Germany has long been a pioneer in the field of renewable energy, generating a record 78 percent of its power consumption from renewables in July of this year. In fact, Germany is one of the very few countries in the world that is actually struggling with too much renewable energy. The latest testimony to this fact is the new issue of decommissioning its old wind farms.
2011 was a turning point for the European giant as it started moving away from nuclear energy (post Japan’s Fukushima nuclear disaster) and began to replace it with renewables. However, wind energy made its foray in Germany well before 2011. Germany started building wind turbines in the mid-1990s and now there are almost 25,000 wind turbines in the country.
However, the problem now is that a large number of the 25,000 odd turbines have become too old. Close to 7,000 of those turbines will complete more than 15 years of operation by next year. Although these turbines can continue running, with some minor repairs and modifications, the question is whether it makes any economic sense to maintain them? Related: Winners And Losers Of Iran’s Return To The Oil And Gas Markets
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Image source: TriplePundit.com
Efficiency is the key
Beyond a period of 20 years, the guaranteed tariffs that are set for wind power are terminated, thereby making them unprofitable. “Today, there are entirely different technologies than there were a decade ago. The performance of the turbines have multiplied, the turbines are also more efficient than before”, said Dirk Briese of market research company called Wind- Research. It therefore makes sense to replace old turbines with newer ones. However, it is not very easy to dismantle an existing turbine and, while there are companies like PSM that specialize in dismantling of wind turbines, the costs of decommissioning can run upwards of $33,500 per turbine.
Decommissioning wind turbines: a growing problem?
The process of decommissioning a wind farm is a complicated one as it requires at least two 150 ton cranes which are used to dismantle the turbines, tower houses, rotor blades and other related equipment and parts. In fact, offshore wind decommissioning is even more intricate and expensive, as the availability of shipping vessels, cost of shipping the components back on shore and cost of removing steel pillars form seabed need to be considered too. Related: Oil Prices - What Does “Lower For Longer” Actually Mean?
Wind farm decommissioning is indeed going to be a universal problem, especially for countries like the United States where a large number of wind projects are being developed. The U.S. has more than 48,000 utility operated wind turbines and more than 18 million American homes are powered every single year by the country’s installed wind capacity. Even corporations such as Yahoo!, Google, Microsoft, IKEA, Mars, Walmart and Amazon have invested in the U.S. wind energy sector.
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Total US installed wind capacity as of 4Q 2014
Image Source: Awea.org
The numbers above suggest that the U.S. is going to face a similar problem that Germany is now facing may be in the next 8- 10 years when its oldest wind farms become outdated. However, a lot depends upon the efficiency and technology of turbines that are in use. Even if around 30 percent of U.S. wind turbines need decommissioning in the next five to ten years, the total decommissioning costs could reach up to $1 billion (when we consider a decommissioning rate of $55,000 and above per turbine). Related: Goldman Sachs: “Peak Coal” Is Here
What can be done with the decommissioned wind turbines?
A previous study that was commissioned by Scottish National Heritage (SNH) forecasted that there would be a need to ‘recycle’ approximately 225,000 tons of rotor blades by the year 2034. Something similar is happening in Germany, where the rotor blades are ‘reprocessed’ in industrial scale factories and then shredded and mixed with other waste. The final product is then used in cement manufacturing facilities as fuel.
Moreover, the second hand market for the discarded wind farms is flourishing in Asia, Russia, Eastern Europe and Latin America where the components can be re-used in applications such as building community wind farms. The issue of wind turbine decommissioning must be viewed more as an opportunity than a threat, as the wind decommissioning market (for both offshore and onshore) is growing at a rapid pace. The question is whether the global wind industry is prepared to seize this opportunity.
By Gaurav Agnihotri for Oilprice.com
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