Issue Brief: End-Of-Life Challenges Facing Renewable Energy Facilities
The first wind and solar farms in the United States were built in 1980 and 1982, respectively. The United States built the world’s very first wind farm, which was capable of producing only 600 kWh of electricity, while the first solar farm in the U.S. could produce only 1 MW of electricity.
Over the past 40 years, the US has aggressively researched, invested in, and installed renewable capacity to the point where the US has 102.8 GW of installed solar capacity and 118 GW of installed wind capacity. This represents over 550,000 acres of solar installations and 67,000 individual wind turbines in the United States. These remarkable numbers continue to grow and are driving down carbon emissions and providing cleaner power generation.
Now that US solar and wind industries have matured, they have turned their attention to addressing issues associated with the lifecycle of industrial materials used in construction, significant land use, and other natural resource use.
One of the most pressing issues facing these industries is finding a long-term solution for solar panels and turbine blades that have reached the end of their useful life. While significant public, industry, and government attention is being paid to the decommissioning of fossil-fueled power plants as the nation shifts toward clean energy production, decommissioning issues are not unique to traditional power plants. Just like a coal, gas, or nuclear plant, renewable projects must be decommissioned or repowered with new, more efficient equipment.
Solar and wind energy facilities provide numerous benefits to the environment, but they also contain materials that are toxic, do not decompose, or are not recyclable. For example, typical solar panels contain toxic substances and heavy metals, such as cadmium telluride, copper indium selenide, silicon tetrachloride, cadmium gallium (di)selenide, copper indium gallium (di)selenide, hexafluoroethane, lead, and polyvinyl fluoride. Wind turbines and blades contain materials such as Bisphenol A, resin, BPAs, and fiberglass that do not readily decompose or recycle—if at all.
On the positive side, solar panels and wind turbines contain substantial quantities of critical and rare earth minerals that, if recovered, represent a potential revenue stream and make renewable power renewable in more ways than one.
Numerous developers, utilities, research groups, and universities are seeking to solve these issues through material science, land use, recycling solutions, and more. State legislative bodies are also beginning to impose decommissioning requirements for existing renewable facilities and bonding requirements to ensure the decommissioning of future facilities. While certain entities are making headway, solutions are still maturing.
The issue of what to do with solar panels, wind turbines, and other associated equipment and facilities at the end of their useful life will continue to require critical thinking and robust problem solving from numerous disciplines including engineers, land use professionals, material scientists—and lawyers.
Successfully tackling the legal issues associated with used renewable energy generation products will require a thoughtful, concerted strategy that combines a good offense with a good defense. Renewable energy developers and project owners will face numerous legal issues over the next several decades that include:
- Proactive allocation of project decommissioning responsibilities and liabilities in contracts and power purchase agreements. While significant attention is often paid to ensuring that renewable projects reach commercial operation, terms regarding decommissioning and end-of-life concerns are frequently less clear. Decommissioning and end-of-life costs and revenues should be clearly allocated in project agreements.
- Compliance with existing and new utility, environmental, and other regulatory requirements. State legislatures, utility commissions, environmental regulators, and federal land management agencies are all paying increasing attention to issues related to end-of-life issues including decommissioning, repowering, redevelopment, and abandonment as first-generation renewable projects reach the end of their useful lives.
- Working with state and federal legislators and regulators to ensure that the industry is allowed to solve this problem with government assistance, not overreach. New legislation and regulations being considered to address these issues may create substantial new bonding requirements, environmental review processes, and community involvement mandates.
- Land use approvals and acquisition of real estate for storing, disposing of, or recycling decommissioned renewable energy generation materials and equipment. The materials-handling requirements that will flow from deconstruction of renewables facilities will likely require new solid- and hazardous-waste facilities as well as recycling facilities to be sited, permitted, and built. Infrastructure for handling materials that will ultimately be processed overseas will also be necessary.
- Establishing new corporate divisions, subsidiary companies, joint ventures, or contractual relationships with third parties to handle, transport, and dispose of used renewable assets. The corporate form created to address end-of-life renewable materials will hold operations, employment, regulatory, liability, and tax implications.
- Helping universities, nonprofits, and companies who are researching and developing recycling and disposal technologies to develop and protect their scientific processes in a way that avoids conflicts and maximizes commercial potential.
- Forming new corporate divisions, subsidiary companies, joint ventures, or contractual relationships to solve business transactions, intellectual property, litigation, or regulatory and legislative issues related to repowering or decommissioning renewable energy projects.
Lewis Roca is uniquely positioned to help renewable energy developers and project owners develop and install an effective offense and defense to ensure that companies are not exposed to avoidable risk. Our lawyers are poised to help you achieve your legal and government objectives with a multidisciplinary approach that includes expertise from the following practice areas:
- Business Transactions
- Real Estate
- Legislative and Regulatory Affairs
- Environmental and Regulatory Compliance
- Intellectual Property