Meeting with Elsie Blundell 30th May 2025 – Decommissioning

11 June 2025, categories: Consultation, News, Politics

Decommissioning issues concerning the proposed Scout Moor 2 Windfarm

Decommissioning a windfarm especially a large one requires a very clear definition of exactly what will be removed, what might be left behind e.g. concrete bases, access routes, cabling and included in that definition is how the land will be restored to its previous appropriate use and condition. The aim being to ensure the residents of Rochdale and Rossendale are totally protected both from any financial liability arising from decommissioning the windfarm or having to live with the consequences of a blighted landscape at the end of the lifetime of the windfarm.

This aim is totally independent of whether one supports or objects to the proposed Scout Moor 2 Windfarm. I wish to express my thanks to Elsie Blundell MP who contacted Cubico regarding the issue of a decommissioning bond and received the enclosed response of 25th April 2025. I now wish to expand on two specific areas, firstly, what you might call the financial landscape in which decommissioning a large windfarm occurs and secondly, some unpacking of Cubico’s response to that enquiry dated 25th April 2025.

1 The financial landscape -the rules governing decommissioning onshore are different from offshore-

and as a result, Rochdale and Rossendale residents are at more risk financially and it could be said that they will effectively underwrite the decommissioning of the development. Furthermore, as decommissioning is effectively construction in reverse these costs will be expected to be of a similar order of magnitude as the commissioning costs. Reason: – In offshore developments it is recognised by the Government that taxpayer’s money is at risk if companies operating windfarms do not keep funds in their companies to decommission, so they are legally obligated to do so and there is a statutory decommissioning scheme (1)

In onshore developments there is no such legal requirement- unless the law is changed. (2) Indeed, David Davis MP attempted unsuccessfully to do that in 2015. (3) So the following scenario is set up – build a windfarm with guaranteed income over X years – sell it on in the early years while maintenance is low – sell it on in later years before the prospect looms of the liability of decommissioning -the new company owning it then either is a shell company with no assets in UK or goes into liquidation when the matter of decommissioning arises.

As they have no money to decommission there is no point in civil legal proceedings being pursued against them as this is both expensive and there are no assets to recover, to both fund the decommissioning or indeed recover the legal expenses involved in doing so. If there is a landowner, again if they have no funds or insufficient funds to meet this liability, then civil action against them will fail for the same reason. So, if this decommissioning has been secured by a planning condition, enforcement even if it takes place and ultimately legal action will fail to recover any funds.

If the abandoned, redundant turbines are on land with public access, then the risk to the public needs to be assessed and mitigated by the Councils so potentially a blighted and one might say contaminated landscape is the result. David Davis MP raised this very matter in House of Commons in 2015 and proposed a Mandatory Liability Cover Bill to guard against this, it never passed into law. (4) It is my understanding that no MP or Government has dealt with this matter – so it remains unchanged.

2 Unpacking Cubico’s response to the issue of a decommissioning bond -contained in the email 25th April 2025.

Firstly, Cubico in their current form will not be the operators of the proposed windfarm when this liability occurs as they are up for sale. So, no matter what good intentions the company may have, they are not the company who will operate the windfarm at the time of the liability of decommissioning. And as they correctly state – this liability rests with the operator at that time -and that company is unknown.

Changes in ownership of windfarms are not unexpected; indeed, Scout Moor Windfarm was built for Peel Windpower Ltd and was subsequently sold to MEAG, an asset management company based in Germany who did operate it until earlier this year. It has now been sold it to another company – Engie. So given the scenario I outlined a decommissioning bond would not be intended to be a -last resort safety net -as Cubico state in their email but it would constitute the only real “fit for purpose” financial guarantee to achieve the stated aim.

Secondly, Cubico mention bank guarantees and insurance backed bonds to provide a decommissioning bond. So, although these mechanisms may work for Cubico at this time they are not transferable to subsequent and currently unknown future operators and therefore are totally unsecure and not fit for the purpose. Cubico mentions an escrow account to provide such a decommissioning bond and provided the funds held there are sufficient for decommissioning and restoration this could be “fit for purpose”.

It is my understanding that such an escrow account would be held by a third party e.g. major bank on behalf of the Councils with funds provided by the operator of the windfarm and funds remain there throughout the duration of the windfarm. This would need to be set up in advance of any construction being permitted and for the total estimated costs of decommissioning and restoration and be subject to regular review as suggested by Cubico. This mechanism would provide a real tangible financial guarantee of funds for the Councils when the liability of decommissioning arises.

Thirdly, the example given by Cubico of Viking Wind Farm in Shetland where a decommissioning bond has been secured through an irrevocable standby letter of credit in favour of Shetland Islands Council. This is an example of an effective joint ownership of a windfarm by SSE and a company set up on behalf of Shetland Islands Council and so is not relevant here. (5) As far as I am aware Rochdale and Rossendale do not intend to enter into an agreement to part own the proposed Scout Moor 2 windfarm and to be operators of it.

So, in conclusion, a decommissioning bond sufficient to cover all the costs of decommissioning and restoration of the land is required before the project commences. And I have sought to show that it can only be in the form of an Escrow account held by a third party with sufficient funds. This is the only way to ensure that residents of Rochdale and Rossendale – some of whom will be your constituents are protected from the future financial liabilities that will arise from decommission and restoration.

The concerns that I bring to you are that

1 if my understanding is correct – there is still a gap in the current legislation allowing onshore windfarms to operate without holding funds to cover decommissioning liabilities and other liabilities. Is it possible to remedy this situation by an appropriate robust piece of legislation? And can you do this by introducing a private members bill? This would go some way to protect other communities from largely unexpected and potentially huge financial liabilities.
2 Again if my understanding is correct – are Councillors who sit on Planning Committees and Planning Departments themselves aware of these risks so that it appropriately informs their decision making? Furthermore, would you reach out to them to so ensure that this is brought to their attention,
3 Could you reach out to Cubico to clarify their understanding of what exactly will be involved in decommissioning and restoration – so that an appropriately sized bond is held?

Anne McKown

References

Reply from Cubico

Cubico is fully committed to ensuring that financial responsibility for decommissioning sits squarely with the project, with no risk of cost ever falling to the public. A decommissioning bond, or equivalent financial guarantee, is a standard and expected part of the planning process for wind energy projects of this scale. These arrangements are normally secured through a planning condition, and are designed to provide a ring-fenced financial safety net in case of default or failure to decommission at the end of the project’s life. Importantly, decommissioning bonds are intended as a last-resort safety net. The legal obligation to decommission and restore the site rests with the project operator. The bond would only be drawn upon if, at the end of the wind farm’s operational life (or in the unlikely event of early abandonment), the operator fails to fulfil those obligations. In that case, the local authority would be able to call on the bond to fund the necessary works. In practice, this means that:

No development can begin until a bond is in place, typically in the form of a bank guarantee, insurance-backed bond, or escrow account, all subject to approval by the local planning authority.
The bond amount is based on an independently assessed decommissioning and site restoration cost, reviewed and verified by a chartered surveyor or similar professional.
The bond is reviewed at regular intervals (usually every five years) to ensure it remains sufficient, accounting for inflation and any changes in scope.
It remains in place for the full operational life of the wind farm and can be called upon by the council if the operator fails to decommission the site properly at the end of its life.

As an example of how this is handled elsewhere, the Viking Wind Farm in Shetland has recently secured a £40 million decommissioning bond through an irrevocable standby letter of credit in favour of Shetland Islands Council. This shows the kind of secure and transparent approach that’s becoming standard across the industry. To illustrate what this typically looks like in planning terms, here is a sample of a condition that has been used on other UK projects:

4. Financial Bond
(a) At least one month prior to commencement of development, the developer will provide the Planning Authority with written details of the bond or other financial provision proposed to cover all decommissioning and site restoration costs. This will be accompanied by confirmation from a Chartered Surveyor (approved by the Planning Authority) that the proposed amount is sufficient to meet the full estimated costs, including all professional fees.
(b) No development shall commence until the Planning Authority confirms that the proposed financial provision is acceptable and documentary evidence is provided.
(c) The financial provision shall be maintained throughout the lifetime of the consent.
(d) The value and adequacy of the provision will be subject to independent review every five years, funded by the developer.

We would expect a very similar condition and structure to apply at Scout Moor II, secured through agreement with Rossendale and Rochdale Councils. This is entirely standard and reflects national best practice.