Utility Dive Quotes Ed Einowski on Decommissioning vs. Repowering of Older Renewable Facilities

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Even with a reduction in capacity factor "the generation is almost free so there is no reason not to sell to the market, whatever the price,” Einowski said. “We have not heard any serious discussions on decommissioning solar and it is entirely possible that will not be common.” —Ed Einowski quoted in Utility Dive article.
Stoel Rives attorney Ed Einowski was quoted in a Utility Dive article titled “Zombie wind and solar? How repowering old facilities helps renewables keep cutting costs.” The article discusses how instead of decommissioning renewable energy facilities, utilities are “repowering” them—especially the first U.S. wind projects, which are reaching the end of their productive lives—dismantling and replacing all of the turbine equipment or replacing select turbine or plant components. 

Repowering with new technology is made appealing to the renewable industry by the extension of the $0.023/kWh federal production tax credit (PTC). The projects will qualify for the PTC for 10 years, making them able to win new, low-priced power purchase agreements (PPAs) with utilities or compete at the low prices seen in today’s wholesale electricity markets. 

Einowski addresses the differences between lease agreements and PPAs with respect to decommissioning wind projects that are to be taken out of service. PPAs typically don’t make any requirements for decommissioning, and although leases may require the restoration of land upon decommissioning, Einowski says that is rarely an issue as “land leases are usually 20 years or 25 years and typically contain a right to extend for another 20 years or 25 years.” 

Einowski says the decommissioning of solar power plants is more unlikely than for wind projects because of the favorability of the economics of keeping them in operation—land is more often owned by developer, eliminating the complexities of renegotiating a lease, and maintenance is minimal. 

Read “Zombie wind and solar? How repowering old facilities helps renewables keep cutting costs,” published October 26, 2016. 

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