More than 2.5 TW of ageing wind and solar projects globally could require decommissioning or repowering by the 2040s, potentially creating a new cycle of renewable energy installations, according to Wood Mackenzie. The global operational wind and solar fleet has already exceeded 3.5 TW, while early-generation projects are approaching the end of their design lives.

Asset owners will increasingly have to choose between decommissioning projects, extending their operating lifetimes or replacing existing equipment. More than 30 GW of wind capacity is expected to have been decommissioned globally by the end of 2026, with about two-thirds of the capacity taken offline between 2022 and 2026.

Solar deployment began later than wind, but ageing solar capacity is expected to overtake wind in decommissioning volumes before 2040. Repowering existing renewable sites could provide advantages over developing greenfield projects because operational locations generally have grid connections, planning approvals and established community acceptance.

Existing site conditions could also improve the economics of replacement projects. In Germany, average wind speeds at sites decommissioned so far this decade are 4 per cent higher than those at new greenfield projects, with the difference reaching 30 per cent in some cases. A 4 per cent increase in wind speed can translate into an approximately 7 per cent increase in capacity factors and a 7 per cent reduction in the levelised cost of energy, assuming other factors remain unchanged.

Developers are acquiring operational projects in suitable locations, removing old equipment and installing new capacity at the same sites. The approach is particularly relevant in Europe and the US, where land availability, grid capacity and planning approvals can restrict new development. The European Commission has targeted 500 GW of wind capacity by 2030, requiring about 37 GW of annual additions between 2023 and 2030. Wood Mackenzie expects about 17 GW of wind capacity to be decommissioned in Europe during that period, creating a need for roughly 2 GW of additional annual installations merely to replace retiring capacity. Limited repowering incentives in several markets could, however, encourage owners to extend existing project lifetimes instead.