It is widely acknowledged that no entity has greater technical knowledge on the wind turbine, in terms of design, recommended service requirements and intervals, current condition of the wind turbine and fleet/ platform wide operating issues/ concerns when going into post warranty than the OEM.

This knowledge is tough to replicate and as such, the OEMs are able to price this value-add into their O&M costs.

A section of the industry also acknowledges that additionally with OEMs it is generally very difficult to get detailed specific maintenance records for the turbine, so the owners and operators do not generally gain much technically by continuing with the OEM. However, as the OEM has the greatest technical knowledge, the owner and operator generally assume less technical and financial risk, either through the availability of contracts provided as part of the O&M agreement or knowing the O&M performed falls in-line with the OEM recommendations.

Post warranty expiry: what are your options?

Project owners are presented with three options post expiry of main warranties: Renew the O&M agreement with the incumbent wind turbine OEM; Take the O&M function in-house; or, Award a contract for O&M provision to an independent service provider (ISP).

OEM

Talking about these options in detail, Matthew Burt, senior vice president - Operations at RES Americas says that the pros for renewing with a good OEM include good procedures for all activities, good technical and safety training, parts availability, technical / engineering support, SCADA support, expert monitoring / reset, and condition monitoring expertise. However, he points out that not all OEMs offer this. The potential to extend the original warranty period could provide motivation for the OEM to agree with reasonable end-of-warranty requests, and a reduced risk profile. Keeping with an OEM also maintains a good relationship between the two parties while the keeps operational overhead to a minimum.

In-house O&M

Burt giving another point of view, Hurt explains that the considerations for renewing with an OEM which could include high T&M (time and materials) pricing. He also points out the pros for self-performance, which include not paying a profit margin to another company, providing you have a big enough fleet to service. With this model, you have full control over safety and operational procedures, says Burt, and the operator and owner are financially better aligned. This option also offers the ability to combine turbine and BOP management functions. Other advantages include having more staff, with better out-of-hours support functions. This also offers the ability to get rid of a poorly performing OEM.

The other side of the coin could mean the owner takes on more or even all the risk, there may be challenges related to parts availability on the newer turbine models, and self-performance creates the need for in-house support staff/ functions, including a 24/ 7 desk to perform turbine resets. For smaller companies, the overhead needed to support reliable operations maybe too great.

ISP

On the ISP option T&M pricing is often more competitive because they are experienced in many turbine types, have a reasonable set of procedures, and the ability to add trained resources as needed to complete jobs. ISPs usually have a good parts supply network, offer some engineering functions, and staff trained in high voltage work, which allows the ISP to manage BOP as well as turbines. ISPs will offer some levels of guaranties and take on some risk. ISPs may be a good option to replace an OEM if self-performance is not a viable option. Having ISP’s in the equation also makes the market more competitive.

Cons of using an ISP however include a lack of experience with new models, lack of part supply for new models, training programmes can vary in quality, they often take on less risk than an OEM, and not all ISPs provide the same quality of work. The ISP may not cover all the functions your OEM did, so it should be noted that more support staff will be needed.

Chris Wraith, engineer, Complete Wind Corporation mentions that performing in-house O&M requires a team of knowledgeable and dedicated technicians and background technical experts.

“In many cases this is performed as a more hybrid model involving input from both the OEM and ISP’s. The primary reason for this is the difficultly in amortising the cost of having reserve knowledgeable and dedicated technicians and technical experts unless there are multiple wind farms using the same or similar technology,” he says.

Wraith adds that ISP’s generally provide a middle ground option to the owners and operators, as they do not have the same technical knowledge for the specific platform, but generally possess greater industry wide information with respect to different turbine platforms. To make the ISP model work though, their knowledgeable and dedicated technicians and background technical support teams are able to service multiple turbine platforms and have generally quicker response times to unscheduled turbine events.

Being prepared

Owners and operators are also encouraged to ensure that as much information as will be required to operate the turbine post warranty is provided as part of the project deliverables. This does not mean that an owner and operator will outright perform long term O&M on their project but it provides the information required to perform this if they can develop a cost-effective strategy and team; the ability to audit the work being performed by the OEM during the warranty stage; and this information can be critical in selecting a post warranty O&M provider.

“Some owners and operators know at the time of turbine purchase who will provide the long term O&M. This could be an in-house, the OEM as a result of the signing of a long term service agreement or an ISP, and in some cases it is already decided that some form of a hybrid solution. These owners and operators generally have considerable experience within the industry. The most important part of any strategy is ensuring that the costs laid out with the pro forma for long term O&M match the project reality so the economic feasibility of the project remains throughout the project life,” says Wraith.

The industry shift towards more predictive and preventative maintenance models and practices from reactionary is a sign of industry maturity. The metrics used to generate the model and recommendations will continue to evolve, especially as greater cooperation occurs between owners and operators, OEM’s and ISP’s.

Lastly, whoever is selected to perform the O&M, the scope of supply must be clearly understood and a gap analysis be performed to ensure the scope of supply meets the project requirements.

Decision-making

Burt says all options for contracts after main warranties expire should be assessed properly. He says if your technology is newer and the ISP market has not yet broken into that platform, then the OEM would become more optimal. If your technology is older, then ISP potentially becomes more optimal.

Out of the pros the cons the keys factors to consider would be safety, having properly trained personnel and comprehensive safe work procedures; risk and understanding your own risk appetite. If risk is more of a concern this could be mitigated up to 5 years by insurance products, or 1- 5+ years by OEM warranty extensions.

It is also vital to understand the full expected cost, some options may be too expensive for the project to support. If O&M cost certainty is more important, then again warranty-type products can help manage this.