Analysis: Bard1 transmission problems could prompt payout

GERMANY: The owners of the 400MW Bard 1 project could be due a multi-million payout following a series of outages resulting from transmission problems.

After five unplanned outages since the beginning of 2014, the BorWin1 cable system connecting the 400MW Bard Offshore 1 wind farm to shore suffered another outage of several hours on 1 June due to problems with the seawater system.

According to operator Tennet offshore 1, the wind farm was unable to feed in power from 9.31am to 10.25pm that day. Bard 1 is owned by project company Ocean Breeze, which in turn is owned by HypoVereinsbank, part of Italian bank UniCredit.

Previously, on 23 March, a technical problem on the converter platform caused a smouldering fire that damaged a condensator. The fire was extinguished when the network connection system was switched off, according to Tennet.

The transmission system operator cooperated with offshore station project company Bard Offshore 1 to investigate the wind turbines, the wind farm transformer station and the AC/DC converter platform to locate the problem. The outage continued to the last week of May.

Thanks to a revision of the Energy Industry Act that took effect at the end of 2012, Bard Offshore 1 can expect compensation. If electricity feed-in is not possible for more than ten consecutive days due to a cable outage, from the 11th day the offshore wind farm operator can claim 90% of the lost feed-in payments.

If the cable problems occur on more than 18 days in the year, the operator can claim the payments from the 19th day. The long outage from 23rd March to May, as reported by Tennet, amounted to around 67 days, so compensation should be due for up to 57 days, or 1,368 hours.

Assuming the project would have operated at 40% efficiency (equivalent to 3,500 full load hours per year with 8,760 hours) over the 1,368 hours of outage, it would have generated up to 219,000MWh ( 1,368 x 400MW x 40% ), which at the current feed-in- tariff of EUR 190/MWh was worth EUR 41.6 million. Bard Offshore 1' s compensation could amount to 90% of the sum or up to around EUR 37 million.

This amounts to nearly 14% of Bard Offshore 1's annual revenue of around Eur 266 million assuming 3,500 full load hours per year and the current feed-in payment of EUR 190/MWh.

Converter problems

Whether the Bard Offshore 1 operator played a role in the converter platform problems is not clear. But the BorWin 1 converter platform problems may have triggered a new insurance product from industry insurance broker Marsh. A third party liability insurance was placed with a German North Sea offshore wind park, it said 20 May, but declined to reveal the new client's name to WPM.

Amongst the aspects covered, if the insured wind park operator company accidentally causes damage to the high voltage direct current ( HVDC) converter platform, it is held free of any damages claim by the network operator, Marsh said.

Failure of HVDC undersea cables systems where no alternative transmission route exists is a risk dogging not only the offshore wind sector, and not all problems occur at sea. The NorNed HVDC electricity trading cable between Norway and the Netherlands failed 28 October 2013 because of storm damage to a part of the roof of the onshore converter station at Eemshaven.

Roof pieces were torn off, and water that entered the building damaged a part of the converter system, Tennet reported. NorNed was out again 19 March 2014 due to a defective isolator at the converter station on the Norwegian onshore side.