The question of what a project life cycle looks like seems relatively easy to answer, often being broken down into four phases; development, warranty, post-warranty and end-of-life. The more interesting question around the life cycle is when should Operations & Maintenance (O&M) start? The easy answer is …at the beginning. From project inception through to end of life, O&M strategy and execution must be considered, developed, tested, refined, and continuously improved.
In the past decade, service offerings have evolved, choices of service provider have increased, self-perform and hybrid solutions have become the new trends and OEM contract terms have gotten longer…but has O&M improved?
Whether modeling O&M costs, commissioning a development, selecting a warranty product or procuring an O&M package, an owner should ensure they fully understand the value and risk profile of their project over time. An owner should seek to make choices that are based on knowledge, avoiding the perils that come with long term commitments that lock an owner in to one solution that oversells perceived risk transfer and under-delivers on value.
3 lessons on O&M strategy that will improve your project:
1) Get it right from day one
- Model O&M costs with multiple experts …a range of ideas and solutions will unlock your project’s potential.
- Select your O&M strategy but keep your options open by avoiding long term commitments that don’t allow for recalibration based on technological innovations. O&M continuously evolves and improves, an overly long term commitment (greater than 5 years) means you miss opportunities to improve your returns. While long term commitments may appear attractive because they provide price certainty, it is important to recognize that this certainty has a cost that will reduce potential enhancements on project ROI. Look for long term commitments that offer re-calibration and innovation.
- Prepare for long-term reliability and optimum performance by defining key performance indicators for the project. Determine which data will be used to calculate those indicators. Control quality from day one to the highest standards …it takes years to recover from poor development and commissioning.
2) Optimize warranty value
- Shadow the OEM during the warranty period by tracking service activities and turbine performance …don’t wait to be told what is happening …own that knowledge with first hand insight that allows you to control your project’s destiny.
- Ensure break-in maintenance is completed on time and to the highest possible standard
- Anticipate serial defects by pre-defining all common failure modes on critical components. When one of those failures occur, perform an independent root-cause analysis immediately.
- Manage your warranty claims throughout the entire warranty period to prevent being stuck in warranty/service contract negotiations in the last 6 months that effectively force the signing of an extension agreement that promises to deliver on what you already paid for in the first place!
3) Optimize performance
- Benchmark for best practice …look for real examples, innovation and proven results.
- Implement a reliability centered maintenance program, building on historical observations from many wind turbines temperature and vibration data.
- Investigate techniques such as machine learning for predicting major events, identifying changes in performance and minimizing lost production.
- Calibrate your O&M strategy with regular market testing and refine your approach …this is where you must avoid long term commitments or ensure the O&M contract allows for recalibration based on O&M developments and innovative technologies.
- Understand your risk profile …with your data, model component failures and probabilities and make sure you are transferring the right amount of risk for the right price.
In the end it comes down to making decisions, regardless of the O&M path selected, that are based on fact, knowledge, and a deep understanding of your project. What I like to do, is talk to my customers about transparency, independence, innovation and long term relationships that come through the delivery of value certainty rather than just giving contractual commitments with long term fixed price.
Value is derived from an open approach, expertise and results …in other words, more production, lower costs, and longer asset life. It does not come from hidden improvements that only lower the service provider’s costs, or from high fixed prices for risk transfer that is way beyond the most likely P50 outcome.
Liberate your data, understand your asset, find a service partner and optimize the value of your project throughout its life.