Production Tax Credit Extension Boosts the Repowering of Wind Facilities

Sargent & Lundy’s wind repowering project expertise featured in Megawatt Daily news article

Extension of the production tax credit into 2021 has spurred growth in wind repowering projects, which qualify for the financial benefits while allowing project owners to increase Eric Soderlundthe annual energy production of their facilities. Eric Soderlund, a vice president of Sargent & Lundy’s consulting business, comments on PTC and its impact on repower projects in a recent article, Wind repowering efforts get boost from PTC extension, desire to increase capacity factor, published by Megawatt Daily. In it, he discusses Sargent & Lundy’s support for recent repowering efforts and details the additional benefits repowering brings to the industry. Read the full article below.

Wind repowering efforts get boost from PTC extension, desire to increase capacity factor
Jeffrey Ryser
Published with permission from Megawatt Daily

  • Repowering price runs $880-$1,030/kW
  • Sargent & Lund has assessed 7.6 GW of repowerings
  • GE working on a turbine with 40-year lifespan

With 60,000 wind turbines with presumed lifespans of 20 years now generating almost 110 GW of power in the US, keeping those turbines up to date and improving their capacity factors has become a growing part of the wind power supply business, with repowering now costing between $880/kW and $1,030/kW.

A primary driver behind the decision to repower a project still has to do with the 60% production tax credit that at the end of 2019 was extended to 2021. Since a repowered project can take advantage of the 10-year tax credits, the PTC extension has increased appetite for re-powering solutions for existing projects, companies have argued. Prior to the extension, projects had limited time to take advantage of the PTC.

“Wind projects are now eligible to receive the 60% PTC when they repower through 2024,” Chris Brown, a Vestas executive, said earlier this year.

“The extended timeline allows projects installed in the 2011-2015 time frame to more fully consider repowering options with 60% PTC and the latest Vestas technology — that’s an addressable market of over 30 GW,” he said.

“In this way the PTC extension not only powers new project development but existing projects as well.”

Working as the wind project owner’s engineer or as an independent engineer in support of those financing a wind project, Sargent & Lundy has “supported 65 wind repowering projects since 2017,” said the Chicago-based company’s vice president Eric Soderlund in an interview Sept. 1. “We believe those projects represent the majority of wind projects repowered during that period.”

Soderlund said the repowering projects his firm has worked on had a total of 4,500 turbines and a capacity of 7.6 GW.

According to Soderlund, another key reason behind repowering is to improve a wind farm facility’s annual energy production so that its capacity factor goes up. In some cases, this can be achieved by replacing the turbine’s rotor, “which will help improve the difference between capacity and the AEP.”

He said some of the earlier repowerings his firm assessed were merchant projects in the Electric Reliability Council of Texas market that had no power purchase agreements and were looking to lower expenses and improve its annual energy production and thus its capacity factor.

NextEra’s $250 million promise

During its second-quarter 2020 earnings presentation to analysts, NextEra Energy Resources, one of the largest wind project developers in the US, said it has contracts signed in 2019 and 2020 to repower 2.5 GW of wind power, with the company saying that approximately 2 GW of those repowerings will take place by 2022.

Among the repowerings completed by NextEra Energy Resources are the four wind farms in Iowa that will now supply 360-MW of replacement power to Alliant Energy’s utility subsidiary Interstate Power & Light following the closure of the Duane Arnold Nuclear Power Station. NextEra told IPL in November 2018 that it would spend $250 million to repower four of its own wind facilities in Iowa to replace IPL’s lost power.

The repowering of NextEra Energy Resources’ 100-MW Endeavor Wind and its 50-MW Endeavor Wind II facilities in Osceola County, as well its 150-MW Crystal Lake facility in Hancock County and the 66-MW Crystal Lake III facility in Winnebago County, has been completed. The Endeavor Wind facility, which was commissioned in 2008, had its 2.5-MW Clipper Liberty turbine nacelles replaced with 2.5-MW GE nacelles.

GE repowered turbines sales rise

NextEra said that since the facility was built there has been “significant enhancements” in turbine technology, including not only longer blades and but also updated gearboxes The leading manufacturer of wind turbines for the US power market, GE, said in May 2019 that it had repowered more than 4 GW of wind power at 36 wind farms since 2017 and expected to repower a further 3 GW of capacity at 25 wind farms by the end of 2020.

In its Q2 2020 earnings report, GE said it had sales of repowered turbines of 576 in the first half of the year compared to 337 in the first half of 2019, an increase of 199 repowered units.

Also in May 2019, GE announced it was working to develop a turbine that would have a 40-year lifespan, rather than the typical 20-years.

The company has argued that a longer-life turbine would help lower the levelized cost of wind power.


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