A leading independent property consultancy with expertise covering a broad spectrum of property related services

When turbines go wrong

Putting up a wind turbine can be great way to generate additional income from land, but first it’s important to consider what could go wrong, as Mike Reid observes.

Many landowners have constructed single wind turbines on their land and entered into operation and maintenance (O&M) agreements for this equipment. 

Most turbines work well but some are problematic. Design flaws can cause problems but once the issue has been identified and an appropriate resolution found, it is hopefully no more than an inconvenience of cost to have it resolved. But what happens when a more major challenge arises?

We know of one landowner who erected three 50Kw wind turbines, one of which developed a fault which required the generator to be rewound. The O&M company confirmed the turbine manufacturer would be able to rewind the generator but this would be at considerable cost and a potential time scale from dismantling to re-erecting of up to six months as it would need to be shipped abroad for the work to be done. 

The landowner managed to source an alternative UK company direct that could rewind the generator for approximately 50% of the cost and with a six-week turnaround period. The UK manufacturer was commissioned to rewind the generator and the work completed. Unfortunately, when the rewound generator was installed the problem immediately recurred, and the generator needed to be rewound again for the same cost as previously. 

There was now a potential contractual issue as the O&M company hadn’t arranged the rewinding but had taken down and then refitted the generator after the works took place. They denied any responsibility for the fault as did the UK company that had done the rewinding. 

Proving liability in this situation would be very difficult and, with neither company considering they were at fault, this could have turned into a complicated and expensive legal battle. All the while further income was being lost from the broken turbine. Was there a problem with the rewinding, was the generator damaged during installation or was there an underlying problem with the turbine which was causing the generator to fail?

Rather than stalling matters trying to work out the liability, the decision was made to have the generator rewound again by the same team with additional safeguards in place.  This time when the work was completed the turbine worked successfully. The turbine is now back generating income for the farmer but the costs have been higher than anticipated, although not too much in excess of the original quote, taking into account the proposed timescale for the work to be done. 

In another instance, a single wind turbine was erected and then due to a contractual dispute has never been commissioned or generated any power since, leaving a number of parties out of pocket. Further, the commissioning date under the Feed-in Tariff was missed, resulting in a far less viable project, should the contractual dispute ever be resolved. 

Contract law is a complicated area but it is important to know who you are contracting with, establishing what each party is expected to do and ensuring there are no gaps in the chain of responsibility.