Unplanned O&M costs to reach $8.5 billion this year

Onshore wind farm operators will spend nearly $15 billion on operations and maintenance (O&M) services in 2019, according to new research by analysts at Wood Mackenzie Power & Renewables (WMPR). Of this amount, 57% ($8.5 billion) will be spent on unplanned repairs and correctives prompted by component failures.

by Craig Richard 3 June 2019

WMPR forecasts $8.5 billion will be spent on unplanned repairs and correctives at onshore wind farms this year (pic credit: Duke Energy)

Advanced digital technology such as data analytics and machine learning enable sophisticated asset management and can help operators optimise maintenance costs, the analysts argued.

But adoption rates for these technologies are mixed, with many leading asset owners only deploying a basic form of digital tools to identify turbine failures.

Daniel Liu, a principal analyst at WMPR, said there were several reasons why wind farm operators did not use more advanced digital technology.

"Data analytics platforms need excellent historical datasets to produce quality forecasts and analytics. This can be difficult to obtain, due to organisational hurdles, the time required to digitise and data control by OEMs and other groups," he said.

"Some leading self-performing asset owners prefer instead to rely on their operational experience and heavy personnel engagement to manage assets, with some asset owners in North America shunning digital technology altogether."

"In quite a few cases, the basic economics do not always stack up for digital solutions," Liu added.

He said weighing up costs against benefits is "one of the key barriers to deployment for more sophisticated technologies".

In some cases, it can take seven years or longer for operators to see a return on the investment, Liu added.

Of the nearly $15 billion forecast to be spent on O&M worldwide this year, 57% ($8.5 billion) will be spent on unplanned repairs and correctives prompted by component failures, WMPR predicted.

Unplanned failures can cost up to $30,000 per turbine per year for repairs and spare parts, the analysts stated.

This cost does not include up to a week’s worth of lost production per year and production losses caused by pre-emptive shutdowns or long delivery times for materials, equipment and technicians.

Spare parts and associated logistics account for about half of direct costs associated with unplanned repairs, WMPR added.

Capital components alone – including gearboxes, generators and blades – can cost up to $10,000 per turbine per year in replacements.

Remote monitoring and diagnostics tools are widely used, but more advanced digital technology is underutilised, the analysts claimed.

"The issues of development, operational, and financial risk can only be solved by full stakeholder engagement with all parties," Liu said.