Global onshore wind operations and maintenance costs will reach nearly $15bn in 2019, according to a report by Wood Mackenzie Power & Renewables.
More than half of the costs – 57% or $8.5bn – will be spent on unplanned repairs caused by component failures, the report said.
Wood Mackenzie Power & Renewables principal analyst Daniel Liu said the decline in tender prices for new projects had “sharpened the focus on operational expenditures for wind power plants and asset owners are searching for new solutions in an effort to reduce O&M costs”.
He said: “Unplanned failures can cost the asset owner as much as $30,000 per turbine per year in terms of repairs and spare parts and up to seven days worth of lost production per year – not including production losses caused by pre-emptive shutdowns or long delivery times for materials, equipment and technicians to the affected turbine.
“Spare parts and associated logistics comprise approximately 50% of the direct costs associated with unplanned repairs.
“Capital components alone – gearboxes, generators and blade – can cost up to $10,000 per turbine per year in replacements.”
The report said that there are a growing number of digital tools for operators to carry out remote monitoring and diagnostics that allow more sophisticated asset management.
However, the uptake of such technology is mixed, the report said.
“Many of the leading asset owners only deploy a basic form of digital technology and cases of full digital ecosystem deployment are rare,” said Liu.
Data analytics platforms need excellent historical datasets, which can be difficult to obtain, to produce quality forecasts and analytics, the report said.
Some asset owners prefer instead to rely on operational experience and personnel engagement to manage assets, with some owners in North America shunning digital technology altogether, it added.
Liu said: “In quite a few cases, the basic economics do not always stack up for digital solutions.
“Deployment costs for retrofitting a complete ecosystem to existing fleets and operations ranges into the hundreds of thousands of dollars per site.
“While CMS, drone inspections, and performance monitoring have proven use cases and are widely deployed, the cost versus benefit equation is one of the key barriers to deployment for more sophisticated technologies – with some having a payback period up to seven years or longer.”
He added that the onus must be on the technology vendors to encourage uptake of more sophisticated digital technology beyond basic monitoring and production forecasting.
“Determining the right strategy to push digital technology uptake requires an understanding of asset owner needs and risk appetite,” he said.
“Each type of vendor has a preferred business model, and each model is better suited for a certain asset owner class that encourages uptake of digital technology,” Liu added.
“New entrants have considerably less resources and operational history, making their products a riskier proposition for asset owners. Start-ups with innovative technology may find their way to success via acquisition with both OEMs and self-performers.”
The future successful use of digital technology will require navigating key hurdles for each stakeholder, the report said.
“The issues of development, operational and financial risk can only be solved by full stakeholder engagement with all parties,” added Liu.