James Lawson, Contributor
June 17, 2013 | 2 Comments
Manchester, UK -- By 2020, swapping aging wind turbines with more powerful modern units will have raised annual electricity generation at refurbished sites from 1524 GWh to 8221 GWh. A 2 MW wind turbine coming off the production line with a rotor diameter of 80 metres can generate four to six times as much electricity as the 1 GWh annual yield of a 500 kW wind turbine with a 40 metre rotor built in 1995. This is the fundamental thinking behind wind repowering.
Replacing old machines with fewer, larger and taller modern units that are quieter, far more reliable and capable of producing vastly more electricity is an activity that has increased significantly during the last five years, according to GlobalData's 2012 report Wind Repowering. The report says the value of the world's repowering market will grow massively in the next five years. In 2011 wind farms producing around 183 GWh annually were replaced with turbines capable of generating 774 GWh. But by 2020, repowering will drive an increase in annual power generation at repowered sites from 1524 GWh to 8221 GWh.
“Fifteen years ago many countries had just started installing wind turbines but Germany, Denmark, the U.S. and the Netherlands already had a decent amount of wind capacity,” says Prasad Tanikella, GlobalData senior analyst. These wind energy pioneers are now at the forefront of the repowering movement. And, as their onshore fleets age, Spain, Italy, Portugal, India and the UK are becoming repowering hot spots too.
“There's no doubt it's a vital and growing market, and the chief driver is the vast improvement in turbine technology over the last 20 years,” says Aris Karcanias, managing consultant with Navigant's BTM Consult. “Replacing old technology with new turbines can raise yield by a factor of two or more, depending on a multitude of factors.”
The term “repowering” comes from the fossil fuel sector, where it describes the complete or partial replacement of items like boilers, turbines and generators to improve output and efficiency, bring down emissions and reduce operating costs. Leaving emissions aside, wind repowering has similar goals.
With manufacturers' warranty periods typically lasting between eight and 20 years, the desire to avoid potentially expensive repairs is a big motivation for replacing turbines that may still be working perfectly well. Reliability drops dramatically with age and any scarcity of spares also drives up O&M costs. As well as the far greater income from increased generation, modern turbines fail far less often than their predecessors, some past failures occurring even with new units.
Modern turbines also tend to run much more slowly and quietly than their smaller ancestors, turning at 10-20 rpm instead of 40-60 rpm, so they have fewer issues with shadowing and bird mortality. A 2010 study by the Alameda County Avian Protection Program at the Diablo Winds repowering project in Altamont Pass, California found that fatality rates for new turbines were 54 percent lower for raptors and 66 percent lower for all birds compared with older-generation units operating alongside them.
Repowering also offers an opportunity to relocate turbines to better integrate them into residential areas. In the early days of wind in mainland Europe, regulations let developers build almost anywhere.
Modern turbines also have much better grid compliance, something that communities previously plagued by voltage spikes and frequency shifts will appreciate. It is worth noting that Germany made its compliance rules stricter in 2009.
Looking at the Numbers
So repowering maximises energy generation and updates a country's turbine fleet to the latest technology standards, benefitting developers and consumers alike. But like any renewable energy project, the numbers have to add up to make it viable.
“You have to look at the financial situation of the operating site now and in the coming years compared to repowering,” says Christian Schnibbe, marketing manager at consultancy WPD. “You have to develop alternative scenarios for the site, considering the effect of higher hub heights, modern turbine types and wind farm layout optimisation.”
All the costs of decommissioning old turbines and recycling their components have to be considered, as well as the temporary loss of revenue until the project is complete. Reselling the old turbines is one way to offset development costs, and there's a thriving international market in used machines.
Then there is the electricity infrastructure. If a developer raises output from 10 MW to 60 MW, it may well need upgrading. How much will that cost and will it be feasible at remote sites?
There are certainly alternatives to complete turbine replacement that will improve reliability, such as retrofitting modern control systems. There's also partial repowering, but this approach has serious limits. You can't put a 3 MW nacelle on top of a 250 kW tower. Any worthwhile increase in blade size will usually cause rapid wear in gearboxes and other rotating machinery and bearings.
“There are efforts like this going ahead, but most of the time it makes more sense to replace the whole unit,” says Karcanias.
Obtaining planning consent for taller replacement turbines is fundamental. Consent can fatally weaken the main plank of the business case if it is not forthcoming. Without the better wind resource that extra height brings, the required multiples of energy production are unlikely to materialise.
“Planning a repowered wind farm is nearly the same as planning a new project and has comparable risks,” says Schnibbe. “There is a risk it will fail the permitting process.”
Repowering doesn't make the permitting any quicker in Denmark either. “The permitting process for a repowering project takes much the same amount of time as a new project, three to four years,” says Arne Rahbek, Vattenfall's wind communication manager for Denmark.
Though not always the case, residents close to a longstanding wind farm often have a more positive attitude to replacing many old turbines with fewer modern ones.
“At Klim we had only five small objections to the repowering project,” says Rahbek, referring to his country's largest such scheme yet. “This would not have been the case in a new project.”
Repowering is frequently a catalyst for ownership change, with small wind farm owners selling out to developers. Large owners such as utilities may also sell off smaller sites where repowering would take up a disproportionate amount of management time. But changing ownership means factoring the cost of compensating old investors into the new project's finances.
“Most investors take a one-time payment that represents the theoretical future income from the old turbines, adjusted for interest,” says Ingo Sebastiani, head of repowering at Juwi. “It can be difficult to calculate the right price, and agreeing compensation with investors is always a tricky discussion.”
Just as with new projects, the electricity price and the amount of subsidy support is key in deciding whether to repower or not. It is usually not possible to take on the old farm's FiT and, with tariffs and policies differing widely between countries, developers must look closely at the market structure and any incentives.
A combination of investment-friendly subsidies and a substantial number of aging turbines have made Germany and Denmark today's leading repowering nations by a long way. In 2011 Denmark accounted for around 51.6 percent of the total global repowered capacity, ahead of Germany's 43.1 percent, according to GlobalData. Both have offered specific repowering incentives.
Denmark's first wind repowering programme ran from 2001 to 2003. Owners of turbines smaller than 100 kW were able to install three times the capacity removed and receive a bonus on top of the normal FiT for the first five years. For units of 100 kW-150 kW, owners could install twice the capacity removed and receive the same treatment. Under this programme 1480 turbines totalling 122 MW were replaced with 272 new turbines of 332 MW in sum. The second Danish repowering scheme ran from 2008-2011 and offered a premium on top of the normal tariff for replacing up to 175 MW of old turbines with new machines that had at least double the capacity.
However, one of the reasons for supporting repowering - better use of good wind sites - often did not apply. Owners of old wind farms could decommission their turbines and sell the resulting repowering certificates to other wind developers, who then applied the extra FiT to new projects elsewhere.
“You just had to show you had decommissioned old turbines somewhere in Denmark,” says Sune Strøm, chief economist at the Danish Wind Industry Association. “There was no geographical link.”
According to Strøm, the system distorted the market value of old turbines and made the cost of compensating old investors artificially high. Today there are no specific incentives for repowering in Denmark.
“The government removed the financial incentive for repowering two years ago,” says Rahbek. “This has made repowering less attractive. I can't say how much, but it has definitely influenced the decision process.”
Although Germany has edged ahead in repowered capacity, a lack of subsidy certainly hasn't killed repowering in Denmark. One recent Vattenfall project at Nørrekær Enge saw 77 old turbines replaced with 13 new 2.3 MW Siemens machines, producing more than double the power in total.
“It shows that the economic case for repowering is there without extra subsidy,” says Strøm. “It's still expensive for the developer of repowered wind farms to buy up the old turbines. Where the financial case is marginal, it can stop the project. It's rare but it happens.”
Repowering Around the World
Vattenfall is currently scheduling Denmark's biggest ever onshore repowering project at Klim. At Rejsby Hede in Southern Jutland, the developer is planning to replace 395 Vestas turbines that are 17 years old and rated at 600 kW each with 22 machines of 3 MW each. In fact, GlobalData predicts that by 2020 the Danes will be replacing 200 MW of old turbines with 1 GW of repowered capacity annually.
According to Rahbek, there are 4500 onshore turbines today in Denmark. “It's expected that the number of turbines in 2020 will be 3000,” he says. “We are ‘cleaning’ Denmark, so to speak, replacing old models with fewer but bigger turbines, and this is very positive for the environment.”
Germany's repowering boom started later than Denmark's but, with high-wind sites at a premium, repowering now makes up a larger and larger slice of its development work.
“In Germany in particular, repowering is about making better use of a limited amount of land and a limited number of good wind-speed sites,” says Karcanias. “In 2012 there was around 540 MW of repowering in Germany. That's a significant amount given a total of 2.4 GW of new installations.”
It's also a substantial jump over the 238 MW of repowered capacity that Navigant's BTM Consult quotes for 2011. Consultancy DEWI confirms these figures: 325 wind turbines totalling 196 MW were pulled down in 2012 and directly replaced by 210 turbines of 541 MW in total, confirming Germany's ousting of Denmark as the current repowering leader.
The potential is greater still. A survey in August 2012 by VDMA Power Systems showed there are 3750 turbines in operation that predate 2002 whose total capacity is about 12 GW. Germany's wind industry association BWE predicts that the annual German repowering market will grow to 1 GW over the next few years, worth around €1.5 billion in turbine sales.
Germany's 2009 and 2012 renewable energy laws encourage repowering by offering a bonus of €0.005/kWh on top of the normal FiT. Like Denmark's old scheme, the bonus is not geographically restricted, so new projects qualify as long as the same number of old wind turbines are dismantled elsewhere. Its future is looking uncertain, however, with much political discussion about freezing the FiT and stopping the repowering bonus completely.
One of the largest German projects is at Schneebergerhof in the Rhineland-Palatinate region. Here Juwi has replaced five Enercon E66 1.5 MW turbines with five 7.5 MW machines of type E126, the largest operational wind turbine in the world today. These produce more than six times the energy of the old turbines, around 20 GWh annually instead of 3 GWh.
“The repowering bonus gives you around €80,000 extra every year and about €1.6 million over 20 years,” says Sebastiani. “That's a lot of extra money that you can use to compensate the old investors.”
The U.S. comes third in the repowering rankings, with GlobalData quoting around 135 MW of repowered capacity across 2011 and 2012. Big owners like NextEra Energy and EDF are ramping up activity in California, where small capacity turbines of 25 to 30 years of age abound. According to the American Wind Energy Association, over 1500 old turbines have been repowered to date in the state.
At EDF's Shiloh IV farm in California, just 50 modern machines replaced 235 100 kW turbines for an almost four-fold power increase. Another project at Altamont Pass saw NextEra Energy replace 780 old turbines with 34 Siemens 2.3 MW machines, additionally removing 9.5 km of electrical lines and about 13 km of road. NextEra plans to replace at least 2000 turbines in the coming years.
With GlobalData predicting 9.5 GW of repowering potential by 2020, there's much more to do, but persuading smaller owners to repower will be challenging. According to IHS Research, the top 30 US wind owners account for 60 percent of capacity over 20 years old, with the remainder owned by very small companies and even individuals.
In 2008 the California Energy Commission pointed to the need for repowering incentives after finding that continuing to operate aging wind facilities was often more profitable for owners who only replaced the most worn-out machines. Other forms of renewables do get federal support, as is evident in, for example, the repowering of fossil fuel plants with biomass systems. Beyond that, there's a mix of state and federal tax breaks, with the main support still the PTC.
In India repowering is just getting started. Because of the generally poor wind resource, turbines tend to be replaced by those of a similar capacity, so there's little reason to repower anything but life-expired farms. As the fleet ages, around 100 MW of repowered capacity should be built annually by 2020.
There's no direct FiT support for repowering in the UK, and projects have so far been limited to small farms like Goonhilly Downs (5.6 MW to 12 MW), Carland Cross (6 MW to 20 MW) and the UK's first onshore site at Delabole (4 MW to 9.2 MW). But there are a growing number of repowering candidates in the UK, and this type of project is starting to become more interesting to developers. Infinergy recently repowered its site at Castle Pill in Steynton, replacing one old turbine with three new machines to take output from 0.5 MW to 3.2 MW.
“We're increasingly looking at repowering as a source of projects,” says Matt Russell, senior project manager at Infinergy. “We will be looking at repowering the UK's 1990s fleet over the next 5-10 years and are very keen to take on people's old sites.”
The message today is that repowering has hardly begun, and that its future international potential is vast. GlobalData predicts that by 2020 there will be 54.7 GW of eligible capacity, of which only 20 GW will have been replaced.
So Where Do All the Old Turbines Go?
Selling the old turbines from a repowered farm can significantly offset other project costs. Well-maintained turbines can run for many further years and the buying market is international — Vietnam, South America, Romania, Bulgaria, Poland, Turkey — with second-hand turbines sold directly by the new developers or via specialist intermediaries. Projects with certain grid or height limitations in countries like the UK are also willing buyers of pre-owned turbines.
But not all decommissioned turbines will end up being re-used and the reconditioning cost has to be compared with the eventual sale price. This market is volatile and, as more old turbines have come onto the market, so the prices on offer have fallen.
"At Schneebergerhof, we were able to sell the old 1.5 MW turbines for more than €500,000," says Sebastiani. "Today, the market is full of old turbines and we would probably only get €200,000 to €250,000. We don't normally include the selling price of the old turbine in the financial calculation. If we get a good secondhand sale price, then that's the icing on the cake."
"Prices are determined by the market and are always going up and down," says Henk Van den Bosch, managing director of Windbrokers, a Netherlands-based turbine reseller. "There are some models like Vestas V47 and V52 which are always in demand."
Van den Bosch says he is particularly interested in the more youthful turbines coming out of today's repowering boom.
"There are lots of turbines which are prematurely replaced by bigger turbines and these are typically no more than 12 years old. These are the ones that are interesting for a second life in countries where space limitations are not an issue."
James Lawson is a freelance journalist focusing on the energy sector.
Lead image: Decommissioning the Nordtank turbine at Castle Pill Farm, via Infinergy