Repowering

Abstract

In a period when financial resources are constrained and there is emphasis on cost cutting and improving operations, repowering offers the potential to significantly improve existing power plant assets. Such improvements can include a more than 50% improvement in power plant heat rate, leading to tremendous operating cost savings. Yet despite the potential operational benefits of repowering, the authors have found that there are misconceptions regarding repowering economics. Those views appear to be limiting the extent to which repowering is being considered as a power supply resource option. Two common misperceptions of repowering relate to its relative installed cost compared to greenfield construction and its comparative financial returns on a life-cycle basis. The authors discuss these two issues and make the case that repowering should be routinely included in power supply planning, along with options such as greenfield construction, power purchase agreements, and spot purchasing.