This month’s cover story illuminates the growing trend of partial repowering, an issue that has taken center stage among wind developers. Written by DNV GL’s Kevin Smith and Alex Byrne, the article takes a critical look at repowering – the action that calls for the replacement of older turbines with newer, more efficient models. Repowering aging assets creates an opportunity to realize substantial returns from increased annual energy production, while also deploying significantly less capital than would be required for a new project.
The trend is being fueled by advanced turbine technology and data. In short, we know more about our project assets now than ever before. And when the ultimate goal is to wring as much output from the asset as possible, such data is powerful.
Repowering is not a new idea, to be sure. However, the idea is now being applied to projects whose wind turbines are not old. For example, I spoke with one developer that asserts that the turbine technology has become so advanced that the company can justify replacing a fleet of Gamesa 850 kW machines with more powerful, more efficient Vestas turbines.
The other aspect that is fueling the repowering push is the recent extension of the production tax credit (PTC). Although the PTC has traditionally applied to new installations, its four-year extension, passed in 2015, has incentivized a number of asset owners to consider repowering or retrofitting existing wind power assets. In theory, the asset owners are doing so in order to re-qualify projects under PTC eligibility guidance from the Internal Revenue Service so that they receive another 10 years of tax credits.[adleft zone=’190′]
But before you jump in, be careful, warn the authors. For starters, repowering a project and increasing generating capacity will result in having to renegotiate the power purchase agreement. Therefore, prices will likely go down. Finally, the authors suggest that the loading history of the turbine must be reviewed to estimate the amount of remaining life in the structure. That said, rebuilding or increasing the capacity of an existing foundation is very challenging and could reduce economic benefits.
Finally, the authors give another note of warning: It’s important that obtaining tax credits does not become the main driver for repowering projects, as the blind pursuit of PTC eligibility could result in higher project costs.