PO153

Minimize Levelized cost of energy by O&M Co-operation models

Dennis Schiricke
Outsmart/Deutsche Windtechnik, Velp, The Netherlands

Abstract

The offshore wind energy sector is maturing fast:
- Pioneer investors make place for long term investors like energy companies and pension funds;
- Subsidy supporting schemes are changing, leading to lower budgets and changing concession tendering systems.
- Large energy companies buy market shares and have more significance. Simultaneously, oil and gas industry players with a stronger risk appetite are entering the renewable market.
- Clustering of projects is noticeable at the Baltic sea and the North Sea.
- Offshore wind investors are looking for alternative solutions to make their investments viable and ensure a solid return on investment.

After the commissioning phase, the operations starts, warranties will be delivered by the wind turbine manufacturer and balance of plant contractors for a period of 2 or 5 years. It's common practice that these parties take care of the service and maintenance activities for the owner during the warranty period, for the first 5, 10 or 15 operational years. The main driver is to cover design, construction, and technology risks during the first period of operations. This risk mitigation comes with a price.
Are these risk mitigations leading to minimized levelized cost of energy?
A tailor-made O&M co-operation model with one dedicated partner will lead to an optimization of the operational expenditures, without compromising on the risks, thus minimize levelized cost of energy.

 

Method

After the commissioning phase, the operations starts, warranties will be delivered by the wind turbine manufacturer and balance of plant contractors for a period of 2 or 5 years. It's common practice that these parties take care of the service and maintenance activities for the owner during the warranty period, for the first 5, 10 or 15 operational years. The main driver is to cover design, construction, and technology risks during the first period of operations. This risk mitigation comes with a price.

Results

An alternative O&M model incorporates the optimization potentials, where an independent service partner discloses industry's best practices, lessons learnt, handbooks, standard operating procedures, and method statements to the market.
Having a high level and focussed 24/7 asset management team with state of the art IT tooling, leads to cost sharing on amongst others staff, material procurement, onshore facilities, and vessel use. The valuable spin-off is the acceleration of the learning curve of specific technology and a solid life cycle record which gives insight of performance killers and weak spots.

Conclusions

The delivery of the changed high-value O&M model transforms a service provider towards a project partner with increasing engagement. Taking over the guarantees and improving the logistical concept, while optimizing the logistical movements result in an increased project production and firm grip on the project performance. As a result of the changed O&M model, interface will be reduced and combined with optimal use of best practices. By sharing experiences from different projects and manufacturers, risks will be mitigated, costs will be lower and the internal rate of return will increase.

Objectives

This tailor made co-operation model will be the key to win concession tendering processes like Hollandse Kust Zuid in The Netherlands and upcoming European concession tenders.