Coming to grips with post warranty costs in a diligent manner

Accurate knowledge of the condition of the rotor blade at end of warranty (EOW) is critical for understanding and estimating post warranty costs. Owners and operators must plan EOW inspections sufficiently in advance of warranty expiry. We look at how...

By Ritesh Gupta

The procuring of a wind turbine is generally marked by a warranty with a validity period of up to five years. It is recommended that once such period is about to complete, the owner/ operator should plan out an end of warranty (EOW) assessment on their rotor blades before concluding how the turbines are going to be serviced and maintained in the future. 

Understanding the condition of the rotor blades at EOW, and knowing the expected future repairs based on an assessment of the local conditions, discussions with other owners/ operators of the same type, and in-house and independent service provider (ISP) expertise will allow the owner/ operator to establish a comprehensive and effective inspection and maintenance schedule. This schedule should be based on the recommendations of the specific original equipment manufacturer (OEM), and modified based on the findings from EOW and earlier research discussions.

Early discovery of minor defects allows for re-inspection and/or repair to be scheduled as part of routine maintenance and during the most favourable weather conditions, thereby decreasing turbine down-time resulting in increased turbine availability. Major defect discovery at an earlier stage also presents the opportunity for cost savings as the scope of repair is smaller, reducing the related costs for access to the rotor blade, and potentially preventing catastrophic failure of the rotor blade.

Approach 

Knowledge of the condition of the rotor blades prior to post warranty operation to more accurately estimate post warranty costs, says Chris Wraith, engineer, Complete Wind Corporation. 

“Most often this knowledge is not fully obtained until EOW, so it is important to schedule these inspections with sufficient time available to be able to react to the inspection findings,” says Wraith. 

Wraith adds that additionally, a review of the OEM’s operations and maintenance records, and if available, the Continuous Monitoring System (CMS) records, should be performed. This review will highlight the existing trends in maintenance and inspection, which can then be evaluated, as well as provide a record to reference against the findings from EOW Inspections. 

Once the condition of the rotor blades is fully understood, a thorough and comprehensive analysis can be performed on who should be selected to perform post-warranty operations and maintenance.

The options are:

1. In-house service

2. Independent Service Provider 

3. OEM

Relying on Financial Set Up

Alexander Groeber, director global service, AMSC says the post-warranty O&M approach should depend mostly on the financial setup of the project. For instance, a large wind project may require bank involvement, and therefore the developer is looking for lower interest rates.

Lower interest rates can be obtained by optimised out-sourcing of all O&M risk to a partner – or the turbine supplier – right from the start of the project. The interest rates will be lower if the 10 or 20 year fixed-rate service contract includes parts and insurance as part of the project. The developer will pay more for O&M services, but the entity will know what it will earn during the lifetime of a turbine. 

On the other hand, in a smaller project, the owner of the wind farm may self-finance the project, and therefore it may make the most sense to be independent and not be involved in an out-sourced O&M strategy. With that strategy, it is still important to identify a professional, skilled O&M partner at an early stage, but the contracted periods should be kept limited in time, says Groeber. 

Groeber shares that there are a variety of contracts available within the wind industry. A contract could start with limited remote monitoring and regular maintenance service and evolve into a full service contract that includes all necessary parts and insurances. 

“When looking at post warranty costs, it’s important to consider the cost of not producing energy. The loss of energy due to a weak O&M set up can end up costing more than a service contract,” he says.

Post Warranty Costs 

Two of the most common post warranty costs related to wind turbine rotor blades are:

1. Leading Edge (LE) Erosion Repair

2. Lightning Strike Repair

Wraith explains that in highly abrasive environments, such as areas with a lot of soil turn-over due to farming, areas with fine/sandy soil or beaches and even areas with high yearly rainfall, leading edge erosion can be expected within the first 3–5 years of operation, regardless of initial rotor blade quality.

Failing to properly inspect for and address this defect at an early stage will lead to increased repair costs, and if allowed to progress to an advanced stage, may directly affect the safe operation of the wind turbine.

He also says that wind farms located in areas where electrical storms occur at a higher frequency are much more susceptible to increased lightning strike damage. Understanding this weather pattern prior to wind farm construction may provide the owner with an opportunity to purchase a more robust Lightning Protection System (LPS).

“If this option is not available, then additional costs can be expected through increased inspection and repair. Ensuring that drain holes remain open, that the LPS remains connected and that lightning strike damage is repaired early, however, will likely lower long-term repair costs,” says Wraith. 

He further adds, “Though wear and force majeure are major related defects which greatly influence post warranty operations and maintenance costs, the expected rotor blade manufactured quality is also a critical factor that must be considered.”

Owners and operators are encouraged to speak with other owners and operators, review other wind farms within their fleet if available and speak with ISP’s to discuss how the expected rotor blade manufactured quality may affect post warranty operation costs. If no or only limited information is available, then performing a manufacturing audit, incoming inspection and full scale EOW inspection will help to fill in the blanks with regards to these costs.

Decision

The results of the audit and inspections may also affect the choice of who should perform post warranty operations and maintenance. If an owner/operator is aware of potentially high post warranty costs due to OEM serial issues, it may be impossible for them to leave the OEM for post warranty operation due to the high expected costs. 

Conversely, if the OEM has demonstrated high competence during warranty operation, backed up through EOW inspections and completeness of inspection and maintenance records, then the expected higher OEM costs for post warranty operation can more easily be justified.

Avoiding Common Mistakes 

Owners and operators that sign on to long term service agreements (LTSA’s) are often unclear as to the full scope of these agreements. In many of these agreements the rotor blades themselves are not included. Additionally, in cases where the blades are included as part of the LTSA, in many instances where the owners and operators have had independent service providers perform third party rotor blade inspections, it becomes apparent that either inspections were not performed or that the inspectors performing the inspections did not have the specific knowledge to understand what they were looking at or for. 

As the technicians have the most common access to the turbines, regular quality audits of their inspection records will ensure that they provide the value paid for by the owners and operators, says Wraith.

Accurate knowledge of the condition of the rotor blade at EOW is critical for understanding and estimating post warranty costs. Owners and operators must plan EOW inspections sufficiently in advance of warranty expiry so that the scope of inspection can be changed in the event that serious defects are discovered, and to allow for a complete review of the quality of the operations performed by the OEM during the warranty period.

Wraith recommends that owners and operators must also ensure that once the critical defects discovered during the EOW Inspections have repairs planned and performed, quality assurance of these repairs is also performed. Most OEM’s offer only an additional one year warranty on repairs, so it is imperative that the repair procedures are adequate and that the repairs performed are of sufficient quality. Otherwise owners and operators may be stuck with future re-repair costs.