Decommissioning Agreement
Gridlync land and infrastructure glossary.
A decommissioning agreement sets the obligation to remove equipment and restore the land at the end of a project’s life, often backed by a bond or financial assurance. It is common in wind, solar, and energy leases. It obligates the operator to dismantle equipment, remove foundations to a set depth, and restore the land, usually secured by a bond, letter of credit, or escrow sized to the estimated cost. The financial assurance protects the landowner if the operator defaults or goes bankrupt.
Decommissioning obligations and bonds sit inside long-term leases and are easy to lose track of. Gridlync keeps each obligation tied to its lease and timeline.
Example
Under its lease with the Sorensen ranch, Northfield Wind posts a $250,000 decommissioning bond per turbine and agrees to remove the towers, pull foundations to 4 feet, and reseed the land within a year of shutdown.