DeWind Alleges Wind Farm Greenwash

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DeWind Co. (DeWind) is a vertically integrated global wind company headquartered in Germany.

One part of DeWind’s business is wind farm development, and in 2009 the company entered into an agreement with Glenmore Wind Farm, Urban Power, and Prelude by which it agreed to pay $250,000 for the exclusive right to purchase or sell the other parties’ interests in a 14 megawatt wind farm project.

DeWind did not find any buyers for the project and last month sued Glenmore, Urban, and Prelude for breach of contract.

According to the complaint (DeWind Complaint), DeWind’s inability to close a sale of the project was due to misrepresentations the defendants made about, inter alia, the project’s wind resource estimate or the defendants’ failure to complete additional development work required by the agreement.

Specifically, DeWind alleges that the defendants inflated the capacity factor/resource estimate of the wind farm:

Defendants misrepresented the Project’s wind resource estimate by representing that the project site contained a higher forecasted capacity factor than it actually did. Prior to execution of the Agreement, Defendants represented that the project site contained a net capacity factor of 31.8% in a financial deal pro forma dated May 5, 2009. However, the wind resource estimate report provided by the Defendants after execution of the Agreement stated that the project site actually had a net capacity factor of 25.8%.

This difference in net capacity factor made the project non-economical, DeWind alleges, and turned out to be a “decisive cause” of its inability to sell the project.

The complaint says the misrepresentation is a violation of the agreement, and DeWind is asking the court to award a refund of the $250,000 fee.

Although this is not a case involving allegations that would typically be called greenwashing, I believe it is properly viewed as a greenwashing case because it involves false or misleading statements about the environmental benefits of a produce or service.

The plaintiff just happens to be a large commercial consumer instead of an individual consumer, and the service is wind energy output instead of products or services sold to individual consumers.

Most discussions of greenwashing are unduly restricted to cases in which an individual consumer, a class of consumers, or a consumer watchdog such as the FTC challenges a company making false or misleading green claims about its products or services.

To put greenwashing in its proper context I think we should consider a wider range of cases, some of which are not immediately recognizable as instances of greenwashing.

To do so requires looking beyond individual consumers to commercial consumers and beyond green marketers to companies that make false or misleading claims about clean tech products and services.

From this broader vantage point, and keeping in mind the definition of greenwashing – making false or misleading claims about purportedly environmentally friendly products, services, or practices – we are able to recognize, observe and understand greenwashing in its proper context.

If DeWind’s allegations of inflating net capacity factor for a wind farm are true, those misrepresentations would be greenwashing, and anti-greenwashing legal actions such as this case are at least equally, if not more, important than the false or misleading claims directed at individual consumers.

Eric Lane is a patent attorney at Luce, Forward, Hamilton & Scripps in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at elane@luce.com.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

2 Comments

  1. I’m skeptical about DeWind’s claims. After having been involved with a project utilizing their turbines I likely wouldn’t purchase a project using their technology… even if I had the money. In my opinion, and in the opinion of many others, there is much superior technology to be tied to for 20 years or so. Also, there are not alot of DeWind turbines operating in the U.S.

    The project I was involved with came under much controversy because the turbines experienced alot of downtime.

    Capacity factor is a function of several factors. Wind speed average and proper measurement technology is one metric. Depending upon how one measured the wind, over what time period as well as comparing the reference wind data to long term (airports) data would be something that a large company with the meteorological expertise would’ve done their due diligence on.

    Wind is also characteristic of other very complicated dynamics relating to global weather patterns. In my region, and I think nationally, wind speed averages were down for an extended length of time in (with respect to long term averages, etc) which would play into the low wind speed and subsequent performance. You could verify this with AWS Truewind for the time periods in question.

    It’s pretty well known that DeWind offers up a product that is not easily financed in this country even if the capacity factor is 50%. Tax equity and debt is very selective. Perhaps it’s not entirely the available wind but the due diligence after reviewing the service network, O&M costs, project cost, etc.

    The onous would’ve been on DeWind to ensure long term wind averages and crunch the numbers. It’s how it’s done and they’re sophisticated enough to thoroughly understand that.

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