Repowering needs planners to loosen up

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Richard Heap
September 14, 2015
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This content is from our archive. Some formatting or links may be broken.
Repowering needs planners to loosen up

Imagine you are a shopping centre owner. You want to grow your business by building a new centre, but you are finding it impossible to secure government support. What now?

Most established landlords would redouble their efforts to generate extra revenue from existing centres. It could mean looking at new ways to retain tenants and attract new ones; or investing in a maintenance plan to keep customers shopping there. But whatever the approach, the idea is the same. If you cannot build anew then try to grow your returns from existing assets.

We expect wind investors to embrace this idea in the near future.

As it gets harder for developers to build new wind projects in some established markets, including the UK, the US and Australia, they will focus more on asset management, and especially repowering. Installing more efficient turbines is a good way to boost returns.

It is a topic that came up in a Q&A with Bryan Grinham, managing director of northern Europe for manufacturer Nordex, during our Quarterly Drinks evening on Thursday.

He said repowering was currently only a significant opportunity in Denmark and Germany as they have long-established wind markets, but it is a trend that will grow elsewhere too.

At present, Grinham said owners would look at repowering after a project has been running for 13 or 14 years, which assumes a typical life cycle of around 20 years.

However, in our view, it may also make sense for developers in countries with anti-wind governments to look at repowering earlier than that as part of their asset management strategies. If they are unable to gain support for building on new sites then it would make sense to look to increase energy from sites they already have.

For developers this will not be a substitute to building new schemes, maybe overseas and in emerging markets, but good asset management could help their bottom lines.

The challenge here is that replacing turbines only makes the best financial sense in cases where owners can win variations to existing planning consents.

He said: “Just to change a 90m rotor diameter turbine for another 90m rotor diameter turbine doesn’t do much to improve your electricity yield, but if permits change so you can swap that 90m diameter to 110m on a taller tower then repowering makes sense.”

Securing those changes relies on sympathetic politicians but, if a country is hostile to new builds, then it could well be hostile to revamps of schemes with taller turbines too.

In the UK, for example, the highest a turbine can go is 125 metres. If owners — and the country as a whole — are going to gain much from a repowering then they would need to go much higher than that. In Finland, turbines are allowed to go up to 220 metres, which means even on a slow wind day they produce far more power than a 125-metre rival.

Grinham estimated developers could gain 25%-30% more energy if they could install turbines 100 metres taller. That would make a big difference to the energy generated from wind farms and could be a vital part of a sensible long-term asset management strategy.

Whether governments allow such major changes is another matter.

Imagine you are a shopping centre owner. You want to grow your business by building a new centre, but you are finding it impossible to secure government support. What now?

Most established landlords would redouble their efforts to generate extra revenue from existing centres. It could mean looking at new ways to retain tenants and attract new ones; or investing in a maintenance plan to keep customers shopping there. But whatever the approach, the idea is the same. If you cannot build anew then try to grow your returns from existing assets.

We expect wind investors to embrace this idea in the near future.

As it gets harder for developers to build new wind projects in some established markets, including the UK, the US and Australia, they will focus more on asset management, and especially repowering. Installing more efficient turbines is a good way to boost returns.

It is a topic that came up in a Q&A with Bryan Grinham, managing director of northern Europe for manufacturer Nordex, during our Quarterly Drinks evening on Thursday.

He said repowering was currently only a significant opportunity in Denmark and Germany as they have long-established wind markets, but it is a trend that will grow elsewhere too.

At present, Grinham said owners would look at repowering after a project has been running for 13 or 14 years, which assumes a typical life cycle of around 20 years.

However, in our view, it may also make sense for developers in countries with anti-wind governments to look at repowering earlier than that as part of their asset management strategies. If they are unable to gain support for building on new sites then it would make sense to look to increase energy from sites they already have.

For developers this will not be a substitute to building new schemes, maybe overseas and in emerging markets, but good asset management could help their bottom lines.

The challenge here is that replacing turbines only makes the best financial sense in cases where owners can win variations to existing planning consents.

He said: “Just to change a 90m rotor diameter turbine for another 90m rotor diameter turbine doesn’t do much to improve your electricity yield, but if permits change so you can swap that 90m diameter to 110m on a taller tower then repowering makes sense.”

Securing those changes relies on sympathetic politicians but, if a country is hostile to new builds, then it could well be hostile to revamps of schemes with taller turbines too.

In the UK, for example, the highest a turbine can go is 125 metres. If owners — and the country as a whole — are going to gain much from a repowering then they would need to go much higher than that. In Finland, turbines are allowed to go up to 220 metres, which means even on a slow wind day they produce far more power than a 125-metre rival.

Grinham estimated developers could gain 25%-30% more energy if they could install turbines 100 metres taller. That would make a big difference to the energy generated from wind farms and could be a vital part of a sensible long-term asset management strategy.

Whether governments allow such major changes is another matter.

Imagine you are a shopping centre owner. You want to grow your business by building a new centre, but you are finding it impossible to secure government support. What now?

Most established landlords would redouble their efforts to generate extra revenue from existing centres. It could mean looking at new ways to retain tenants and attract new ones; or investing in a maintenance plan to keep customers shopping there. But whatever the approach, the idea is the same. If you cannot build anew then try to grow your returns from existing assets.

We expect wind investors to embrace this idea in the near future.

As it gets harder for developers to build new wind projects in some established markets, including the UK, the US and Australia, they will focus more on asset management, and especially repowering. Installing more efficient turbines is a good way to boost returns.

It is a topic that came up in a Q&A with Bryan Grinham, managing director of northern Europe for manufacturer Nordex, during our Quarterly Drinks evening on Thursday.

He said repowering was currently only a significant opportunity in Denmark and Germany as they have long-established wind markets, but it is a trend that will grow elsewhere too.

At present, Grinham said owners would look at repowering after a project has been running for 13 or 14 years, which assumes a typical life cycle of around 20 years.

However, in our view, it may also make sense for developers in countries with anti-wind governments to look at repowering earlier than that as part of their asset management strategies. If they are unable to gain support for building on new sites then it would make sense to look to increase energy from sites they already have.

For developers this will not be a substitute to building new schemes, maybe overseas and in emerging markets, but good asset management could help their bottom lines.

The challenge here is that replacing turbines only makes the best financial sense in cases where owners can win variations to existing planning consents.

He said: “Just to change a 90m rotor diameter turbine for another 90m rotor diameter turbine doesn’t do much to improve your electricity yield, but if permits change so you can swap that 90m diameter to 110m on a taller tower then repowering makes sense.”

Securing those changes relies on sympathetic politicians but, if a country is hostile to new builds, then it could well be hostile to revamps of schemes with taller turbines too.

In the UK, for example, the highest a turbine can go is 125 metres. If owners — and the country as a whole — are going to gain much from a repowering then they would need to go much higher than that. In Finland, turbines are allowed to go up to 220 metres, which means even on a slow wind day they produce far more power than a 125-metre rival.

Grinham estimated developers could gain 25%-30% more energy if they could install turbines 100 metres taller. That would make a big difference to the energy generated from wind farms and could be a vital part of a sensible long-term asset management strategy.

Whether governments allow such major changes is another matter.

Imagine you are a shopping centre owner. You want to grow your business by building a new centre, but you are finding it impossible to secure government support. What now?

Most established landlords would redouble their efforts to generate extra revenue from existing centres. It could mean looking at new ways to retain tenants and attract new ones; or investing in a maintenance plan to keep customers shopping there. But whatever the approach, the idea is the same. If you cannot build anew then try to grow your returns from existing assets.

We expect wind investors to embrace this idea in the near future.

As it gets harder for developers to build new wind projects in some established markets, including the UK, the US and Australia, they will focus more on asset management, and especially repowering. Installing more efficient turbines is a good way to boost returns.

It is a topic that came up in a Q&A with Bryan Grinham, managing director of northern Europe for manufacturer Nordex, during our Quarterly Drinks evening on Thursday.

He said repowering was currently only a significant opportunity in Denmark and Germany as they have long-established wind markets, but it is a trend that will grow elsewhere too.

At present, Grinham said owners would look at repowering after a project has been running for 13 or 14 years, which assumes a typical life cycle of around 20 years.

However, in our view, it may also make sense for developers in countries with anti-wind governments to look at repowering earlier than that as part of their asset management strategies. If they are unable to gain support for building on new sites then it would make sense to look to increase energy from sites they already have.

For developers this will not be a substitute to building new schemes, maybe overseas and in emerging markets, but good asset management could help their bottom lines.

The challenge here is that replacing turbines only makes the best financial sense in cases where owners can win variations to existing planning consents.

He said: “Just to change a 90m rotor diameter turbine for another 90m rotor diameter turbine doesn’t do much to improve your electricity yield, but if permits change so you can swap that 90m diameter to 110m on a taller tower then repowering makes sense.”

Securing those changes relies on sympathetic politicians but, if a country is hostile to new builds, then it could well be hostile to revamps of schemes with taller turbines too.

In the UK, for example, the highest a turbine can go is 125 metres. If owners — and the country as a whole — are going to gain much from a repowering then they would need to go much higher than that. In Finland, turbines are allowed to go up to 220 metres, which means even on a slow wind day they produce far more power than a 125-metre rival.

Grinham estimated developers could gain 25%-30% more energy if they could install turbines 100 metres taller. That would make a big difference to the energy generated from wind farms and could be a vital part of a sensible long-term asset management strategy.

Whether governments allow such major changes is another matter.

Imagine you are a shopping centre owner. You want to grow your business by building a new centre, but you are finding it impossible to secure government support. What now?

Most established landlords would redouble their efforts to generate extra revenue from existing centres. It could mean looking at new ways to retain tenants and attract new ones; or investing in a maintenance plan to keep customers shopping there. But whatever the approach, the idea is the same. If you cannot build anew then try to grow your returns from existing assets.

We expect wind investors to embrace this idea in the near future.

As it gets harder for developers to build new wind projects in some established markets, including the UK, the US and Australia, they will focus more on asset management, and especially repowering. Installing more efficient turbines is a good way to boost returns.

It is a topic that came up in a Q&A with Bryan Grinham, managing director of northern Europe for manufacturer Nordex, during our Quarterly Drinks evening on Thursday.

He said repowering was currently only a significant opportunity in Denmark and Germany as they have long-established wind markets, but it is a trend that will grow elsewhere too.

At present, Grinham said owners would look at repowering after a project has been running for 13 or 14 years, which assumes a typical life cycle of around 20 years.

However, in our view, it may also make sense for developers in countries with anti-wind governments to look at repowering earlier than that as part of their asset management strategies. If they are unable to gain support for building on new sites then it would make sense to look to increase energy from sites they already have.

For developers this will not be a substitute to building new schemes, maybe overseas and in emerging markets, but good asset management could help their bottom lines.

The challenge here is that replacing turbines only makes the best financial sense in cases where owners can win variations to existing planning consents.

He said: “Just to change a 90m rotor diameter turbine for another 90m rotor diameter turbine doesn’t do much to improve your electricity yield, but if permits change so you can swap that 90m diameter to 110m on a taller tower then repowering makes sense.”

Securing those changes relies on sympathetic politicians but, if a country is hostile to new builds, then it could well be hostile to revamps of schemes with taller turbines too.

In the UK, for example, the highest a turbine can go is 125 metres. If owners — and the country as a whole — are going to gain much from a repowering then they would need to go much higher than that. In Finland, turbines are allowed to go up to 220 metres, which means even on a slow wind day they produce far more power than a 125-metre rival.

Grinham estimated developers could gain 25%-30% more energy if they could install turbines 100 metres taller. That would make a big difference to the energy generated from wind farms and could be a vital part of a sensible long-term asset management strategy.

Whether governments allow such major changes is another matter.

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Full archive access is available to members only

Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.