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Is Nedpower's Mt Storm project in financial jeopardy?
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In electing to purchase turbines from Gamesa in Spain for the Mt Storm project has Nedpower sown its own seeds of demise for the ill-fated mountain top project?
The US dollar is now 1.35 to the Euro. This means that the $280M originally planned for turbine purchase now requires another $100M! Will Shell Oil pay the $380M knowning they will never recover those costs? Seems highly unlikely Shell Oil executives will do that.
Next – what happens if they install fewer turbines than planned? Will the US government still pay the full $300M subsidy, or will that be prorated or cancelled?
Similarly – now it is revealed that Gamesa is supplying the turbines direct from Spain – the whole argument of providing US jobs in West Virginia is gone! Will the Republicans risk election fall-out in 2008 from continuing to fund the project? Seems this would be a surefire vote loser – sending $280M of taxpayer money to Spain.
To make matters worse, the law suit against Nedpower is now headed back to court, and their prospects look grim. Illegal turbine sitings, massive damage to miles of State roads and emerging evidence of environmental impacts are all set to make the court case a huge pitfall with significant costs and major delays. Not to mention those Spanish turbines are going to make it very tough go keep local support.
Nedpower and Shell Oil are clearly hesitating. Unfinished turbines litter the mountain top. Construction teams have been furloughed for two weeks, with no firm word when work will resume. Expensive construction cranes sit idle, further adding to project costs. The long term parts and maintenance from Spain to the remote harsh mountain environment looks tenuous and expensive. The extreme conditions in winter are bound to cause continuous equipment failures.
The state of West Virginia needs to step in and demand answers from Nedpower. First, their destruction of five miles of state road needs to be paid for. Next clarification of the Spanish turbine purchase, how many turbines are they now planning to install? And then last but not least, the illegally sited turbines that are in breach of federal siting requirements – when will they be removed or relocated?
Shell Oil executives should rightly be very nervous, and the state executives should be monitoring the situation to ensure the State is not left with a massive clean-up operation if Shell Oil pulls out aburptly.
posted by DRRW
5 July 2007
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