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Unleash your growth potential by insourcing wind O&M

By Gian Schelling
14-02-2021 | 6 min read

In 2020, global wind power capacity increased to over 744 GW.

To serve the rapidly growing needs of wind fleet owners and operators, wind turbine generator (WTG) manufacturers have developed the specialized and profitable discipline of providing WTG operations and management (O&M) services.

Many wind park owners and operators have opted to take advantage of this offering and outsource their O&M through performance warranties coupled with full-service contracts – often at costs upwards of US$60K per WTG/per year for the life of the contract.

However, the availability and competitive cost of modern asset performance management (APM) tools supported by artificial intelligence (AI), have led many to rethink these outsourcing decisions.

Larger owners and operators often have mature internal O&M functions, which makes the adoption of APM solutions a natural extension of their operations whilst smaller wind turbine owners and operators with limited fleet sizes can also take advantage of APM solutions to augment their capabilities and bring these asset-focused functions wholly in-house.

In fact, wind owners and operators of all sizes are taking their destiny back by insourcing O&M activities – for four primary reasons – as described below. 

1. You know your assets best

Leading equipment manufacturers currently oversee the largest installed base of wind turbines and can legitimately claim to have access to the “most data.” However, data volume does not always equate to data quality. They may not have access to your wind fleet’s specific data such as local wind and site conditions, asset history, preferences, or portfolio mix. Also, they aren’t taking into consideration your institutional knowledge from your team’s experience in the field.

Blanket OEM data is often insufficient to make operational decisions. Take the freezing challenges that contributed to a regional, days-long black-out in Texas in 2021. Global averages in WTG icing rates were not enough to anticipate the threat. Texas Interconnection owners and operators could have gained from a system using actual data from their systems and drawing on the site-specific knowledge of their local field crews.

That’s the data at the heart of APM systems. These independent third-party software solutions allow precise malfunction forecasts by combining field service and O&M management data and tailoring prognostics to your specific assets – regardless of manufacturer. 

2. Avoids hidden cost of OEM exclusions

The world’s top three WTG OEMs are pure-wind players. Their performance warranties typically don’t include the most critical components: the substations. They suggest substations have few or no rotating components and only rotating components need to be protected. Yet experienced owners and operators know substations are the most critical assets in their systems and make avoiding substation downtime a top priority.

Excluding other generation assets from the APM solution also increases risk. Overall asset performance in your portfolio may be determined by solar, hydro, or conventional power assets as well. The best third-party APM solutions cover your entire asset portfolio – from WTGs to substation equipment to non-wind renewables to conventional generation assets – regardless of the manufacturer.

3. Sustainable wind needs a long-term view

WTG manufacturers typically offer “full-service” contracts lasting between two to five years. Their aim is to optimize asset up-time and maximize availability or yield while components are new and tactics such as increasing lubrication of the gearboxes can help maintain contracted output. However, this approach is not always in the WTG owner’s best long-term interest.

For example, considering the typical WTG lifespan of 20-25 years, it can make sense to repair or replace gearboxes – the most critical component in geared WTGs – before acute wear or failure occurs. Yet, due to the cost, this might not be seen as the optimal solution by the contracted manufacturer with a short-term view. Or, if a rotor is predicted to fail shortly after expiration, the threat may not be disclosed until the next contract term is negotiated. These scenario, while favorable to the OEM’s budget, are not beneficial to owners and operators.

More sophisticated tools can help project owners and operators avoid what economists call the “principle-agent challenge” – a conflict in priorities that can arise between an entity and the representative authorized to act on their behalf. 

4. Supports top-line growth potential

With the most attractive wind-sites (e.g., permittable coastal, remote, high-wind areas or easily grid-connected sites) already occupied, finding profitable sites for new installations is becoming more challenging. As a result, global analysts forecast a period of stagnating growth in new wind turbine installation, particularly in mature onshore wind markets such as Europe, the US and China. This dynamic shifts focus to increasing asset efficiency and effectiveness at existing sites for sustained profitability.

Third-party APM software helps you realize top-line growth potential by providing a realistic, accessible path to in-house monitoring, analysing, prognosticating, and acting on wind asset health data. With 57% of all WTG failures still unplanned, and costing 1.7% lost production, owners and operators need to anticipate bearings, blades, electrical component, and drivetrains component failures. After all, that downtime costs $34,000 US per WTG each year.

For each WTG, $34k are lost annually

  • $16k for spare parts and materials
  • $6k for major correctives
  • $5k for minor correctives
  • $1k for unplanned repair downtime losses
  • $6k for lost Annual Energy Production (AEP)[NS1] [NS2]

Proof from the Field

During a proof-of-concept for a major wind fleet owner and operator, the validation process of the Lumada APM solution indicated WTG failure six months ahead of occurrence, when other diagnostic tools didn’t indicate any potential issues. During the following months, the analysis of main bearing temperatures, normalized for ambient temperatures, were re-confirmed enabling the owner/operator to take preventive action. The savings of potential lost revenues was more than US$500 per day, per turbine, in addition to an unknown amount of collateral damage that may have occurred if the issue were not addressed.

How Hitachi Energy can help

Hitachi Energy’ Lumada APM for wind is a powerful solution that integrates decades of expert knowledge and domain experience with cutting edge AI capabilities to help you predict and optimize the performance of your specific assets across your entire asset portfolio – regardless of the manufacturer. Hitachi Energy’ Lumada APM allows you to insource O&M capabilities so you can have more control over your operations and comes at marginal cost when compared to prices for classical full-service contracts with performance guarantees. 

Learn more about how Hitachi Energy’s Lumada APM can help bring the profit pools in modern wind power back to your pocket.

Gian Schelling
Global Business Development Manager

Gian Schelling is Hitachi Energy’s global Business Development Manager for the Automation business unit. He is responsible for bringing our automation value proposition to clients and taking their feedback back into the organization for future product development. Gian looks back on 13 years experience from the Renewables industry. While he spent most of the time in wind power, developing global business out of various European countries for leading OEMs, his experience and responsibilities also include business development for battery energy storage and solar solutions. You can connect with him at LinkedIn.

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