10/16/08 The leases are signed, the land is torn up, 1000 tons of rebar and concrete have been set down for the foundation, and the wind developer goes broke. What happens to the farmer and his hopes of income from the turbines? What happens to his field? Who is responsible for what happens next?
Wonder what happens to the farmers who have leased their land to wind developers whose financial situation tanks suddenly? Wonder what happens to their land when half-done construction comes to a halt? What if they've already poured the platform of more than a thousand tons
of concrete and steel rebar, 30 to 50 feet across and anywhere from 6
to 30 feet deep? What if they've already torn up the field for the cable trenches and the access roads?
Most contracts allow the developer to sell the lease to a farmers land to anyone who is willing to buy it. Most contracts allow the developer to break-off the contract with the farmer with little notice, requirements or compensation.
What happens to the land then if the township has not adopted an ordinance which has a decommissioning plan in place for an event like this? Farmers around the country are about to find out:
Citing credit woes, Noble Environmental Power LLC of Essex Connecticut announced last week that all work was suspended at its 14-turbine wind farm under construction in Bellmont, New York. The turbine foundations have already been laid at the site and Noble indicated work would not resume until summer 2009. Contractors for Noble have informed Windaction.org that, while the announcement was sudden, there were indications the firm was experiencing cash flow problems months ago.
Earlier this year, Noble filed plans to raise $375 million in an initial public offering (IPO). The share sale was to be underwritten by now bankrupt Lehman Brothers. Public reports of the IPO stated the company showed no revenue on its income statement and was nearly $1 billion in debt. The company has 282 megawatts in operating wind power projects in the U.S.
Noble Environmental, along with First Wind (formerly UPC Wind), is under investigation by New York Attorney General Andrew Cuomo for alleged improper dealings with public officials and anti-competitive practices. It is reported the company's credit woes partially stem from reluctance of financiers to invest in a company under investigation.
Noble’s problems are not just legal and financial, they're also technical. The company is experiencing problems with its Clinton and Ellenburg wind parks erected in Clinton County NY and online earlier this year. None of the 121 turbines have been operational for the last two weeks. The root cause of the shutdown has not been announced.
In these troubling economic times, Windaction.org strongly encourages communities and landowners involved with wind farm development to look out for themselves by ensuring decommissioning plans are filed prior to commencement of any construction. Such plans should be backed with bonds sufficient to cover the costs of restoring a site to its original condition and the full removal of scrap materials. Note, given dramatic fluctuations in scrap value and hauling costs, decommissioning plans should never allow the value of the scrap to be deducted from the projected turbine dismantling costs.
NOTE FROM THE BPRC RESEARCH NERD: All of the five Wisconsin townships which have adopted wind ordinances provide decommissioning requirements for just this situation. Download these ordinances by clicking here. Plan to bring up this issue at your next town meeting. And contact us for any questions you may have about this issue by clicking here.