The grooup has signed a collaboration agreement with Peel Energy, part of the Peel Group, which it said provided a framework to identify, assess and potentially develop wind farms on sites within UK Coal's land portfolio.

A statement released this morning said Peel Energy had considerable experience of onshore wind farm development in the UK and the agreement will give UK Coal access to resources and expertise to realise over time the potential for wind farm development within its extensive land portfolio.

The agreement relates only to wind farm development and has no impact on UK Coal's mining and property businesses.

Given the nature of sites attractive for wind farm development, most of the land likely to be considered for wind farms has little value for alternative commercial use, the statement added.

Initially, the agreement provides Peel Energy with a two year period of exclusivity to work together with UK Coal to identify and evaluate sites suitable for wind farm development.

For each prospective site covered by the agreement, Peel Energy will, at its expense and subject at each stage to UK Coal's agreement, undertake a phased programme of initial evaluation, further assessment and pursuit of planning permission.

If a site is submitted for planning permission, a special purpose company will be formed by Peel Energy, and UK Coal will be granted an option to acquire a 50 per cent equity share.

At the same time, UK Coal will grant the special purpose company an option for a 30 year lease over the relevant land at an open market rent.

Conditional upon planning permission being granted, and subject to each party exercising their respective options, the subsequent development, operation and funding (including UK Coal's contribution) of any particular site will be governed by a joint venture agreement between UK Coal and Peel Energy.

UK Coal has agreed that 14 wind farm sites, already identified by UK Coal, will be covered by the agreement.

It said these projects were at varying stages of development from inception to planning negotiations and, if all were successful, would have the potential for 54 wind turbines generating up to 133 MW of power.

Jon Lloyd, chief executive of UK Coal, said: "We believe there is significant opportunity to develop wind farms on parts of our land portfolio.

"By allying with Peel Energy, we are joining forces with one of the UK's most active and knowledgeable wind power companies.

"This will accelerate our alternative power business whilst maintaining total flexibility on the level of investment we make in it and without distracting us from our core mining and property development operations."