Old Wind Farm Life Extension vs. Full Repowering: A Review of Economic Issues and a Stochastic Application for Spain

Luis M. Abadie and Nestor Goicoechea
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Luis M. Abadie: Basque Centre for Climate Change (BC3), Scientific Campus, University of the Basque Country UPV/EHU, 48940 Leioa, Spain
Nestor Goicoechea: Escuela de Ingeniería de Bilbao, Universidad del País Vasco-Euskal Herriko Unibertsitatea UPV/EHU, 48013 Bilbao, Spain

Energies, 2021, vol. 14, issue 12, 1-24

Abstract: The installation of wind power technology is growing steadily and the trend can be expected to continue if the objectives proposed by the European Commission are to be achieved. In some countries a considerable percentage of installed wind power capacity is near the end of its useful lifetime. In the case of Spain, the figure is 50% within five years. Over the last 20 years, wind energy technology has evolved considerably and the expected capacity factor has improved, thus increasing annual energy production, and capital expenditure and operational expenditure have decreased substantially. This paper studies the optimal decision under uncertainty between life extension and full repowering for a generic wind farm installed in the Iberian Peninsula when the future hourly electricity prices and the capacity factor evolve stochastically and seasonally. The results show that in economic terms, full repowering is the best option, with a net present value of €702,093 per MW installed, while reblading is the second best option. The methodology can be transferred to other specific wind farms in different electricity markets and can be used to develop national wind energy policy recommendations to achieve projected shares in the electricity mix.

Keywords: wind power; life extension; repower; capacity factor; electricity price; uncertainty (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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