✍🏻 Guest post: IntelStor CEO Philip Totaro offers this Market Minute on how the wind production tax credit is fueling repowering projects.
The Wind Production Tax Credit (PTC) in the USA has been a powerful tool for asset owners to ensure the favorable financial health of their projects. To date, more than 75% of the 138GW of operational capacity in the United States has taken advantage of the PTC. So, the expiration of the PTC for a project site after 10 years can necessarily dent the otherwise healthy financial returns for a wind asset owner.
The industry has developed a clever solution to this challenge: we have seen a significant uptick in asset repowering in the US since 2017. This attempts to extend the benefit gained from the PTC bonus for an additional 10 years by swapping out the blades or refurbishing the entire nacelle and re-qualifying the project for a new 10-year cycle of PTC payments.
To date, a total of 102 individual project phases have been repowered in the US, with 11.2GW worth of repowered capacity installed. This replaces a total of 5,855 wind turbines with the latest and greatest models.
IntelStor, December 5, 2022
By the end of 2022, the USA will have close to 47GW of operational wind energy capacity that is at least 10 years old. Asset performance degradation over time due to mechanical wear and tear as well as other factors goes hand in hand with an aging fleet.
However, operational data suggests asset owners are deliberately running their turbines outside of normal design parameters in order to generate as much revenue from the PTC as they can before dismantling the old unit and putting up a fresh one after the first 10 years of the asset life once the PTC has expired.
This has created a whole new operating dynamic, and a very different path to asset profitability for owners and operators. Stay tuned for more…
Thanks to IntelStor CEO Philip Totaro for providing this Market Minute and insight into PTC Wind Farming. To read the full research note and many more, subscribe to IntelStor’s Research Notes or contact them for a demonstration.
As turbines age they become more susceptible to lightning damage. StrikeTape protects aging turbines, before and after repowering projects, increasing AEP and ROI. Find out how StrikeTape can extend the life of your blades: Download the spec sheet and test data here.
🎧 Listen to learn more 🎧 We’ve discussed repowering wind farms in several recent episodes of the Uptime Wind Energy Podcast. Josh Rangel of Rangel Renewables offered some great information on how the wind production tax credit is driving repowering (and other wind projects) in this interview.
