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The benefits to be gained by early end-of-life and repowering planning for your renewable assets

by RES | Jan 01, 2020 | Reading time: 3 min

RES has been supporting many of our clients with end-of-life strategies for their renewable assets – both repowering and life extension – and has seen first-hand the numerous benefits of starting this process early.

Our experience shows that every project is unique and the decision to either life extend and/or repower is highly project specific, driven by the site’s constraints and economics.

We explore the various options for our clients via an initial ‘Options Report’ in which we review market context (permitting rules and tariff context) and project constraints (technical, legal and economic). This enables us to provide an exhaustive list of recommendations and determine which option will provide the best return on investment (ROI) which will in turn be used to devise the overall end-of-life strategy and determine when applications must be submitted.

Extending operational life
In the UK and Ireland, we have found that life extension has been the preferred option for many clients, predominantly due to some older existing assets still benefitting from Renewable Obligation Certificates (ROCs) until 2027.

What’s more, for investors, this option also immediately increases the value of their portfolio. For instance, earlier this year one of our clients saw the value of their portfolio increase by tens of millions by extending the asset life of their wind and solar portfolios. For investors, the earlier asset lives are extended, the sooner the value of the portfolio can be increased.

In addition, by starting the life extension process early, the existing wind farm may be considered to form part of the environmental baseline against which the future application will be assessed. This may reduce the time and cost spend on the planning application. Similarly, securing lease extensions can be a much easier process.

Repowering your site
In France we are finding that repowering has been more beneficial and the preferred option for clients, mainly due to recent regulatory changes and the eligibility of repowering projects to bid into a renewable support auction tender, as well as the fact that technology is advancing at such a fast pace, thus providing a better ROI.

We are currently in the process of repowering Souleilla-Corbières Wind Farm, situated in Southern France. This was the very first wind farm to be built by RES in France and whilst this site can only undergo minor changes due to meteorological radar proximity, a change in design through the repowering strategy means that we are improving the installed capacity by 15%. When projects can accommodate a tip height increase, repowering is a very economical option to increase the asset’s net present value (NPV) and we are currently working on 10 projects with this profile.

In addition, our experience has shown that having a strategy in place and acting early when repowering enables a seamless transition from the original project to the repowering project. For instance, originally commissioned in 2001, Souleilla-Corbières Wind Farm secured capacity for repowering in France’s second onshore wind tender in 2018 and continues to export renewable power to the grid whilst financing is secured.

Optimising your operational strategy
In all cases, the end-of-life strategy that you select is fundamental to your operational strategy and ensuring you get the most from your assets. For instance, knowing that you are extending the life of an asset will help decisions on the value of component replacements or upgrades to benefit from technology advances and could influence the optimal timing for such works.

When it comes to wind assets, the SCADA system, blades, drive train, convertor systems and general structure will all have differing maintenance strategies depending on the remaining life of the asset, particularly where upgrades are an option. Looking beyond the turbines, the remaining operational life of your wind farm will also affect decisions on the maintenance of the civil and electrical infrastructure of your wind farm.

But it’s not just wind assets that this is applicable to. When it comes to solar projects, the inverters, SCADA, PV modules, framework, even cabling, will all have a different maintenance strategy depending on how many target years remain.

Knowing whether you plan to extend the life of your assets, repower them, or a combination of the two, allows you to tailor your maintenance strategies and align it to your longer-term strategies. Further still, deciding on your long-term plan early is key to getting the best ROI and potentially minimising cost. After all, as the old saying goes the early bird catches the worm.

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