Wind-operations survey predicts digital, profit-sharing future By Amy Stankiewicz | May 24, 2018 Onshore wind participants predict more revenue-sharing, digitalization, and multi-project contracts in the operations and maintenance sector, while service providers plan to expand spare-parts capabilities, a survey by New Energy Update shows. Onshore wind participants predict more revenue-sharing, digitalization, and multi-project contracts in the operations and maintenance (O&M) sector, while service providers plan to expand spare-parts capabilities, a survey by New Energy Update shows. Ageing wind fleets, falling technology costs, and increasing competition between power-generation technologies have raised the importance of O&M. The continuing drive toward lower wind costs has accelerated competition in O&M markets and spurred innovations in O&M contracting. The importance of O&M costs within the levelized cost of energy (LCOE) can vary widely between wind projects and markets, according to the survey. Some 54% of wind plant owners said that O&M costs account for between 10% and 30% of LCOE, while 12% said O&M costs represent more than 30% of costs. Around 36% said costs represented less than 10% of LCOE. Responses were gathered from 34 asset owners. Conducted in March, the survey polled 557 wind-industry participants. Around 60% of respondents focused on North America or Europe. Some 20% of respondents focused on Asia, and around 15% focused on Africa with the remainder active in South America and Australasia. Approximately 46% of owners said they received the bulk of their revenue from turbines operational for less than five years. Around 31% were more active with turbines of between five and 10 years, and 23% more active on turbines of over 10 years. Around 46% of owners estimated onshore wind O&M costs between $20,000 and $30,000 per MW per year but 32% estimated higher O&M costs for their assets, according to the survey. The average turbine age in North America will rise from 5.5 years in 2015 to 7 years in 2020 and 11 years in 2025, IHS Markit said in a report published in December 2017. O&M costs are forecast to rise from $45,000 to $50,000 per MW per year for turbines aged between five and 10 years, to around $50,000 to $60,000 per MW per year for turbines aged between 10 and 15 years. Wind-farm owners see cost as the most important driver when selecting turbine service partners, the New Energy Update survey shows. Other key drivers include track record and reputation, availability of performance guarantees, and spare parts procurement capabilities, according to the survey. As wind markets mature, the removal or expiration of wind subsidies and the introduction of competitive wind-power tenders will see more wind farms exposed to wholesale market risks. Going forward, wind-sector participants predict that profit-sharing schemes between owners and O&M providers, digitalization, multi-project contracts, and resource sharing will be key market trends in the post-tariff era, according to the survey. Read the full story here. Filed Under: News, O&MTagged With: newenergyupdate
