Wind repowering in Illinois

As wind turbine technology continues to move ahead, the owners of wind power projects are finding that it can make business sense to repower their existing wind farms-such as Leeward Renewable Energy LLC did with a wind project in Illinois.

By Paul MacDonald

As wind turbine technology continues to advance, the owners of wind power projects are finding that it can make economic—and business—sense to repower their existing wind farms, projects that were built a decade or more ago.

A recent example was in the U.S. Midwest, where Leeward Renewable Energy LLC successfully completed the full-scale repower of its Mendota Hills Wind Farm in Lee County, Illinois, in March.

The repower of Mendota included the decommissioning of the existing wind turbine generators and the installation of new foundations and turbines to maximize efficiency and extend the life span of the wind farm.

Leeward replaced the 63 legacy Gamesa turbines on the project with 29 Siemens Gamesa 2.6-126 turbines, increasing the capacity from approximately 50 MW to 76 MW. With turbine technology improvements, Mendota will reduce operational costs while increasing reliability and performance.

As part of the initiative, Leeward entered into a long-term power purchase agreement (PPA) with Digital Realty and will provide approximately 276,000 MWhs of renewable wind power annually. Through the construction phase of Mendota, Leeward generated approximately 250 jobs and will increase its contribution to Lee County in the form of property tax payments.

"This was an ambitious project that is creating tremendous benefits and efficiency for our customers and Lee County," said Greg Wolf, Leeward Renewable Energy CEO. "The Mendota project illustrates the innovation that Leeward is striving for in both our development initiatives as well as management of our existing assets to build and maximize our portfolio."

In addition to working with Leeward on the repowering initiative, Siemens Gamesa is providing operations and maintenance for the site.

Wolf noted that the company had been looking at repowering the Mendota project over the last several years.

"The Mendota project was built in 2003 and was actually the first commercial wind power project in Illinois," he said. "Mendota had a good history of operations, but the equipment was dated, and it was one of the higher priority opportunities where we could re-invest and repower."

Several factors led to the repowering project moving ahead, he explained. "Wind power technology has advanced, and there were clarifications from the IRS relative to qualifying projects for the Production Tax Credit, as long as it met certain requirements for new investment, which optimized the repower of Mendota.

"These were early turbines, and Mendota had some of the older technology in our fleet," he added. "The technology uplift opportunity math was very impactful—and with the IRS guidelines, it was a project that made a lot of sense for us."

And the company has a successful track record in repowering its projects.

Leeward completed the repowering of the combined capacity 136-MW Sweetwater 1 and 2 wind farms in Nolan County, Texas, in December 2017. GE Renewable Energy was the wind turbine provider for the projects.

As with Mendota, the Sweet water 1 and 2 repowering program enhances performance by replacing major existing components and providing a material increase in annual energy production. Through the repowering project, the companies installed state-of-the-art technology at the facilities to increase the sites' efficiency, reduce costs, and extend the life of some of Leeward's oldest operating assets. Sweetwater 1 and 2 wind facilities have been in operation since 2003 and 2005, respectively.

Wolf explained that they found there are generally two approaches to take on a repowering project.

"One is partial repowering," he said. "We take an existing site and leverage the existing foundations, and likely the towers, and then install new turbine technology, including the nacelle and blades, at the top of the turbine." That is what they did with the Sweetwater projects, he noted.

"GE helped with the upgrades on some of the turbines, they installed new nacelles, and on others they replaced the entire drivetrain of the turbine with new technology—with a new rotor and new blades."

A partial repowering can be a good fit for wind projects that are a bit less dated technologically and have a footprint and foundation dynamic that makes sense, he added.

Because Mendota was 15 years old, they did a full repowering. As noted, they took down the 63 existing wind turbines, all of which were less than 1 MW in size, and replaced them with 29 turbines that are 2.6 MW each.

"The number of turbines on the site went down by more than 50 percent, but the total nameplate capacity of the project actually increased."

With Mendota, they took out all the old foundations and took each site down to below grade, in order to meet their obligations to the landowners. Sites that were no longer needed were returned to the landowners.

"We certainly leveraged the existing grid interconnection and substation, but we put in new foundations for the turbines and a new collection system," said Wolf. And, of course, brand spanking new wind turbines.

"In a sense, you are building a whole new wind farm, but at a site that you know has a proven wind regime, and where we have proven experience and good relationships with our landowners."

Carrying out this effort was Mortenson Construction, the EPC on the project. Local contractors were used for the demolition and electrical work.

In the end, they have a 2019 wind project, with state-of-the-art turbine technology. That technology has advanced significantly since Mendota was built in 2003.

	A partial repowering can be a good fit for wind projects that are a bit less dated technologically. But because Mendota was 15 years old, Leeward did a full repowering and took down the 63 existing wind turbines, all of which were less than 1 MW in size, and replaced them with 29 Siemens Gamesa turbines that are 2.6 MW each.

"In terms of how much the technology has moved forward, it depends on the exact metrics you use—there are different ways to calculate it," says Wolf. "Certainly blade technology has come a long way—we've gone from 52-meter rotors on the old project to 126-meter rotors on the current project, or almost a 2.5 times increase in the rotor sweep area. That really contributes to a big uplift in the capacity factor."

They have gone from a capacity factor of 23 or 24 percent, to 42 percent—a large increase.

"Capturing the wind more efficiently is a huge part of making the economics of a repowering project more interesting," says Wolf. "You can also cut your operating expenses by almost a third on a per MWhr basis. The wind technology and cost reductions probably work out to an overall 85 percent improvement, with everything factored."

While the numbers for repowering can be very convincing, actually carrying out a repowering project is far from a slam dunk.

"Repowering can be a very compelling investment, but it is certainly not easy," he said. "We are really proud of our Leeward team to have the three projects—Mendota, Sweetwater 1, and Sweetwater 2—completed." It was, he says, a lot of work.

He noted that a number of critical steps project owners have to go through makes repowerings challenging.

"You have to make sure you have your lease agreements with your landowners in order and extended for a new 30-year life—and that is going to be a firm requirement for any of the financing.

"You have to control the project. A lot of projects might not be owned 100 percent by a given entity, and that could complicate things. Some projects might still have some tax equity from the original financing in place, and this has to be addressed. You need to coordinate with tax equity through a buy-out or get consents from the parties."

In the case of Mendota, Leeward achieved a financial close with a subsidiary of Citi, which provided tax equity financing for the project.

Wolf said the rules regarding interconnection requirements have become more challenging and are certainly more involved than when Mendota came online in 2003.

Capturing the wind more efficiently is a huge part of making the economics of a repowering project work. Operating expenses can also be cut by almost a third on a per MWhr basis.

"The repowering projects are leveraging an existing connect, but the RTOs are establishing and modifying the rules of what has to be done. The rules have tightened up to where it is almost like you are doing a new project, for repowering approvals. Entering a queue position is going to be required a lot of the time, as opposed to just a modification of the existing agreement."

FAA regulations have evolved, and the new regulations need to be met to obtain financing. And many companies are looking to get a buyer for their power output. "You have to go out and compete in the market, like we did with Mendota, and we got an agreement with Digital Realty.

"No doubt that it's as hard as building a new project," he added.

It can be, as the saying goes, complicated.

"All of those things have to come together," says Wolf. "There have been other repowerings beyond what we at Leeward have done, and it is a growing number—but there have not been quite as many completed as you might have expected."

That said, more repowering projects are on the way for Leeward. "With projects that are 10-plus years, the same math and analysis that we used for Mendota and the Sweet-water projects is something that we look at all the time. We have a number of projects that are candidates for repowering—we did Mendota in 2019 and Sweetwater 1 and 2 were the 2018 projects for us. We expect we will complete another project or two in 2020."

The bottom line with the projects is they are making better use of the wind resource and generating more power. "It's a smart investment," says Wolf. "If you are going to have a wind farm on a given footprint, it makes sense to have the most efficient wind turbines."

Wolf had a few pieces of advice for those companies thinking of doing repowerings.

"As you're phasing down and preparing for the repowering, and then ramping up after, the coordination between the existing site operations team and the construction phase is critical." The Mendota operations manager stayed on site during the entire repowering project, and his experience, knowledge, and local relationships were very valuable. And he was there when Mendota was powered up again. "It's important to have that continuity."

And because an existing project must first be demolished, the logistical planning for a repowering is actually more involved than a greenfield project. "You need to do a lot of early planning—what you are going to do with the equipment that is taken down and get it taken away from the site. Having it organized saves money and time and keeps your local partners happy."

In the case of Mendota, as much as possible of what was taken down was recycled, and this had to be organized. "We did as much recycling as we possibly could—and that was an emphasis with our contractors," said Wolf.

Leeward Renewable Energy, one of the leading U.S.-based independent power companies, has a portfolio of 19 wind power facilities in nine states with a total owned interest of 1,720 MW. Additionally, Leeward has a development pipeline of over 1 GW of wind, solar, and energy storage projects that provide a solid foundation for the continued growth of the business, in addition to any repowerings.

Wolf expects Leeward to soon have company in the repowering space, with the industry on a broader basis looking at doing more repowerings. "As an industry, I think there is an expectation that there will be a growing number of repowerings, and there will be a material level of investment in repowerings over the next three to five years."