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First Danish ruling on who owns the wind

By Torgny Møller, publisher of the Danish magazine Naturlig Energi


Naturlig Energi, Vol. 33, No. 6, www.naturlig-energi.dk

Translated and published following agreement with Torgny Møller, June 2011.


Who owns the wind?

Are wind turbine owners entitled to compensation if new turbines are likely to interfere with the wind reaching an existing turbine? Or is a neighbor entitled to compensation if new turbines use wind passing over their property before it reaches the turbines? In short: Who owns the wind?

First Danish ruling on who owns the wind…

Loss of access to wind can be recoverable


A wind turbine co-operative with three turbines in the Danish Rebild municipality faces a loss of DKK 700,000 (US$134,400) because two new wind turbines “shadow” the wind and reduce power production from the existing turbines. While such losses are eligible for compensation, says a new ruling from a Danish valuation authority, the fact that the co-operative was fully aware of and accepted the risk when the three existing turbines were installed means the co-operative is not entitled to receive compensation.

The ruling is the first of its kind on the question of compensation for lost power production when the installation of new wind turbines affects wind flows to existing turbines.

The valuation authority’s basic acceptance that the losses can be compensated has specific interest for owners of existing turbines who were unaware of plans for later installation of new turbines.

In the current case, though, the municipality’s 2008 plans included five turbines and the 2009 zoning plan for the area included up to five turbines. The first three turbines were installed by the co-operative in the summer of 2010.

If two new turbines are installed, the three existing turbines will suffer an annual production loss of approximately 200,000 kWh, says an appraisal performed by Dr. Jur. Søren M. Mørup and realtor Frank Elf in conjunction with EMD International A/S. EMD calculated the turbine value to be DKK 61 million (equivalent to US$11.9 million) at the time of appraisal.

The co-operative argued that it incurred an expenditure of DKK 20 million (US$3.9 million) for the dismantling of old turbines at the site, which was the municipality's condition for granting permission to repower the site. The appraisers found this irrelevant to the case.

The owner of the two new turbines concurred with the principles EMD used for the calculation of production losses, but considered the value of the existing turbines to be only DKK 52-55 million (US$10.2-10.8 million).

Valuation authorities agreed that installation of the two new turbines will lead to production losses for the three existing turbines at an estimated DKK 700,000 (approximately US$ 134,400). The losses exceed 1% of the turbines' value, which is the statutory minimum for compensation.

Since, according to VE-loven (renewable energy act), compensation can be reduced or canceled due to the applicant's participation, the appraisers elaborated on the existence of a "participation, which includes both fault and acceptance of risk.” The appraisers believe several facts indicate that, by 2008, it was clear that it was feasible to install five turbines in the area and that the last two turbines could be installed at a later date than the first three.

The five turbines were included in local planning documents, which formed the basis for installation of the first three turbines in 2010. As a result, the appraisers said, the owner of the first three turbines “had to take into consideration a very significant risk” that two additional turbines would be installed.

"The loss of value in this case therefore relate to an investment that was made at a time when the owner was aware of a very significant risk additional turbines would be installed with a possible negative effect to the invested turbine value,” the ruling said.

“Under these circumstances, the valuation authorities conclude the co-operative is not entitled to receive compensation for power production loss.”


The valuation authority’s ruling cannot be appealed, but the claimants, if they disagree, can sue the owner of the new turbines.

 

 
 
 

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