By Alex Garel-Frantzen and Amy Antoniolli
Building solar and wind energy projects on potentially contaminated lands can be a golden opportunity, both effective and cost-effective, for developers. The 120-acre Reilly Tar & Chemical Corporation Superfund site was recently redeveloped with a utility-scale solar farm and is a prime example of the reuse potential inherent in thousands of Superfund sites, brownfields, retired power plants, and landfills.
Corporations continue to drive demand for sustainable energy, with 170 businesses to-date pledging to go 100 percent renewable as part of RE100. States and local governments are also establishing policies that prioritize and incentivize sustainable energy development. In Illinois, the legislature is seeking to pass two bills, the Path to 100 Act (HB 2966/SB1781) and Clean Energy Jobs Act (HB3624/SB2132), which would incentivize renewable energy development and bring the state to 100 percent renewable energy by 2050. Other states, including New York and California, have proposed or passed similar laws.
Redeveloping potentially contaminated lands offers a host of potential benefits to developers and community stakeholders:
- Better Bang for Your Buck and Time: Developers can significantly lower project costs and decrease timelines, because contaminated sites typically have existing infrastructure in place, like power lines, substations, and access roads — all of which would otherwise need to be constructed. Often, contaminated sites are also already zoned for commercial or industrial use, which means that the proposed project likely poses fewer zoning and permitting hurdles. Costs may also be lower than developments on agricultural lands or other open spaces because (1) contaminated properties cost less; (2) programs specific to the procurement of renewable energy credits from brownfield projects may be available; and (3) developers may be able to take advantage of federal and state brownfield tax incentives.
- More Support from the Community: Siting renewable energy projects on potentially contaminated lands means that agricultural lands are kept in production and open spaces are kept as is; abandoned, blighted sites are cleaned up; surrounding property values are boosted; tax revenues are increased; and energy needs will cost less. Local communities may be quicker to support the renewable energy projects as a result.
- Open Space Preservation: Large, utility-scale renewable energy facilities developed on potentially contaminated lands can help to preserve agricultural lands and other “greenspace” that may otherwise be displaced or impacted by development.
Even with all these benefits, developers often choose to build wind and solar energy systems on agricultural lands or greenspaces, and not on brownfields, because they are worried about potential liabilities or site contamination. Fear no more. Here are three strategies that developers can consider using to help quell concerns and work toward constructing successful renewable energy systems on potentially contaminated lands.
1. Evaluate Sites to See Whether They Have Renewable Energy Potential and Make Financial Sense
It’s important to take a hard look at potentially contaminated properties to determine whether they can support your renewable energy project. For example, a prospective property must have enough usable space and be close enough in proximity to transmission or distribution lines to support development.
Confirm that a site is not subject to land-use exclusions or restrictions that would prevent the use of solar or wind energy. Ensure your renewable energy project is in line with, or at least doesn’t conflict with, the community’s vision for the site. Take a look at whether the site has been assessed for contamination already. If so, review those environmental assessments and determine what remediation is needed. If not, you will need to investigate the site to see whether your project development is appropriate.
It’s also important to inspect the property for visual signs of contamination, like piles of debris or soil surface staining. Site-specific screening considerations will also vary depending on the type of contaminated property you’re assessing. For example, if you’re looking to develop a project on a landfill, you’ll need to confirm that the landfill has settled or is expected to settle uniformly.
Also key to the success of a project is choosing a site that makes financial sense. As part of this assessment, see whether the state in which you’re seeking to develop has strong policy support for renewable energy development and specific incentives. Whether you buy or lease a property, it’s important to consider whether the specific site ownership structure at play will impact the incentives available for your project, which may impact the overall cost of your renewable energy system significantly.
2. Assess and Protect Against Liability Exposure
Many prospective developers, purchasers, and lenders are concerned that redeveloping contaminated properties may subject them to liability under federal or state cleanup laws. This often won’t be the case if you do your homework on the liability protections that may be available at the site screening phase.
State cleanup programs often provide liability protections for new owners or lessees who did not contribute to the existing contamination at a site. In addition, federal environmental law generally limits your potential liability at qualifying brownfield sites, called “eligible response sites,” where a party is conducting a response action in compliance with a state cleanup response program. Lawyers with expertise in environmental law can help you assess and take advantage of the liability protections available to you, and it will be important to work with state and local governments early on in the process.
The EPA may address other contaminated properties under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The agency has published guidance to help prospective developers protect themselves against potential liability. When developers and others acquire contaminated property but did not cause the contamination, they can take advantage of various self-implementing liability protections afforded by CERCLA, like a protection for “bona fide prospective purchasers” (BFPP). Plan ahead and take the necessary steps to qualify for the BFPP protection. Among other requirements, you’ll need to engage an environmental consultant to conduct a Phase I environmental assessment to qualify for the BFPP protection.
CERCLA also offers liability protections for qualifying lessees of contaminated properties. If leasing a property is part of your plan, ask a lawyer to help you cut off any potential lessee liability concerns at the pass. You’ll also want to carefully review any proposed lease because it may try to shift liability to you.
3. Synchronize the Renewable Energy Development with Cleanup
While you can develop a renewable energy system at any stage of site cleanup, you would be well served to start your renewable energy project when the cleanup process is just getting underway. Doing so allows you to engage the governmental agency overseeing the site, community stakeholders, and other interested parties, like potentially responsible parties, from the start of a project.
You’ll also be able to coordinate and integrate renewable energy development and site cleanup decisions. For example, you might be able to fold design requirements for your renewable energy system into the remedial design, rather than being left to build your structures on top of and around the completed remedy.
Coming to the cleanup early also helps to ensure that the renewable energy project is compatible with the remedial design, engineering controls, monitoring activities, and institutional controls.
Amy Antoniolli is an environmental lawyer at Schiff Hardin with broad experience in administrative and enforcement-related issues. She advises clients on compliance with the Clean Air Act, Clean Water Act, RCRA, CERCLA, and the Illinois Environmental Protection Act. She frequently works with renewable energy clients, reviewing siting and operating requirements for wind and waste to energy facilities.
Alex Garel-Frantzen is a Schiff Hardin environmental lawyer counseling companies to ensure compliance with federal, state, and local laws; litigates land and water issues; and conducts environmental due diligence to support corporate transactions. He represents electric power utilities; gas transmission, storage and distribution companies; manufacturers; and commercial goods distribution companies.
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