Economics of a Repowering Project
When does repowering make economic sense? Here is a concrete DCF calculation for a typical Northern Germany site, plus sensitivity analysis and stress tests for the critical parameters.
Example Project
| Parameter | Old configuration | New configuration |
|---|---|---|
| Number of turbines | 8 × 1.5 MW | 3 × 6.0 MW |
| Total capacity | 12.0 MW | 18.0 MW |
| Full-load hours | 1,900 h/a | 3,000 h/a |
| Annual yield | 22.8 GWh/a | 54.0 GWh/a |
| Specific investment | — | 1,350 EUR/kW |
| Total investment | — | 24.3M EUR |
| Revenue model | PPA / spot | EEG 7.2 ct/kWh |
| Annual revenue | 1.3M EUR | 3.9M EUR |
| OPEX | 0.9M EUR/a | 1.1M EUR/a |
| Cash flow (pre-tax) | 0.4M EUR/a | 2.8M EUR/a |
DCF Calculation (Simplified)
| Year | Cash flow | Discounted (WACC 5%) |
|---|---|---|
| 0 (investment) | −24.3M EUR | −24.3M EUR |
| 1–20 (cash flow) | +2.8M EUR/a | Σ 34.9M EUR |
| 20 (residual value + decommissioning bond) | +0.3M EUR | +0.1M EUR |
| Net Present Value (NPV) | — | +10.7M EUR |
| Internal Rate of Return (IRR) | — | 9.1% |
| LCOE | — | 65 EUR/MWh |
| Payback period | — | 10–11 years |
Sensitivity Analysis
How does the NPV react to changes in key parameters (±10%)?
| Parameter | −10% | Base | +10% |
|---|---|---|---|
| Full-load hours | +4.2M EUR NPV | +10.7M EUR | +17.2M EUR |
| Electricity price / EEG value | +5.3M EUR | +10.7M EUR | +16.1M EUR |
| Investment costs | +13.1M EUR | +10.7M EUR | +8.3M EUR |
| OPEX | +11.9M EUR | +10.7M EUR | +9.5M EUR |
| WACC (3% / 5% / 7%) | +18.4M EUR | +10.7M EUR | +4.8M EUR |
Sensitivity and stress test analysis — full-load hours and electricity price dominate returns
Stress Tests
How does the project react to extreme scenarios?
- Low-wind scenario (FLH −20%): NPV +5.0M EUR, IRR 7.0% — still profitable
- Market price drop (electricity price −20% after EEG expiry): NPV +4.8M EUR, IRR 6.8% — marginal
- CAPEX shock (+20%): NPV +5.1M EUR, IRR 6.9%
- Worst case (all three combined): NPV +1.3M EUR, IRR 5.2% — barely positive
Financing Structure
Typical repowering financing in 2026:
- Equity 20–30%: 5–7M EUR, return expectation 8–12%
- Debt 70–80%: 17–19M EUR bank loan, interest 4–5%, maturity 15 years
- Repayment structure: often interest-only in the first 5 years with bullet payment, then annuity
- Collateral: turbine security assignment + cash flow assignment
Community Wind Participation — Effect on IRR
Where community wind participation is mandatory (MV, BB, NRW): typically 20% equity share to residents/municipality at preferential terms. Effect:
- Equity return slightly reduced (community equity is serviced at a fixed return)
- IRR decreases by approx. 0.5–1 percentage point
- Acceptance improves measurably (lower litigation risk)
- Bank financing often facilitated
Detailed economic analysis for your project?
We connect you with an energy auditor specializing in wind — full DCF model with sensitivity analysis, stress tests, and bankability assessment.
Request consultationFrequently Asked Questions
What IRR is attractive for institutional investors?
Currently in 2026: 7–10% after tax. Below 7% is increasingly difficult to finance, above 10% at premium sites or with higher risk tolerance. Pension funds target 6–8%, private equity 10–15%.
How do delivery time risks affect returns?
Delayed commissioning costs electricity revenue plus a penalty of 10 EUR/kW for exceeding the EEG deadline. A 6-month delay can reduce the IRR by 0.5–1.5 percentage points.
What happens after 20 years?
EEG funding ends, electricity is marketed at spot price or via new PPA. The base case includes 8–10 years of post-EEG operation at approx. 50 EUR/MWh. Optimistic long-term due to rising electricity prices — pessimistic due to renewable oversupply.
Can I get an indication using the repowering yield calculator?
Yes — the Repowering Yield Calculator provides the annual yield difference and additional revenue. For the full DCF calculation, you also need the LCOE Calculator and a sensitivity table like the one above.