Dive Brief:
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Wind developers plan to add some 6.5-7.5 GW of energy to the grid through repowering projects in 2024. That means 2024 could tie 2019 for the most repowering projects in a single year, according to Scott Wilmot, vice president of power and renewables intelligence for Enverus Intelligence Research.
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With developers showing decreased interest in new-build wind projects, repowering could account for nearly half of all new wind additions to the grid in 2024, Wilmot said.
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Unlike the 2019 record, which was driven by a handful of large repowering projects, this year's peak seems to be the result of a broader industry trend, Wilmot said.
Dive Insight:
Wind developers are turning to repowering as a potential source of returns amid rising capital costs, according to analysis from Enverus Intelligence Research.
Wind installations on the whole have declined over the last few years as a result of rising costs and limited interconnection opportunities, among other issues, Wilmot said. But repowering may represent an increasingly lucrative opportunity, particularly for wind farms that are 12 years old or older, he said.
Advances in wind turbine technology mean replacing outdated equipment with new equipment could boost a wind project's output by some 10%, Wilmot said. Factor in degradation from aging materials, and you could add another 5% to a wind farm's productivity. That means repowering could add 10-20% more capacity to the average wind installation built in 2012 or earlier, he said.
Repowering might also cost 50-80% less than building a new installation from scratch, Wilmot said, because developers can use the existing roads and, critically, an existing grid interconnection.
“Regardless of where you are trying to connect, the queues have gotten busier, the duration spent in the queues has got longer, and the percentage of successful projects ... is lower than 10%,” Wilmot said.
But it's not just the cost that is driving developers toward more repowering projects. There's also ample earnings potential, Wilmot said. Repowered wind farms can take advantage of the ten-year extension of tax credits for the production of renewable energy, and they may also benefit from rising prices for wind-based power purchase agreements.
And there's no reason to believe this will be a short-term trend, given the large number of existing wind farms that could benefit from repowering, Wilmot said. Brookfield Renewable Partners, he noted, recently acquired Duke Energy's unregulated renewable assets, at least some of which will need to be repowered. Avangrid and NextEra also have some 3 GW of older, under-performing wind farms that could be upgraded, Wilmot said.
“You just look at the nature of the existing wind fleet. It is older, and as time passes more and more repowering opportunities become available,” he said. “I think [repowering] is here to stay, especially in the near-to-medium term.”
