Decommissioning Risk Factors

A number of articles related to the Canadian Cowley Ridge wind project note a decommissioning risk factor that isn’t often as obvious as something like turbines and wind resource — but it may be the most important factor to consider.

While the articles note an inability to source parts for the 23-year-old Kenetech turbines, they also note market issues (in addition to safety issues).

After the expiration of its PPA, the project began selling merchant, but apparently that revenue isn’t sufficient to overcome the O&M costs and safety issues.

The fact of this merchant project being decommissioned (and not repowered, even though the resource is noted to be good) is worth noting, especially if thinking about the growing number of US merchant projects and projects with short-term PPAs that may some day become merchant projects. Policy changes (e.g. elimination or restructuring of an RPS) and/or low gas prices would seem to present an enhanced decommissioning risk for these projects, and therefore would also impact the value of the related wind leases.

http://www.windaction.org/posts/44545-cowley-ridge-wind-farm-to-be-decommissioned#.Vv6ekvkrKM8

http://www.transalta.com/newsroom/feature-articles/2016-03-14/end-era-cowley-ridge-decommissioned