More than two-thirds of countries have state requirements for closing late-stage renewable energy projects, according to a new report released today by the law firm Luis Roca. Report, “State Requirements for Closing Last-Stage Renewable Energy Projectsis a legal analysis that summarizes and evaluates state-by-state renewable energy retirement requirements.
Utility-scale wind and solar projects were first developed in the United States in the early 1980s. After more than 40 years, early generation renewable projects are beginning to reach the end of their useful lives. This report outlines current legal and/or regulatory provisions regarding decommissioning requirements for each party involved in the construction and operation of wind or solar energy facilities, including landlords, lessees, local governments and state governments. It also details common decommissioning requirements set out in state statutes and ordinances.
“In recent years, state legislatures have recognized the need for formal rules and regulations in an industry that has grown exponentially over the past 40 years and have begun to impose specific decommissioning requirements on existing and new renewable energy projects,” said Tom Daugherty, partner at Luis Roca, co-leader of the company’s Renewable Energy End-Planning Group and co-author of the report. “It is important that industry participants are aware of existing and upcoming regulatory requirements to ensure that they avoid costly failures while reaping the full potential benefits of end-of-life planning.”
State and local government experience in the oil and gas industry informs aspects of their approach to renewable energy end-of-life and decommissioning regulations. Countries have consistently expressed an interest in ensuring that project applicants have effective and accountable project decommissioning plans, reasonable estimates of costs associated with decommissioning, and the financial capacity to implement decommissioning plans.
“While some states focus solely on financial guarantee requirements to ensure end-of-life obligations are funded, others also mandate specific regulatory standards for decommissioning efforts,” said Dietrich Hofner, a partner at Luis Roca, co-leader of the company’s renewable energy final planning group, and co-author of the report. “Some states are requiring detailed decommissioning plans, some require government oversight and approval of decommissioning efforts, and some are focused on landfill.”
Key findings and statistics included in the report include:
- Common decommissioning requirements imposed by states include:
- Develop (and update) decommissioning plans.
- Land restoration requirements.and
- Warranty obligations to ensure decommissioning payments.
- Of the 36 states for which information on laws, pending laws and regulations dealing with decommissioning is available, are:
- Twenty countries have decommissioning bills that mention solar and wind.
- Nine countries have enacted decommissioning bills that only mention solar power.
- Four countries have enacted decommissioning bills that only mention wind power.and
- Three states either don’t specifically mention wind or solar, have pending bills, or allow counties to work on the subject.
- Iowa and Kansas, which are among the top 10 renewable energy producers, have no decommissioning laws.
News article from Luis Roca