The Nexus of Brownfield Redevelopment and Renewable Energy Generation

By Chad Farrell of Encore Redevelopment, February 2009

The real estate industry commonly refers to the importance of identifying the “highest and best use” of a property. This is especially significant in brownfield redevelopment projects, where the end use of the redeveloped property must generate significant return on investment to justify the time, risk and expense of cleaning up existing contamination. 

Recently, apprehension regarding the health of the traditional real estate market has become coupled with concerns related to environmental impacts from traditional methods of energy production, dependence on foreign-based fossil fuels, and the public’s desire for clean sources of energy.  As such, consideration of the “highest and best use” of brownfield sites is beginning to include contemplation of renewable energy generation facilities as a part of any redevelopment scenario.  Reasons supporting the nexus between renewable energy generation and brownfields redevelopment include:

• The need to increase electricity production by upwards of 30% by 2030 in the U.S. to meet growing demand.  For reference, it is estimated that this increase in demand is the equivalent of 320 mid-sized coal-fired power plants (1).

• Wind, solar and biomass facilities currently supply approximately 2.3% of our nation’s electricity.  However, renewable energy production is expected to increase by more than 70% by 2030 (2).

• Brownfields and abandoned mining sites often offer the large swaths of land required to site utility and community-scale renewable energy facilities.  This land is often controlled by a single or limited number of owners, easing the acquisition process.

• Brownfields and abandoned mine sites offer locations where the presence of solar, wind and biomass structures are often less likely to be met with aesthetic opposition.

• Brownfield sites are often located in previously developed areas, with existing power transmission lines, critical infrastructure and favorable zoning.

• There are approximately 480,000 sites and almost 15 million acres of EPA-tracked contaminated or potential contaminated properties across the United States (3).

• Finally, the redevelopment of brownfields for renewable energy facilities reduces the pressure on undeveloped lands (“greenfields”) for such facilities.

Whether renewable energy production facilities are the singular end use of a brownfield redevelopment or a component of an overall reuse scenario, consideration of their potential benefit on deals should not be overlooked.

In order to be of assistance in these endeavors, the U.S. EPA has recently launched an initiative to encourage and facilitate the redevelopment of contaminated property for renewable energy generation.  The program is being overseen by the EPA’s Office of Solid Waste and Emergency Response (OSWER) and is called Siting Renewable Energy on Contaminated Lands and Mining Sites.  For more information regarding this program, please visit www.epa.gov/oswer/ocpa.

(1) U.S. Department of Energy, Energy Information Administration. Annual Energy Outlook 2008. (www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf)

(2) Ibid

(3) U.S. EPA OSWER. Draft Cross-Program Revitalization Measures Report, 2008.