Solar operators steer new designs as performance demands grow

Solar operators are playing a growing role in project development and seeking greater control of operational risks to meet rising performance targets, industry experts told the PV Operations Dallas 2019 conference.

Solar plant owners face continued price pressure in the coming years as tax credits fall away and expose assets to market prices. 

Developers and owners are placing increasing importance on full life-cycle costs and seeking greater value from operations and maintenance (O&M) services.

A recent study of U.S. PV costs shows that design and operational innovations are having a significant impact on O&M costs.

One-axis tracker utility-scale PV O&M costs fell from $20/kW/year in Q1 2017 to $14/kW/year in Q1 2018, including inverter replacement costs, the National Renewable Energy Laboratory (NREL) said in its latest annual U.S. Solar Photovoltaic System Cost Benchmark report.

Fixed tilt utility-scale PV O&M costs fell from $17/kW/yr in 2017 to $13/kW/yr in 2018, the study said.

O&M companies are now getting involved earlier in the development process and looking to take control of more activities during the operations phase to reduce downtimes, industry experts told the conference in Dallas on April 16.

These advances are set to lower life-cycle costs and help owners tackle emerging market challenges.

Lifetime focus

O&M teams are now being consulted ahead of construction to improve design decisions and contractual arrangements.

Developers with large operational fleets are able to feed back performance data to development teams to improve new plant designs and O&M strategies.

"We've amassed so much data over the last couple of years, both quantitative and anecdotal data," Kyle Cooper, Vice President of O&M at Cypress Creek Renewables, told the conference.

Cypress Creek develops, owns and operates plants and has an installed solar capacity of over 1 GW.

"In the last six months we've completely rewritten our EPC [engineering procurement contractor] scope, our data management scope,...We are really diving into the types of equipment people are providing," Cooper said.

O&M teams are used to improve cost estimates for design choices, Brock Taute, Renewables Project Engineer at Invenergy, said.

Invenergy has developed over 22.2 GW of power generation projects and operates over 7 GW of wind, solar and gas-fired power capacity in the U.S. and 3 GW in other countries.

Brock gave the example of above-ground cable layout options, which can impact vegetation management efficiency and requires O&M expertise.

"You get everybody together to decide what the total cost implications of everything are," he said.

Invenergy also asks vendors to provide a forecast for the timing and cost of component replacements during the development process, Brock noted.

"So we're not just looking at the initial cost but the total cost down the line," he said.

                               US solar O&M costs by category (2018)

Source: National Renewable Energy Laboratory.

O&M costs will continue to fall as developers place more emphasis on the full lifespan of the project in plant designs, Andy Walker, Senior Research Fellow at the National Renewable Energy Laboratory (NREL), told New Energy Update in February.

Going forward, advanced designs will include improved site water run-off measures, better wire management and enclosure types, and the use of elevated equipment pads, he said.

Offtake risk

To boost efficiency, the solar and wind industries have shifted towards production-based availability guarantees, rather than time-based availability metrics. Owners are looking to place more performance risk on operators and suppliers, to better align overall revenue goals.

As the solar market matures, a growing variety of offtake requirements and additional market responsibilities are adding complexity to O&M strategies.

In addition to component considerations, O&M strategies need to take into account the operator's power purchase agreement (PPA) and ancillary grid commitments, including interconnection agreements and voltage, Joe Brotherton, Chief Operating Officer of Miller Bros Solar, an independent O&M provider, said.

"When you have to also now add voltage schedules, power forecasting... It's no longer boots on the ground and who can fix my inverter, it's who can do the whole scope of work to actually operate the power plant," Brotherton said.

Investors and owners must be prepared to move away from standard form O&M agreements which may not be entirely relevant for the project, Cooper said.

"Involving your O&M provider in that contract negotiation to really delineate what the scope is, whether it's your PPA requirements or maintaining inverters, is really critical," Cooper said.

EPC restrictions

O&M providers could provide further value to projects by performing fixes to ground fault issues which typically require visits from EPC groups under warranty arrangements, Brotherton said.

Service companies could perform the work faster than EPC groups, reducing asset downtimes, he said.

"An owner is waiting a week, two weeks because there is no teeth in the EPC warranty," Brotherton said.

Owner-operator Cypress Creek benefits from having its own EPC division. It can be harder for service providers to negotiate flexible terms with third-party EPC groups.

"As an owner you get the option to really push the EPC provider. As an O&M provider I can say you should do that, you should ask for response times from your EPC and say that if they cannot respond within X time, the O&M provider should be up to step in and do that repair and then bill back to the EPC at an undisputed rate," Cooper said.

"We just need to have reasonable ways in which we can respond to site issues so that we can maximize production," he said.

Controlling risks

Operators must have plans in place for critical parts replacement, even in the warranty period, to reduce downtimes and maximize plant revenue, experts said.

"From an owner's perspective...very rarely do we allow the warranty process to play itself out," Natalie Clark, Project Manager at Southern Power Renewable Operations, said.

For example, following a transformer failure, Southern would typically deploy a third-party subcontractor to install a spare while the manufacturer fulfils its warranty obligations, performing tests before it sends a new unit to the site, Clark said.

"You have to have a strategy and a plan in place to make sure you are meeting all of your PPA obligations, to make sure you are getting the site back up and running...You just kind of have to let the warranty play out on the side, in parallel with the work that you are doing at the site," she said.

Original equipment manufacturers (OEMs) do not have the same incentive as the owner or the operator to get the system back online, Cooper said.

"I think it's more incumbent upon us to be training our technicians to be able to do that advanced troubleshooting, to be able to secure spare parts and be ready to pull that destiny into our own hands as equipment comes out of warranty," he said.

O&M providers can look to form agreements with manufacturers that accelerate maintenance without voiding warranties, Brock said.

"Sometimes you can convince the OEM to be able to let you train your engineers so that they can actually go out and perform the technical duties themselves and not void the warranty in that process," he said.

New Energy Update