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Presentation to Lee County Zoning Board of Appeals On Behalf of Local Landowners and Hamilton Township Tom Hewson John Stamberg P.E. Principal Energy Ventures Analysis Inc Arlington Virginia 703-276-8900 November 27, 2011
Decommissioning Costs and Risks Why should Lee County care? Paul Gipe estimated that there over 14,000 wind turbines in California alone that were
abandoned by 1997. Abandoned wind turbines have/will continue to adversely affect local property values and character.
Caithness Windfarm Information Forum (www.caithnesswindfarms.co.uk) tracks wind
turbine accident data that can be confirmed through press reports or official releases. They have documented (through 9/2012) 249 turbine blade failure incidents, 195 turbine fires and 130 structural failures– that can lead to premature unit decommissioning.
Wind facilities are often developed as limited liability corporations. At the end of the
project life, the LLC may have no equity remaining to fund decommissioning cost.
Pre-funding future decommissioning costs has become a common requirement for wind
project permitting.
Intent to have cost paid by wind developer who financially benefits from wind project operation Different approaches available to assign decommissioning cost and risk between wind project operators and local community
Decommissioning Risk
Abandoned Wind Turbines at Kamora Wind Farm (HI)
Decommissioning Risk
130 documented cases of structural failure such this January 2008 accident in Cumbria UK
Decommissioning Risk
Wind turbine foundation failure
Decommissioning Risk
195 Documented Wind turbine fires such as this turbine in Germany. Can be caused by equipment failure or lightning.
Decommission Planning Decommissioning Plan Components Defining Scope of Work: Dismantling wind turbines and met towers Removing turbine foundations (to what depth?) and land reclamation Removing crane pads Substation removal (transformers, equipment, foundations, etc..) O&M building removal Access Roads- Retain or remove? Collection system electrical system- Abandon underground lines or remove? Trigger decommissioning as individual turbines cease operation or wait until entire project is shutdown
Decommission Financing Financing cost approaches Project performance bond for a defined scope of work with an approved
highly rated bonding company--- Assigns 100% of project risk to project bonding agency
Financial bond at a preset amount to be sufficient to cover anticipated
decommissioning costs– Leaves future cost escalation and scrap value risks to local community and property owners
Other financial assurance – Assigns full financial risks to local community
and property owners if financial assurance entity fails
Decommissioning Costs
Decommissioning Costs Table 1. Decommissioning Cost Known To Wind Turbine Contractors and Items with Insufficient Details to Make Independent Demolition Estimates
Decommissioning Costs Table 2 Net Scrap Salvage Value Dixon Iron and Metal 7/20/12 Verbal Scrap Amounts I. Turbine Metal
Quote
(4)
Per Turbine Received Scrap Value
Truck Delivery
Cost to Disassemble
(5)
(6)
$400 (2 trips)
$1,000
$2,305
$2,895
$400 (2 trips) $200 (1 trip)
Nil
$2,305
$3,070
Nil
$1,153
$6,147
Cost
or Torch
Cost to Load at Wind Farm Crew B-12N
(7)
Net Scrap Value
(1),(3)
A. Rotor 60 Tons 1. Hub Iron/Steel 2. Blades
40 tons
$165/ton
$6,600
20 tons
-
-
35 tons
$165/ton
$5,775
35 tons
$7,500/each
$7,500
(1),(2)
B. Nacelle 82 Tons 1. Gear Box, Transmission, Brakes 2. Generator 3. Non-Metal C. Tower/Bolts 1. Tower
12 tons
-
-
205 tons
$165/ton
$33,825
$4,000 (10 trips)
$5,000
$11,525
$13,300
280 tons
$53,700
($5,000)
($6,000)
($17,288)
$25,412
24,360 tons
$4,671,900
($435,000)
($522,000)
($1,504,056)
$2,210,844
$3,276 at
$66 (3 trips)
Nil
$768
$2,442
($5,742)
Nil
($66,816)
$212,454
$800 (4 trips)
Nil
($2,305)
$59,294
-
-
-
-
$347,412
($6,542)
Nil
($69,121)
$271,748
$5,019,312
($441,542)
($522,000)
($1,573,177)
$2,482,592
(2)
D. Subtotal per Turbine E. Subtotal per 87 Turbines II. Transformers/Miscellaneous A. Turbine Transformer 1. Sheet Steel 2. Core Steel 3. Core Copper 4. Oil
7.48 tons 3.1 tons 1.6 tons 1.6 tons
D. Miscellaneous (in above Section I) E. Subtotal per 87 Turbines III. Total Salvage Value
$0.26/#
(9)
1.15 tons
B. Subtotal per 87 Turbines C. Master Primary Transformer (MPT)
6.3 tons
$285,012 120 tons
(10)
$62,400 $0.26/# -
Decommissioning Costs Table 3 Non-Metal Disposal Costs Item
Amount
1.
Blades
20 tons
2.
Nacelle Non-Metal
12 tons
3.
Transformer and Transmission Oils
500 gal
4. 5.
Landfill Dumping Cost
Trucking
Cost To Load
$200 (1 trip)
$51.00 3/day (Crew B-10-U)
$900
(
$5,542.50
$1,452.60 (Crew Q-20)
$200 (1 trip)
$51.00 3/day (Crew B-10-U)
$450
$2,153.60
$1,200 = 12 barrels @ $100/barrel
$50.00
Nil
$450
$1,700.00
Cost per Turbine
$7,024.10
$450
$102
$1,800
$9,376.10
Cost for 87 Turbines
$611,097
$39,150
$8,874
$156,600
$815,721
Lee County landfill charge at $900 per 20 ton load
Site Process Cost $4,371.50/3 blades (Crew B-7)
Total Cost
Decommissioning Costs Table 4- Foundation Removal and Land Reclamation
Decommissioning Costs
Table 5 --Road Removal Costs
Decommissioning Risk Future Labor Cost Escalation Scrap Market Value Changes Landfill Disposal Costs Land Acquisition Costs Landfill Regulation Changes Heavy Equipment Rental Costs Fuel Costs
Presentation to Lee County Zoning Board of Appeals On Behalf of Local Landowners and Hamilton Township Tom Hewson John Stamberg P.E. Principal Energy Ventures Analysis Inc Arlington Virginia 703-276-8900 November 27, 2011
Decommissioning Costs and Risks Why should Lee County care? Paul Gipe estimated that there over 14,000 wind turbines in California alone that were
abandoned by 1997. Abandoned wind turbines have/will continue to adversely affect local property values and character.
Caithness Windfarm Information Forum (www.caithnesswindfarms.co.uk) tracks wind
turbine accident data that can be confirmed through press reports or official releases. They have documented (through 9/2012) 249 turbine blade failure incidents, 195 turbine fires and 130 structural failures– that can lead to premature unit decommissioning.
Wind facilities are often developed as limited liability corporations. At the end of the
project life, the LLC may have no equity remaining to fund decommissioning cost.
Pre-funding future decommissioning costs has become a common requirement for wind
project permitting.
Intent to have cost paid by wind developer who financially benefits from wind project operation Different approaches available to assign decommissioning cost and risk between wind project operators and local community
Decommissioning Risk
Abandoned Wind Turbines at Kamora Wind Farm (HI)
Decommissioning Risk
130 documented cases of structural failure such this January 2008 accident in Cumbria UK
Decommissioning Risk
Wind turbine foundation failure
Decommissioning Risk
195 Documented Wind turbine fires such as this turbine in Germany. Can be caused by equipment failure or lightning.
Decommission Planning Decommissioning Plan Components Defining Scope of Work: Dismantling wind turbines and met towers Removing turbine foundations (to what depth?) and land reclamation Removing crane pads Substation removal (transformers, equipment, foundations, etc..) O&M building removal Access Roads- Retain or remove? Collection system electrical system- Abandon underground lines or remove? Trigger decommissioning as individual turbines cease operation or wait until entire project is shutdown
Decommission Financing Financing cost approaches Project performance bond for a defined scope of work with an approved
highly rated bonding company--- Assigns 100% of project risk to project bonding agency
Financial bond at a preset amount to be sufficient to cover anticipated
decommissioning costs– Leaves future cost escalation and scrap value risks to local community and property owners
Other financial assurance – Assigns full financial risks to local community
and property owners if financial assurance entity fails
Decommissioning Costs
Decommissioning Costs Table 1. Decommissioning Cost Known To Wind Turbine Contractors and Items with Insufficient Details to Make Independent Demolition Estimates
Decommissioning Costs Table 2 Net Scrap Salvage Value Dixon Iron and Metal 7/20/12 Verbal Scrap Amounts I. Turbine Metal
Quote
(4)
Per Turbine Received Scrap Value
Truck Delivery
Cost to Disassemble
(5)
(6)
$400 (2 trips)
$1,000
$2,305
$2,895
$400 (2 trips) $200 (1 trip)
Nil
$2,305
$3,070
Nil
$1,153
$6,147
Cost
or Torch
Cost to Load at Wind Farm Crew B-12N
(7)
Net Scrap Value
(1),(3)
A. Rotor 60 Tons 1. Hub Iron/Steel 2. Blades
40 tons
$165/ton
$6,600
20 tons
-
-
35 tons
$165/ton
$5,775
35 tons
$7,500/each
$7,500
(1),(2)
B. Nacelle 82 Tons 1. Gear Box, Transmission, Brakes 2. Generator 3. Non-Metal C. Tower/Bolts 1. Tower
12 tons
-
-
205 tons
$165/ton
$33,825
$4,000 (10 trips)
$5,000
$11,525
$13,300
280 tons
$53,700
($5,000)
($6,000)
($17,288)
$25,412
24,360 tons
$4,671,900
($435,000)
($522,000)
($1,504,056)
$2,210,844
$3,276 at
$66 (3 trips)
Nil
$768
$2,442
($5,742)
Nil
($66,816)
$212,454
$800 (4 trips)
Nil
($2,305)
$59,294
-
-
-
-
$347,412
($6,542)
Nil
($69,121)
$271,748
$5,019,312
($441,542)
($522,000)
($1,573,177)
$2,482,592
(2)
D. Subtotal per Turbine E. Subtotal per 87 Turbines II. Transformers/Miscellaneous A. Turbine Transformer 1. Sheet Steel 2. Core Steel 3. Core Copper 4. Oil
7.48 tons 3.1 tons 1.6 tons 1.6 tons
D. Miscellaneous (in above Section I) E. Subtotal per 87 Turbines III. Total Salvage Value
$0.26/#
(9)
1.15 tons
B. Subtotal per 87 Turbines C. Master Primary Transformer (MPT)
6.3 tons
$285,012 120 tons
(10)
$62,400 $0.26/# -
Decommissioning Costs Table 3 Non-Metal Disposal Costs Item
Amount
1.
Blades
20 tons
2.
Nacelle Non-Metal
12 tons
3.
Transformer and Transmission Oils
500 gal
4. 5.
Landfill Dumping Cost
Trucking
Cost To Load
$200 (1 trip)
$51.00 3/day (Crew B-10-U)
$900
(
$5,542.50
$1,452.60 (Crew Q-20)
$200 (1 trip)
$51.00 3/day (Crew B-10-U)
$450
$2,153.60
$1,200 = 12 barrels @ $100/barrel
$50.00
Nil
$450
$1,700.00
Cost per Turbine
$7,024.10
$450
$102
$1,800
$9,376.10
Cost for 87 Turbines
$611,097
$39,150
$8,874
$156,600
$815,721
Lee County landfill charge at $900 per 20 ton load
Site Process Cost $4,371.50/3 blades (Crew B-7)
Total Cost
Decommissioning Costs Table 4- Foundation Removal and Land Reclamation
Decommissioning Costs
Table 5 --Road Removal Costs
Decommissioning Risk Future Labor Cost Escalation Scrap Market Value Changes Landfill Disposal Costs Land Acquisition Costs Landfill Regulation Changes Heavy Equipment Rental Costs Fuel Costs
Presentation to Lee County Zoning Board of Appeals On Behalf of Local Landowners and Hamilton Township Tom Hewson John Stamberg P.E. Principal Energy Ventures Analysis Inc Arlington Virginia 703-276-8900 November 27, 2011
