machines are growing -- and so are sales of them to eastern Europe and even to Britain and Canada. A second hand turbine industry has been flourishing in Denmark for years. It is now spreading to Germany and Holland
Repowering of old wind projects with new turbine technology in Germany, the world's largest wind market, is not expected to make a substantial contribution to the wind business until the end of this decade. Yet projects in which several smaller machines are replaced with fewer larger ones are now occasionally appearing on the German wind landscape. As a result, interest from around the world in buying used wind turbines from Germany is growing. A fledgling new business is now showing signs of gaining in sophistication.
In the early 1990s, reaction to efforts at selling used wind turbines from California to developing countries was decidedly mixed. A strong body of opinion argued forcefully -- and in the end successfully -- that dumping outdated technology on an inexperienced yet potentially large new market was morally questionable and likely to be bad for long term business. In Germany today, another body of opinion is arguing that sales of well maintained older machines allow new markets to gain positive experience of wind power at a lower commercial risk than the far greater investment needed to buy state-of-the-art technology.
Repowering a project in Germany makes best economic sense if the used turbines, often with potentially many years of useful service ahead, can be sold. But matching turbines that become available with buyers is not easy. After two years of hard experience in the Netherlands, Dutch company Windbrokers tells wind station owners: "As soon as you start to even think about repowering you should simultaneously set about finding buyers for the turbines that will be replaced."
Potential for repowering in Germany is not enormous. Far from every turbine owner wants to take on both new risk and higher costs by installing turbines with three times or more capacity than their old machines -- especially today, when the old machines are earning good returns from fixed premium rates of pay under the country's renewable energy law. But changing government policy and new economic realities may encourage an increasing number of wind stations owners to re-equip.
Under the rules of the German Renewable Energy Law's fixed prices for wind generation, wind stations on sites with a good wind resource see their high premium payments drop to a basic rate after just five years of operation. Here it could make sense to repower, especially if sufficient forward planning could return a bonus from the sale of the used machines. At sites with lower wind speeds, there is less motivation to repower since the most lucrative period with highest premium payments may be extended to up to 20 years (Windpower Monthly, December 2003).
For the whole of Germany, up to 1200 used turbines in the 150-600 kW size range will be potentially available for the international market within the next ten years, according to a team of researchers at the technical university of Clausthal. More than half will be supplied from projects in windy Schleswig-Holstein where the industry has its roots. There were 2550 turbines with a combined capacity of 1950 MW in operation in the states at the end of 2003, with an average rated capacity per unit of 766 kW. The state has potential for 2500 MW if sites with small machines were repowered, using a 3:1 ratio, according to the state economy ministry. That provides a repowering market for 850 new turbines in Schleswig Holstein alone.
Also in Holland
In the Netherlands, energy policy strongly encourages repowering of wind stations by cutting payments for wind generated electricity to just EUR 0.015/kWh after ten years of operation. About 50% of the country's 1500 turbines have more than a decade on the clock. "Not everyone is repowering but there could be 750 old machines looking for a buyer within the next three years," says Dick Vermeulen from Windbrokers.
The economies of repowering must be carefully calculated, Vermeulen warns. "If you can't sell the used turbines they have no value. If they are stored for a long time they lose value and may even develop a negative value if their storage and disposal involves costs."
German consulting engineer Dieter Fries in Hamburg also points out that prospects for repowering may depend in part on whether old turbines can be sold. An existing wind plant operator planning to repower two 500 kW turbines using a 1.8 MW machine costing EUR 1.6-1.7 million could add EUR 0.2 million to the sales price of the old turbines, he says. "If he can't find a buyer, he may not repower. An operator planning to replace three 150-250 kW machines, for which he hopes to get EUR 20,000 each, may get this comparatively small sum as a rebate from the manufacturer of the new turbine." Used turbines will sell more easily if they can be bought for cash. Once bank loans are involved, other factors, like operation guarantees, can push up costs and prevent the deal making business sense, Fries points out. Small turbines also have relatively simple technology so the new owner could run them with reasonably low maintenance costs, he adds.
In the field
The experience of market players to date supports the general opinion that selling used turbines sounds like a good idea in theory, but that in practice it is not that easy to turn a profit from the exercise. A major repowering project recently completed near Husum in Schleswig-Holstein was not dependent on sale of the used turbines. On the contrary, the wind station's managing director, Dirk Ketelsen, says the Reussenköge project was motivated by other factors. First, the 24 new turbines are larger and turn slowly, creating a more peaceful landscape than the 34 they replace. Second, it was possible to add another further 19 machines to the station. Third, the output from the repowered section has more than trebled as a result of the repowering, to about 133.5 GWh/year, more than justifying the decision since investors are getting greater returns on their money than before. Fourth, from this month, premium payments for electricity generated by the old plant would have fallen to the lowest basic rate for wind energy; the new plant are eligible for the highest payment rate.
The fate of the old machines was not economically relevant to the Reussenköge repowering and, so far, less than a handful of them have been re-sold. One is up and running in Estonia, a second was bought locally to provide a source of spare parts and the third was bought back by its manufacturer, Enercon. With the rest in storage, it remains to be seen whether the owner can find buyers or will eventually have to scrap them.
Africa and Bulgaria
Ketelsen is optimistic they can be sold. The machines, installed in 1990-1993 and thus with only ten years wear and tear, could have plenty of life left in them yet. Prices for ten-year-old 200 kW machines lie in the EUR 25-30,000 range; for 400 kW machines of the same age the going rate is EUR 50-60,000 and for 500 kW machines it is EUR 80-90,000, depending on the quality, according to Ketelsen. "We are getting an enquiry daily from potential purchasers from eastern Europe, including Bulgaria, from Greece, Africa and Latin America," he reports, adding that "we haven't advertised, but word gets around and some turbine manufacturers refer potential customers to us."
Ketelsen concedes, though, that the used turbine business has a wild west feel to it. "There isn't yet a perfect concept for selling second hand machines." There is no guarantee for a second hand machine and the lack of wind energy experience of potential buyers slows sales. He suggests the setting up of joint ventures to operate the turbines for buyers in pristine markets with no experience of wind power.
Unlike experience with the Reussenköge wind station, other German companies have made selling second hand turbines a bigger part of their business. Wind turbine servicing company L&L Rotorservice of Basdahl has sold 25 used turbines over the last two years and expects to sell 35-40 of various sizes in 2004. The firm dismantles the old turbines, transports them to the new site and installs and commissions them for the customer. A one-year guarantee is offered on the blades if L&L overhauls them before they are reused.
Currently the company has commissions to find buyers for about 250 machines with rated capacities from 80 kW and up to 1.5 MW from wind station owners in Germany, Denmark and the Netherlands. In business since 1994 and with about 75 staff in Germany, Spain and Portugal, L&L is Europe's largest turbine service company, specialising in blades, says the company's Norbert Lührs. He gets enquiries about used machines from all over the world including Japan and China, South America, eastern Europe and Africa, "largely through the turbine servicing work."
While used turbines are just one element of L&L's business, the two-man team at Dutch company Windbrokers is focused entirely on second hand machines. The company generally deals with 225-750 kW models, inviting potential customers to "select their preferred wind turbine" when their project takes shape. "Within our source area we know where the turbines are installed and which ones will become available for sale," says the company.
Concerned that only used turbines that are in good working order are sold on, Windbrokers says its sales process may include inspection of its turbines by an independent party, which "in general" is work done by British engineering company Garrad Hassan or Germanischer Lloyd of Germany, which certifies engineering solutions. Windbrokers also arranges for a 12 month insurance policy for the machines, through British broker Marsh, says Vermeulen.
How much "inspection" has been carried out is an open question. Garrad Hassan's Ross Walker says his company has only been asked to inspect one turbine by Windbrokers -- and that was done through its Netherlands office. No other relationship or contracts have developed, he adds. At Germanischer Lloyd in Hamburg, Torsten Faber says the company's business is to check and certify engineering calculations and solutions, rather than to inspect second hand turbines-a field it has not gone into. It has the capability, however, to certify the remaining service life of second hand turbines, says Faber.
According to Vermeulen, Windbrokers generally arranges for the turbines it sells to be installed and serviced at their new location by the original manufacturer since the turbine companies are concerned that used machines work just as well as their state-of-the-art technology.
Windbrokers, which says it gets ten to 20 enquiries for second hand wind turbines from around the world each week, has sold about eight used turbines since July last year and hopes to sell 25-50 machines in 2004. In 2003, four turbines went to customers in the UK, and one each to Finland, Germany, the Netherlands and Canada. This year, up to eight will go to customers in Scotland and England, it says. Others will go to Canada, in particular to the provinces of Alberta, Ontario, and Nova Scotia.