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Thread: Decommissioning of wind turbines.

  1. #1

    Default Decommissioning of wind turbines.

    There is ‘much ado’ about the above.
    Who is going to pay?

  2. #2
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    This report on the NatureScot web site addressed this issue in 2013
    https://www.nature.scot/sites/defaul...nd%20farms.pdf

    The relevant section is from page 13.

    It remains to be seen how effective these bonds will be in the future and if they are being built up.

    See
    2.8 Landowner’s Perspective and Restoration and Decommissioning BondsThe importance of decommissioning security is of concern to the Landowner and is oftenmore closely considered in the ground lease and other contractual arrangements with theDeveloper than the consenting process and EIA. It is in the Landowner’s interests that thelease contains provisions requiring the lessee to remove the wind farm and to restore theland to its original condition otherwise the land could be returned to the Landowner with anon-operating energy facility and all related structures left on it. Such a situation could limitthe use of the land and also result in removal costs and expenses, unless reimbursement ofthe same has been addressed at the outset of the lease. This could result in landscape andvisual issues and detract from the value of the land.Including a decommissioning provision in the ground lease ensures that the Developer willultimately be responsible for the decommissioning of the wind farm. This would include theassociated environmental factors to be considered such as, noise, dust, public safety, waterquality, waste and hazardous materials, impact on habitats, wildlife and livestock.Decommissioning bonds and security have been developed for wind farms in Scotland butknowledge of this is rather fragmented due to commercial sensitivities and an organicapproach of bespoke arrangements between Developer, land owner, the Planning Authorityand their legal advisors, Biricik and Haroun (2010) explain how the experience of publicLandowners in the United States (US) has led to the development of regulations concerningthe removal and restoration requirements of energy projects which include: Removal of all foundations, pads and underground electrical wires to a depth of four feetbelow ground surface; Removal of all hazardous materials from the property and disposition of hazardousmaterial in accordance with federal and state law; Restoration of the site to its original condition prior to location of the generating facility,subject to reasonable wear and tear; Restoration of site vegetation; Removal of all structures (including transmission equipment and fencing) and debris to adepth of four feet, restoration of the soil, and restoration of vegetation within six months ofthe end of project life or facility abandonment; and Removal of all access roads (unless the Landowner desires to keep the access roads)and implementation of a post-decommissioning storm run-off plan.In the case of such regulations in the US these are considered at the time of developing theground lease such that they can be the responsibility of the lessee rather than fall to theLandowner. In the UK, the Developer’s obligations under the lease tend to be based on thecontents of the ES and therefore, in terms of restoration and decommissioning, will be relianton the level of detail provided within this.The cost of the decommissioning (in the US) can be provided for by agreeing security beforecommencing construction on the site. This can take several different forms: A letter of credit from a financial institution that is creditworthy or that is otherwise subjectto the Landowner’s approval, and the form of the letter of credit should similarly requireLandowner approval; A guaranty, with similar considerations to the letter. For example, the Landowner will wantto analyse the credit-worthiness of the entity providing the guaranty and perhaps set forth 14minimum requirements in the lease agreement as to who may act as a guarantor andwhat form the guaranty should take. A cash account, held by the Landowner, to which the Developer makes periodiccontributions until the fund reaches a denominated amount which equals the parties’reasonable estimate (or the estimate of a neutral third-party consultant) of the costsrequired to decommission the project.The decommissioning security is also referred to as a Reinstatement or DecommissioningBond. For example, for Brown Muir Wind Farm (near Elgin) the Developer Vento Luden(2012) states that a provision will be agreed with the Local Authority and contained within theSection 75 agreement. This sum of money will be held in a bond available for use by eitherthe Landowner or the Planning Authority and will cover the full decommissioning costs of thewind farm and reinstatement of the land. The bond is required to provide security in theevent that the Developer defaults on their obligation to decommission and restore the windfarm. If the Developer fulfils their obligations this is at their own cost, the bond cannot bedrawn on by the Developer.In SSE Renewables British experience, where a Planning Authority has required a Section75 Agreement the Decommissioning Bond (i.e. security) is also put in place prior tocommencing construction. Typical values are of the order of £15K per MW installed to coverthe cost of breaking out foundations to c.1m below ground level, some track reinstatementand removal of cables and substations. The dismantling of the turbines is assumed to bepaid for by the monies recovered from onward sale or scrap value of the components.

  3. #3

    Default

    Thank you.
    Firstly the decommissioning cost will be monumental!
    Lets hope that this money (if collected’), is held in some kind of trust.
    I recently saw a Wind farm in North America where one of the blades broke from a Windmill. The Company after much discussions stated they had No Money to cover replacement. They just went bankrupt.
    I think the reasons for this is that Companies build these with much assistance from Local Government, whereby the Company itself does not have the Financial strength to continue on, and just walk away.

    And I don’t think that this was properly looked into in any Country……and personally the ‘clean power’ generated does not cover the costs of the materials, transportation and a myriad of things, for many years…If it ever does! ……….To sweeten the Pot the Companies hold out incentives to local groups ‘who are pleased to get something for nothing’ but really it’s all tied upwith the profit.
    So…..The Populace is actually paying for the return incentives!

    This is my take on it at the present time.
    Last edited by The Horseman; 15-Sep-21 at 21:54.

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