By 2030 half of all UK wind farms will be over 20 years old. Not only will the wind turbines have reached the end of their design life after 20 years, but the projects’ leases, planning permission and other contracts will have been structured around this 20 year period.
The owners of aging wind farms have a range of end-of-life options. The default position will be to dismantle the installation, remediate the site and to restore it to its former use.
However, as these early projects reach the end of their design life their current owners may wish to extract some additional value from them by:
- Allowing them to continue running for as long as the equipment lasts
- Extending the life of the installation by fitting new key components into the existing equipment
- Dismantling and replacing the old equipment
As far as leases, planning permissions, grid connections, off-take agreements and maintenance contracts (the “Project Documents”) are concerned, many of the same considerations will arise whether a project owner opts for an extension of life, repowering, or developing a new project.
However, there are some practical advantages to extending a project’s life or repowering it when compared to developing a project at a new site:
1) The wind resources at the site of an existing project will be well known
2) The grid connection will be in place and the original environmental assessments for the project may provide the basis for faster assessment of the extended or repowered project
3) There is less likely to be resistance from the nearby community to an existing wind farm
Wind farm leases do not generally contain options to extend them so extensions will need to be agreed the landowner.
Also, unlike most planning permission in England and Wales, planning permission for a wind farm includes a standard condition that means it expires after a fixed time, after which the project must be decommissioned.
An owner who only seeks to extend the life of a project (with no change to the equipment on site) may be able to do so by postponing the expiry of planning permission through a variation to the conditions which govern expiry.
Where the economics of repowering are such that it would be worthwhile to replace the existing wind turbines with more powerful newer models before the end of their 20 year design life, there will be additional considerations to those mentioned above if the project benefits from subsidies, if there are long-term contracts or existing project finance in place.
Many operating wind farms will, in due course, benefit from life extension or repowering.
The difference between success and failure could come down to starting the process of assessing what changes are required to the Project Documents early enough to ensure that the owner does not run out of time in getting replacements agreed before the existing contracts expire and the decommissioning obligations contained in the project’s planning permission come into force.