Wind farm compensation claims undermine their investment potential.

I don’t make many recommendations on investments, but when something comes along that has clear effects, I sometimes do. I am not a financial adviser, and you aren’t paying for my advice, so I make my argument as a futurist and you make your own decision whether to take it on board or not. I take no responsibility for your financial decision, though please feel free to pass on any credit.

I have often advised against anything other than very short term investment in the green industry, and still do. It is volatile at best, with many bankruptcies already, and shows especially poor long term prospects as the poor quality science underpinning it is shown up for what it is – often worthless and counter-productive. This time it is even clearer to me. Avoid investing in wind farms, even more than yesterday.  Here’s why.

Finally there is a proper peer-reviewed scientific study proving what most people suspected already, that wind farms cause health problems and depression in people living near them. Easy-to-read summary of the key bits in the Telegraph: http://www.telegraph.co.uk/earth/energy/windpower/9653429/Wind-farm-noise-does-harm-sleep-and-health-say-scientists.html

The study’s finding were about sleep loss and increased depression, both of which were found to be much greater in communities close to wind turbines. However, these are both known to cause other serious health problems and reduce life expectancy. Suicide links with depression too, so there may also be a measurable impact on suicide rate near wind farms, another study waiting to be done. If as has been proven, wind farms cause loss of sleep and depression, it is therefore reasonable to expect a scientific study to prove a link between wind farms and serious health problems and even early death or suicide.

Separately, the industry has tried to bury and misrepresent the conclusions of a previous proper study that showed their negative effects on house prices. The results however remain valid, there is a proven effect. Erecting a wind farm lowers nearby property values.

Where people have their health or their financial state damaged by a company, and in this case often both, it surely can’t be long before class action suits follow for damages. Once the courts and claim companies get past dealing with the PPI mis-selling compensation claims, there will likely be another swathe based on loss of house value and damage to health attributed to proximity to wind farms.

What is less clear is whether the taxpayer will have to fork out instead. Since the proof of damage is recent, earlier ones could be except from reasonable blame. Since the farms have been commissioned by government, government might be considered to blame and the farm owners and manufacturers only liable for extras caused by specific circumstances or specific designs. Those who recommended, commissioned, housed, built and ran the farms, and who received all the financial benefits even in full knowledge of the harm they were causing, can be expected to deny any wrongdoing and to try to shift blame to avoid  facing the consequences. The taxpayer might well have to pick up much of the bill for damage done in spite of protesting loudly and being ignored all along. However, it will be a brave investor who ignores the risk that justice might actually work against the guilty parties. Justice happens sometimes.

My conclusion is simple: wind farms are now proven to cause damage to property value and health and large compensation claims are likely to follow sometime. Further scientific studies are likely to add weight to the evidence, making compensation payouts highly likely, and there is no provision for this in the tariff guarantees. In the extreme, farms could even be forced to close, eradicating future income (and related production-related tariffs) while leaving the up-front costs and there is no certainty that government will compensate farms for the loss. These prospects therefore obviously damage the value of investments in wind farms.