In the absence of new subsidies, we could be looking at the beginning of the end for the wind industry in Europe.
New academic research on whether to repower or extend the lifetime of an obsolescent wind farm in Europe reveals that without new subsidies for repowered sites, low cost lifetime extensions focused on maximising return before decommissioning are more probable, with a potential to affect about half the wind turbine fleet in Germany, Spain and Denmark. In the absence of new subsidies, we could be looking at the beginning of the end for the wind industry in Europe.
In March this year the renewables policy cheerleaders, the Energy and Climate Intelligence Unit (ECIU), which is predominantly funded by the European Climate Foundation and the Grantham Foundation, published a study, Repower to the People, claiming that the UK could and should repower some sixty onshore wind farms over the next five years and so gain a net increase in capacity of more than 1.3 GW. The paper did not examine the underlying economics and policy context of decisions to repower, and relied simply on the reader’s naïve enthusiasm for technological progress when confronted with the fact that, for example, contemporary turbines are two to three times the capacity (2–3 MW) of the previous generation (< 1 MW), with the latest models approaching 4 MW. Bigger must surely be better, especially given the obvious economies:
As well as offering simplicities and potentially lower costs compared with developing a new site, repowering is also logical given that many of the earliest wind farms are in locations that have the best wind resource. (Repower to the People, p. 4.)
Sympathetic MPs were produced to provide quotations in the press suggesting that it was simply a question of government removing the obstacles to this commonsense development, with Mr Simon Clarke, the Conservative Party’s MP for Middlesborough South and East Cleveland, being reported as observing that:
For those worried about the 1 per cent of UK gas imports that come from Mr Putin, these upgrades would also reduce our reliance on imported fuel by the equivalent of two gas-fired power stations; and if we don’t allow developers to repower them, we may lose them for good. (Utility Week, 27.03.18)
There is of course nothing to stop developers repowering such sites, except that: 1 there are no subsidies available, and without such subsidies the low market prices probable over the next decade are insufficient to motivate re-investment.
Furthermore, the owners seeking to repower would have to apply for a new planning consent, which would be problematic now that the unneighbourliness of large wind turbines is notorious. Indeed, as the authors of a new and important academic survey of repowering and lifetime extension, report, the state of Bavaria has even “introduced in 2014 a regulation that sets a new minimum distance of ten times the tip-height between a wind turbine and the closest residential areas” (L. Ziegler et al. “Lifetime extension of onshore wind turbines: a review covering Germany Spain, Denmark, and the UK, Renewable and Sustainable Energy Reviews82 (2018), 1261–1271). A modern machine can be upwards of 120 metres (nearly 400 feet) to tip, so this implies a separation of over three quarters of a mile, and would rule out many existing onshore wind farms in the UK, particularly in England, where at present there is no formally required separation distance.
Indeed, contrary to the “simplicities” urged on us by the ECIU, the work published by Ziegler and her colleagues, who write from a position of fundamental sympathy for the wind industry, makes it clear that the decision facing owners of ageing wind farms is extremely difficult, except to decommission. Repowering is by no means a simple matter:
Sites with existing wind farms are often impossible to repower due to lack of availability of the site, legal consent, changes in subsidies, environmental protection, public acceptance, or insufficient wind conditions. (p. 1265)
The landowner may no longer want a wind farm; and even if they are willing, new legal permission may not be easy to obtain; subsidies are insufficient or non-existent; the larger wind turbines may breach environmental regulations; the neighbours may not welcome bigger or any wind turbines; and, interestingly, the wind conditions may now be known to be unsuitable or have become so due to the adjacent location of other wind farms (see See Ziegler et al. Table 4, p. 1269).
In fact, these authors report that the principal “favourable legal and economic conditions for repowering” are “proﬁtable subsidy schemes” and a “scarcity of sites”. In the UK there are no subsidies available, and so long as the Scottish government is prepared to continue granting planning consents against vigorous protests, there will be no shortage of alternative sites in the United Kingdom. The ECIU’s proposed major repowering over the UK as a whole is a complete non-starter. Moreover, this is no parochial matter. As Ziegler et al. show, repowering is an unattractive option throughout Europe, since “no political repowering subsidies exist in Germany, Spain, Denmark, and the UK”.
Instead, wind farm owners will be looking at the possibility of extending the lifetimes of their existing wind farms. But this is itself by no means an easy option, and requires careful assessment of the condition and performance of the existing asset to determine the Remaining Useful Lifetime (RUL) of the major components, and, crucially, “whether operational costs are balanced by revenues for the produced energy”. Most of that latter anxiety is focused on the future market price for the electricity produced, and not on the operational costs, since as the authors report on the basis of a number of industry interviews:
Uncertainty about future failure rates was not a major consideration of operators. Since lifetime extension requires only low investments, a common approach is terminate turbine operation if costly repairs become necessary. (p. 1268.)
None of this sounds like the behaviour of a vigorous and expanding industry. Indeed, it seems more likely to be the skilful management of the death spiral, ensuring that owners extract as much as possible from investments made under the existing policy instruments before they exit to enjoy their winnings.
This is a situation that could develop very rapidly. Ziegler et al. report that in 2016 some 12% of the installed wind turbine capacity was older than 15 years, a share that will increase to 28% by 2020 (p. 1261). The UK, as a relative latecomer to this enthusiasm, will be below the average, with only 10% of its current capacity older than 15 years in that year, but in other countries, as the authors themselves admit, the “future age distribution of installed wind capacity almost looks dramatic”:
By 2020, 41% of the currently installed capacity in Germany will be over 15 years old, 44% in Spain, and 57% in Denmark.
If this is not repowered, and the evidence presented in this paper suggests strongly that without new subsidies owners will prefer to focus their attention on short-run lifetime extensions, we will be looking at the beginning of the end of the wind industry in Europe.