Renewing decommissioned solar and wind projects is set to increase annual installations and improve project economics and affordability, according to analysis by Wood Mackenzie.
The consultancy’s latest report forecasts that more than 2.5 TW of solar and wind projects worldwide will reach their end of design life by 2040.
Site owners must then choose between upgrading existing equipment or decommissioning the plant by removing end of life infrastructure. Decommissioning can pave the way for installing new equipment at the same time, a process often known as repowering, which may reflect more than 20 years of technological innovation since the original build.
Wood Mackenzie’s analysis explains that wind decommissioning is already happening as the wind industry began rapid deployment earlier than the solar industry. However by 2040, solar will have a larger ageing fleet, defined as equipment older than 20 years.
An owner’s decision to decommission solar or wind equipment and install new equipment involves weighing up the net present value of investing in extending the existing project’s lifespan against completely repowering the asset, the report says.
While there are several ways to repower solar and wind, Wood Mackenzie says the most common is the full decommissioning of the original project and the installation of new modules or turbines on the same site, while retaining some of the associated infrastructure.
Decommissioning is expected to drive 23% of solar buildout and 44% of wind buildout in the 2040s, according to figures from the report.
Wood Mackenzie predicts repowering will hit the countries that were early adopters of renewables disproportionately, with decommissioning driving more than 70% of installations in Europe’s established markets in the 2040s, while new markets in Asia could see as little as 1%.
Repowering will also ensure solar and wind remain a growth business for equipment suppliers, the report continues.
Wood Mackenzie notes that global solar and wind capacity will decline this year and says this would continue without repowering, due to factors including slumping policy report, grid integration issues and high levels of decarbonisation in more mature markets.
While annual net additions of solar and wind are expected to decrease gradually through 2050, Wood Mackenzie forecasts that actual equipment sales in 2050 will be more than 60% higher than in 2026 due to the need to replace ageing equipment.
The report says this points towards a new chapter in the energy transition, which it refers to as energy renewal, that is set to drive increased renewables investment for decades.
“In the 2040s, we forecast the rate of growth in global power demand to slow, but solar and wind installations to increase because of decommissioning,” the report says. “In fact, we are expecting the era of renewal to lead to more installations than ever before.”
The report emphasises that this shift should be influencing policy decisions made today.
“If they do not, governments will miss their targets, suppliers will fail to gear up for future demand and owners will overestimate future power prices and potentially miss out on current opportunities,” the report concludes.
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