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« The Sun says shun alarmism | Main | Scam, scam, scam - Josh 339 »
Wednesday
Aug262015

Shelling out for windfarm operators

A few weeks ago, and unnoticed by yours truly, David Davis MP took a step to address one of the most egregious practices of windfarm operators.

The big companies that build windfarms tend to put each of their developments in a separate shell company, with a small share capital and funding provided instead through a large loan from the parent company. With profits immediately passed up to the parent, the operating businesses will usually have no net assets, which means that if any large liabilities arise there is nothing available to meet them.

And liabilities certainly do arise. The most obvious ones are claims for damages from the neighbours, whose sleep patterns are disturbed by the noise and the flickering light. Further down the line of course there is the cost of removing redundant windfarms from the landscape. As it is, these costs will fall on the public.

Davis's Public Nuisance from Wind Farms (Mandatory Liability Cover) Bill would force windfarm operators to hold cash and insurance sufficient to cover against these costs. Its second reading is in September.

I don't think the subsidy junkies are going to like it.

 

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Reader Comments (19)

One problem is that it will be bill payers who end up not liking it up em, as costs will be passed on, the planet must be saved and someone else must pay.

Aug 26, 2015 at 10:44 AM | Unregistered CommenterMikky

People could be forgiven for not thinking how nuclear power stations would be removed when we first built them but no major project in the last thirty years should have been allowed to go ahead wthout clear plans (and financing) of how a modern development would be cleared up at the end of its life.

This issue and things like the carbon trading scams were easy to spot in advance. The reason they weren't was due to the panic engendered by the issue. THIS is why everyone should retain some scepticism about CAGW. Even if a problem is acute, you don't just wildly leap at potential solutions. A minister who invests money and public good will in dodgy schemes is letting eveyone down, including future generations who might suffer from AGW. Ministers don't just fritter the money away they set minds against stuff we may have to do in the future.

Aug 26, 2015 at 10:49 AM | Unregistered CommenterTinyCO2

Not that this type of legislation did much good to the neighbours of Opencast mines, the local councils did not audit the companies and they did not put the required clean-up funds in place despite committing to.

http://www.planningresource.co.uk/article/1305808/rule-change-call-probe

The problems were triggered when two mining companies, Scottish Coal and Aardvark TMC, went into liquidation in 2013. The scale of environmental degradation at sites where the companies operated then became apparent.

Planners at East Ayrshire Council were responsible for monitoring compliance with planning conditions, which should have ensured that the sites were subject to restoration work, such as filling in holes left by excavation. They were also responsible for ensuring that a bond set up to pay for restoration in the event of a mining company going bust was adequate.

An independent review of the council's services found "major and persistent failings in procedure and practice" within the council, particularly in the planning service. The scale of environmental degradation at the sites was "difficult to comprehend" the report concluded. Disciplinary proceedings at the council followed and the head of planning and economic development was dismissed in July.

Aug 26, 2015 at 10:56 AM | Registered CommenterBreath of Fresh Air

A step in the right direction. In the meantime, communities in the most blighted areas should consider launching investment plans to take some of the sting out of the removal and restitution costs which they shall probably have to bear over the next, what, 10 to 20 years? The bribes being paid to them by windfarm operators ought to be ring-fenced into such investment accounts, for a start. Only if and when an effective bill of the kind proposed by Davis is brought into law, should such plans be shelved.

Aug 26, 2015 at 10:57 AM | Registered CommenterJohn Shade

TinyCO2: All nuclear power stations put money aside for decommissioning. On privatisation, the ring-fenced money that the CEGB had put aside was stolen by the treasury. The current nuclear power stations all put money aside for decommissioning.

Aug 26, 2015 at 11:41 AM | Registered CommenterPhillip Bratby

" On privatisation, the ring-fenced money that the CEGB had put aside was stolen by the treasury." Phillip Bratby

And if the treasury has to pay the bill in the end, that's fine, they've had the money. But a privately built, profited, subsidied concern shouldn't be able to walk away from the clean up bill.

Aug 26, 2015 at 11:52 AM | Unregistered CommenterTinyCO2

This is the sort of dodgy procedure that has given all sorts of industries a bad name. Home improvement, get rich quick, money makers such as double glazing and new kitchen installers, have been castigated by investigative reports on TV consumer rights programmes.

Any chance that the BBC could fight for justice over the plague of Green Robbing Hoodies, or is existing consumer rights legislation inadequate to protect taxpayers and the environment?

Who would have thought the caring concerns of the Big Green Blob would be corrupted, by the Big Green Blob?

Aug 26, 2015 at 1:08 PM | Unregistered Commentergolf charlie

TinyCO2 said

"People could be forgiven for not thinking how nuclear power stations would be removed when we first built them but no major project in the last thirty years should have been allowed to go ahead wthout clear plans (and financing) of how a modern development would be cleared up at the end of its life."

To be fair this was forseen. Initially the responsibility and funds for decommissioning were vested with the UK Atomic Energy Authority and the Central Electricity Generating Board (CEGB). However when the UK power industry was privatised the CEGB was abolished and the UKAEA was radically downsized. The responsibilities were passed on to the Nuclear Decommissioning Authority.

The money to decommission the Magnox plants was actually put into a fund set aside by the CEGB which stood at around 4 billion pounds in 1989 but this money was simply appropriated by the government on privatisation. There was also a fossil fuel levy which contained around £ 8 billion but this was also appropriated by the government and like the levy passed into the UK General fund in return for which the government accepting the liabilities for decommissioning.

The politicians concerned of course knew they would not be still around to carry the can when the bills came due.

Aug 26, 2015 at 1:32 PM | Unregistered CommenterKeith Willshaw

Wind farms will always be a parasite on the economy, and harmful to health and environment, as long as we are foolish enough to continue subsidizing them.

Aug 26, 2015 at 1:37 PM | Unregistered CommenterMikeW

keith willshaw, thank you for that.

The term or concept that "the polluter pays" is one I have come across in my professional career. Is that enshrined in law, and if so was it in force when the then government took the money previously ring fenced?

Aug 26, 2015 at 1:45 PM | Unregistered Commentergolf charlie

Seems to me that what is needed is a claw back provision that has some kind of lien against past distributed profits, otherwise the loss will be carried entirely by the rate payers.

Aug 26, 2015 at 2:44 PM | Unregistered Commenterbernie1815

Breath of Fresh Air
I think, in recent years, the standard of site restoration of Opencast / Surface Coal Mines operated by the larger companies (UK Coal, Banks) has been very good. They certainly have loads of awards for the work carried out.
I can't say about Scottish Coal and Aardvark.
But it can't have helped when the Coal Industry (deep or surface) has been systematically and deliberately destroyed by ALL the political parties (despite MPs and NGOs featuring on telly when the closure announcements are made, loudly sobbing into their hankies that coal is "no longer competitive").
In England and Wales, the Coal Authority is supposed to be the back-stop for resolving issues if a coal company folds.
Obviously, even if the same applies in Scotland, priority will be given to safety issues rather than fluffy & cuddly restoration works. And the long suffering tax-payer will pick up the tab for the costs, of course. Just as they will certainly pick up the costs, the unemployment and economic damage, never mind the decommissioning costs of ruinables.
And certainly, I cannot believe that ANY politicos can realistically claim they weren't warned. But it was more convenient to accept that those who warned were evil 'deniers'. Or 'flat earthers' as Gordon the Moron put it.
But the real surprise is that:-
"Disciplinary proceedings at the council followed and the head of planning and economic development was dismissed in July."
Wow. That is a first. Accountability for once?

Don't be surprised if legal action follows resulting in large compensation payments as he/she will claim (probably truthfully) that he was 'only following policy / orders'.
That is what we've seen time and again with dismissed senior social workers and others.

Aug 26, 2015 at 3:06 PM | Unregistered CommenterMartin Brumby

I understood deliberate attempts to defeat creditors can be overruled by the courts. The liability for compensation can move up to the ultimate owners of the assets. No doubt someone can enlighten me on the latest position.

Aug 26, 2015 at 4:17 PM | Unregistered Commenterferdinand

'the operating businesses will usually have no net assets, which means that if any large liabilities arise there is nothing available to meet them'

BINGO that is indeed how it will all work out , come decommission those that made the cash will be no where in sight, instead shell companies with no assets will be left to foot the bill and with no cash its the public who will pay.

You could see that trick coming from a mile away.

Aug 26, 2015 at 5:02 PM | Unregistered Commenterknr

Surely decommissioning will never happen to wind turbines. They will just be replaced like-for-like or by a bigger 'better' model, no?
/ sarc off

Aug 26, 2015 at 6:21 PM | Unregistered Commenteroldbrew

This didn't start with wind farms. It started when government and local authorities decided to invite tenders for projects where the contractor would have to accept unlimited liability forever. As no one in their right mind would commit an organization to such an obligation, the result was shell companies.

Aug 26, 2015 at 7:36 PM | Unregistered CommenterNW

In Texas oil well owners have to post a guarantee that they can safely plug the well as part of their operating compliance.
At the least the equivalent should be required of windmill operators. At the end of their operating life, the owners should have enough financial responsibility in the form of either cash or a suitable financial guarantee such as a bond or cash escrow to see that the machine is properly taken down and its footprint removed and the land restored.

Aug 26, 2015 at 7:37 PM | Unregistered Commenterhunter

Wind towers 15 miles east of our house in central Washington State, for the foundation
required 120 anchor bolts, 30,954 nuts, and 11,750 cubic yards of concrete. From-- http://www.pse.com/aboutpse/Facilities/Pages/Wild-Horse.aspx

That's a large and very tough mass of concrete and steel. Just guessing but I think most will be there as long as the tombs in the Valley of the Kings.

Aug 26, 2015 at 9:38 PM | Unregistered CommenterJohn F. Hultquist

@ hunter

> In Texas oil well owners have to post a guarantee that they can safely plug the well as part of their operating compliance.

Who holds the guarantee cash, please ?

In quite a number of south-east asian countries, including one well known for its' high degree of sovereign risk, posting an environmental levy of considerable size to start a mining operation as a guarantee of eventual clean-up, is mandatory. Unhappily, one has to post the cash with the relevant Govt department. And, as has happened many, many times, when clean-up time finally arrives (perhaps 20 years) the bond cash is nowhere to be seen, gone with the wind. The initial depositor has a lawful receipt to prove the money was indeed deposited, so they have no further legal obligation - but there is still no money for clean-up, so it just doesn't happen

Aug 27, 2015 at 12:34 AM | Unregistered Commenterianl8888

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