PV Plant Repowering, the Utility 50-Year Systems Model
April 28, 2017
The issues that define the differences begin with how well the initial plant was specified prior to design. In essence; what were the design goals and objectives? Were they a well-specified design for a long-term hold strategy or was it a quick build and flip approach? These two approaches deliver two completely different financial scenarios and levels of risk.
The assumption that all commercial industrial and utility plants will operate smoothly for 20 to 25 years is directly related to how robust the specification and design are. Because most of the industry has very little experience in terms of time, it’s easy to overlook a number of items that make a substantive impact on the viability of a project life cycle. Building a robust system is somewhat at odds with building a cheap least cost system. The advantages; O&M labor and project risk are reduced as potential income is increased while dramatically reducing system defects, faults and failures. In other words, they have a superior plant availability throughout their life cycle.
Existing and Distressed Plants
In existing and distressed plants with the design life of 20 to 25 years, the goal is to meet that 20 to 25 years and most likely dismantle the plant at that point in time then restoring the site. This is, in good part, because there is no long-term repowering plan and the project is seen as having a specific life limit of 25 years or less. This practice can be seen as being wasteful and risky.
An example of the need for repowering could include inverters and modules that were not particularly well-suited for the climate, having a tendency to fail or requiring excessive O&M dollars which may not be budgeted. It may also include an inverter or module manufacturer that goes bankrupt thereby leaving the owners and operators dramatically reduced options for continued operations.
Existing plants may simply find that a large number of units of components have just reached the end of their usable life earlier than expected. That usable life may not have been factored into the financial requirements for the plant’s lifetime and therefore required a more robust financial analysis.
If the costs allow for major replacements of modules and inverters in existing systems, the operator may initiate a methodical replacement as to minimally disrupt power production. This process is a common utility practice in today’s thermal plants and positively impacts reliability and profitability.
This form of repowering may or may not be part of the plant life cycle planning or in some instances, may be just a part of deferred maintenance. Either way, it does not maximize the potential value of the plant.
Where the economics become far more attractive is when the developer and owner pursue the long-term utility practice of building a robust infrastructure. With this approach, they can continue to maintain the plant two or more times the initial project life cycle thereby reaping additional production and financial benefits. The financial and energy impacts result in a better IRR and ROI. Permitting, site acquisition, fencing, roads, substations etc., have already been acquired and paid for. This allows for an improved and consistent levelized cost of energy, while assuring lower lifetime costs and addressing, through the repowering plan, technology change.
Those variables and variation can include module size, voltage and current changes, a shift in voltage and size for inverters and a number of other considerations that will need to be addressed and modified.
Repowering Plans for New Systems — The Utility 50-year Model
The process itself is not difficult, however it does require additional planning and engineering and a substantial specification to assure that the owner receives what they think they are buying. It requires additional consideration of change and how to address those changes. This model is different from the existing model because we begin with a clear and detailed specification prior to design, which includes the repowering plan. It brings in operations, QA and commissioning at the same time prior to EPC bidding. This requires additional work for the developer and owners. Yes, there are additional upfront cost which are paid back during the first portion of the initial life cycle especially when considering unexpected O&M costs.
The advantages are that issues of plant reliability, availability, maintainability, testability and safety are built into the project and bidders are all bidding on the same plant. This results in a plant that is more robust, delivered at little to no additional cost, while including far greater fiscal certainty. That certainty is bankable and consists of a number of missing elements on our path to industry maturity.
Lead image credit: Bureau of Land Management | Flickr