More than 3.5TW of global wind and solar capacity is currently operational, but all good things come to an end, and 2.5 TW of projects will face being degraded by the 2040s, leaving owners with the choice of abandoning the sites, investing to extend its life, or renew.

Wood Mackenzie's latest Horizons report, Renewing Renewables: The next chapter in the energy transition, considers these options, noting that decommissioning has already started in the wind industry. By the end of 2026, more than 30GW of wind capacity will have been decommissioned worldwide, two-thirds of which was brought offline between 2022 and 2026. Solar began its rapid deployment later than wind, but its ageing fleet is set to overtake wind before 2040.

The report concludes that repowering offers a compelling economic case. Because a site already has an existing grid connection, planning approval and community acceptance, new equipment can reach the market faster than a greenfield project, bypassing the queue and permitting delays that have slowed new development in many markets. The capital and operating expenditures are broadly similar to greenfield development, but the economic advantage of repowering extends to other factors, such as the location, cost efficiencies and power output.

The quality of established sites makes that advantage even more significant, with earlier windfarms often placed at premium sites with the best potential for wind. In Germany, the wind speeds at sites decommissioned so far this decade are 4 per cent higher than those at greenfield projects coming online on average. A 4 per cent increase in wind speeds translates into roughly 7 per cent higher capacity factors and 7 per cent lower levelised cost of energy (LCOE), all else being equal.

"We are entering a new chapter in the energy transition, one defined not just by power demand growth, but by renewal," said Søren Lassen, head of wind at Wood Mackenzie. "Without installations replacing decommissioned projects, global wind and solar deployment would continue to decline year-on-year. By acknowledging this impact, it will fundamentally change the long-term trajectory and narrative of renewables and hopefully also company and government strategies."

A worry is that governments across the world are setting renewable capacity targets without accounting for decommissioning and that could make already ambitious goals even harder to reach. At the same time, policy incentives for repowering are limited to a handful of wind markets, incentivising asset owners to pursue longer operational lifetimes instead of reinvesting in their operational portfolios.

For manufacturers, the picture could be good. Even as the rate of growth in net capacity additions slows, Wood Mackenzie estimates that the volume of actual equipment sales will be more than 60 per cent higher in 2050 than in 2026, driven by the need to replace ageing assets at scale.

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