A total of 65GW of European onshore wind turbines will need upgrading or replacing by 2028, according to new research from Wood Mackenzie.
The ‘European Onshore Wind Lifetime Extension Outlook’ report finds that from 2019 to 2028, an average of 4GW of turbines a year that are reaching end-of-design-life will be what it calls “lifetime extension (LTE) suitable”.
But, while upgrading components to extend the life of a turbine – the LTE option – is cheaper than alternative options available, not all asset owners will choose to implement this solution, Wood Mackenzie said.
Wood Mackenzie principal analyst Daniel Liu said: “The decision to extend the operational lifetime of turbine assets depends on asset owner strategies, project economics and site and turbine operating conditions.
“Distributed sites – those with three or less turbines – are economically less suitable for operating beyond design lifetime with considerable refurbishment and/or upgrade work.
“Larger sites need to balance regulatory issues, financial risks, technical challenges and operational challenges to make lifetime extensions economically viable.”
The report said options available to wind farm owners to maintain the existing capacity of the European onshore wind turbine fleet include complete repowering of projects.
However, the costs of new technology, permitting issues, regulatory hurdles and asset owner resources make repowering a “daunting proposition” for many operators, it added.
LTE is an alternative to decommissioning or complete repowering, said Wood Mackenzie.
Liu said: “We have identified 42GW of turbines reaching end-of-life by 2028 that have a commercially available LTE solution.”
Wood Mackenzie added that the leading onshore wind markets in Europe – Germany, Spain, UK and France – are unlikely to meet 2020 renewable energy targets and so new regulation is needed to prevent wholesale removal of wind generation capacity.
Providing regulatory support for LTE projects is one way to preserve existing capacity, it said.
“Currently, minimal regulatory support is offered for repowered and LTE projects, forcing asset owners to operate in a merchant power market,” said Liu.
“However, the introduction of the post-2020 Renewable Energy Directive should provide clarity for asset owners to decide on whether to decommission, repower, or extend the lifetime of their onshore wind assets.”
The report added that the success of the LTE strategy requires balancing and mitigating a number of risks.
Just under half of LTE-suitable turbines are situated on small or distributed project sites.
Liu said: “Project and supply chain economics mean that small and distributed sites are less ideal candidates for extensive turbine refurbishment and component upgrades as part of the LTE solution.
“Asset owners can potentially operate these turbines beyond the original design lifetime with minimal upgrades if sufficient operating reserves remain.”
He added that LTE for onshore wind is still in its infancy and upgrade packages offered for turbine classes are not a one-size-fits-all solution either.
“It’s too early to assess the operational longevity of turbines with an implemented LTE solution,” Liu said.
“More sophisticated and complex refurbishment, upgrade and operations packages will increase the post end-of-life operational lifetime but need to be balanced against costs.”
He said that depending on the level of retrofits and upgrades performed on a turbine, LTE solutions can be costly.
Older turbines also require higher maintenance spending as the risk of capital component failures rise, the analyst said.
“Insurers will price the risk of running older turbines past design-lifetimes, which could see premiums rise,” he added.
Such costs must be weighed up against the revenues in a merchant power market, Wood Mackenzie said.
Energy trading or corporate power purchase agreements could be implemented to provide cash flow security, it said.
Liu said: “Capital component failures remain the biggest operational risk and can be costly enough to eliminate the economic impact of running lifetime extended assets.
“Supply of spare parts may also be a concern for less popular technologies or from defunct OEMs.”