O&M expenses for wind-power assets will cost the industry about $7.5 billion annually by 2021, according to analysis from IHS Markit.

“The transition from CAPEX to OPEX is significant, and the wind industry will need to shift its focus away from infrastructure build and toward providing services and minimizing costs at existing projects,” Maxwell Cohen said in a press statement about the study. He is a co-author of the report and associate director with IHS Markit, a global provider of critical information and analysis.

In fact, the average age of installed wind capacity is predicted to rise from seven years in 2018 to 14 years in 2030, finds the report. “And as projects age, they cost more, making the O&M business even more intriguing than it is today,” added Cohen. Currently, more than 50,000 utility-scale wind turbines comprising nearly 100,000 MW of generating capacity are installed in 42 U.S. states and 12 Canadian provinces and territories.

One of the key findings from the IHS study: larger, newer wind projects have O&M costs averaging 25% less per megawatt-hour than ones using smaller turbines installed before 2010. More than 80% of the asset and operations managers who attended an ONYX InSight wind-turbine symposium held in Europe last summer agreed. The majority of delegates surveyed at the event said that larger and more efficient turbine technologies are the key drivers for reducing the wind industry’s LCOE or levelized cost of energy.

Participants also cited a need for higher-quality data to improve the reliability of their assets, which includes the consistent use of condition monitoring for early failure detection and advanced maintenance schedules. ONYX InSight, a joint venture between Romax Technology and Castrol, is a predictive analytics partner for wind asset owners and operators. Through the use of physics-based and data-driven predictive analytics, it provides wind operators with options for better control and reduced costs in their operations.

“A new generation of larger, more advanced turbines will mean more complex machinery, operating in harsher operating conditions around the world,” explained Evgenia Golysheva, Head of Consultancy at ONYX InSight, during her presentation at the 2018 symposium. “But it’s a mistake to think that all of these new technologies will be more reliable than their predecessors…or that operating costs will reduce naturally as the industry matures without an increased understanding and streamlining of operations and maintenance processes.”

While the focus on big data and advanced analytics has the opportunity to streamline O&M costs, it is of little value if wind operators are unable to properly access or effectively integrate it into their daily operations. It is also important that operators are aware of the advances in new O&M technology and services.

Here are just a few of the latest O&M products and trends in the industry.

• Improving wind-turbine O&M with AI
• Using thermal drones for detailed blade inspections
• A coating for more reliable wind-turbine bearings
• A ground-based habitat for blade repairs
• Detecting ice on turbine blades

Perhaps one of the most important suggestions for reliable O&M: have a plan. Unscheduled maintenance and unexpected downtime typically result in unplanned costs that may significantly hinder a project’s bottom line.

So regardless of the maintenance strategy used at a wind farm, take the time to plan one before operations begin.

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IHS offers key information and insight in critical markets that shape the business landscape, including in the field of renewable energy.

In this podcast, Michael and Max discuss the type of clean energy research IHS focuses on and some key insights related to wind power. They also explain the benchmarking service IHS offers wind owners and why it provides significant O&M data to wind operators.

The post Key insights and benchmarking wind energy with IHS Markit experts appeared first on Windpower Engineering & Development.

In 2021, the industry will reach a critical turning point, as operating expenditure (OPEX) for the North American (United States and Canada) wind industry will, for the first time, eclipse capital expenditure (CAPEX), according to the 2018 IHS Markit Wind O&M Benchmarking in North America: Aging Turbines, Rising Costs – a study of O&M costs for North American wind power plants. The report is part of the IHS Markit Wind Power Plant Benchmarking Service, which is designed to help the industry determine the optimal O&M strategy using concrete, standardized data of costs and performance.

The IHS Markit study comprises data from more than 325 wind projects, representing 34,000 MW of capacity and nearly 20,000 turbines installed in North America.

“The O&M market for North American wind installations is a steadily growing industry,” said Maxwell Cohen, associate director at IHS Markit, and co-author of the annual IHS Markit report. “Growth is driven both by more turbines and—as those turbines age—more spending per turbine. The North American wind turbine fleet is aging overall – the average age of installed capacity will rise from 7 years in 2018, to 14 years in 2030. As projects age, they cost more, making the O&M business even more intriguing than it is today, and many players are expanding into this sector of the business,” Cohen said.

Currently, more than 50,000 utility-scale wind turbines comprising nearly 100,000 megawatts (MW) of generating capacity are installed in 42 U.S. states and 12 Canadian provinces and territories. By the year 2028, IHS Markit expects those numbers to increase to more than 75,000 wind turbines with a capacity of more than 150,000 MW. But most of this growth will come in the next few years before federal tax credits expire in the early 2020s. As that takes place, wind capacity additions will decelerate. But OPEX will continue to grow, and as a result, is expected to eclipse CAPEX in 2021.

“The transition from CAPEX to OPEX is significant, and the wind industry will need to shift its focus away from infrastructure build and toward providing services and minimizing costs at existing projects,” Cohen said.

One of the key findings from the benchmarking study is that larger, newer wind projects have O&M costs averaging 25 percent less per megawatt-hour (MWh) than ones using smaller turbines installed before 2010.

“Not all projects are created equal, and larger projects’ costs increase less rapidly,” said Michael McNulty, research associate at IHS Markit and co-author of the 2018 IHS Markit study. “As we build on previous years’ benchmarking analyses, we’ve concluded the O&M costs per megawatt of larger projects are not only lower compared to smaller projects, but also demonstrate more cost stability as they age. Most of these larger projects benefit from economies of scale, potential procurement efficiencies, and lower exposure to individual turbine failures.”

McNulty said another key finding is that first-year O&M costs are on the decline as the industry continues to learn. “First-year costs fell from an average of $46,000 per installed megawatt during 2008 to 2013, to $38,000 per megawatt during 2014 to 2017,” McNulty said. “Average annual O&M costs generally start low in the first year of operations. There is a steady increase in annual costs per-megawatt after about three years, and a significant increase in per-megawatt-hour costs starting in year 10, when costs accelerate and performance deteriorates. Large projects are not immune to this trend, though the effect appears more modest for them,” McNulty said.

However, McNulty cautioned there can be a great disparity from project to project with age, location, and O&M strategy all being important factors. “The dataset shows differences in key performance indices of projects in different regions and from different turbine models. Fortunately, the dataset is vast – covering a third of the North American wind capacity – and allows asset owners to benchmark their own projects against similar projects and determine the optimal O&M strategy for their business,” McNulty said.

The IHS Markit study comprises data from more than 325 wind projects, representing 34,000 MW of capacity and nearly 20,000 turbines installed in North America. The data represent more than 150,000 turbine-years of operational history from more than 15 turbine original equipment manufacturers, allowing study participants to track projects and turbine performance over time.

“As operating costs increase, owners are focusing on performance optimization and cost management,” said Rafael McDonald, director, IHS Markit North American renewable power, the third author of the IHS Markit study. “Before this benchmarking study was established, there was no objective method for wind-asset owners to compare the performance of their projects against the market as a whole.”

“There is no one-size-fits-all strategy for wind operators as it relates to managing O&M costs,” Cohen said. “Our goal was to provide a comprehensive assessment of the entire O&M market, so wind asset owners can select the O&M strategy that best balances cost, convenience, and risk profile for their particular portfolio of wind projects.”

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