman said there are “many more projects under consideration” for Farmland Partners’ 72,000 acres of North American farmland. There is more development likely for North Carolina too.
“The beauty from our perspective is it doesn’t disrupt agriculture in a significant way,” he said. “We won’t make a big show up of 2,000 acres and take an entire farm.” Instead, they lease a “patchwork” of farmland to renewable developers. And if crops are damaged during construction, the developer will pay crop damage.
Pittman compared turbines to the high-voltage power lines peppered across the country. “They go up, and you farm around it for the rest of your life,” he said, adding farmers don’t care about the blades spinning overhead as long as they have the space needed to manoeuvre their equipment.
He argued there is a “misunderstood upside” to developing renewable energy generators on farmland. “We own land acquired for agriculture production, but land is scarce.” It’s important for food production, transportation and housing, he said. Now, for a growing number of businesses, it’s also important for catching a breeze.
Reporting by Jordan Stutts.