Offshore renewables:

Minimising OPEX

Nantes, 21 May 2015

Bruce Valpy

Managing Director

© BVG Associates 2015

2/11

• Why focus on turbine reliability

• Reliability centred approach

• 10 steps to success

Contents

Justification

Offshore Renewables: Minimising OPEX

Introduction

© BVG Associates 2015

• BAV add

Selected clients

BVG Associates

• Market analysis and business development

• Supply chain development

• Economic impact assessment

• Support to industrialisation

• Project implementation

• FIT project development (UK only)

• SCADA & condition monitoring

• O&M technical support

• Technical innovation & engineering analysis

• Support to investment in technology

• R&D programme management

• Design and engineering services

3/11

• Why focus on reliability

• Cost of energy

• Health and safety

• Reliability centred approach

• 10 steps to success

Contents

Justification

Reliability centred approach during wind turbine development

Introduction

© BVG Associates 2015

• BAV add

Selected clients

BVG Associates

• Market analysis and business development

• Supply chain development

• Economic impact assessment

• Support to industrialisation

• Project implementation

• FIT project development (UK only)

• SCADA & condition monitoring

• O&M technical support

• Technical innovation & engineering analysis

• Support to investment in technology

• R&D programme management

• Design and engineering services

Cost of energy Basics

LCOE breakdown for project with 6MW turbines LCOE

Where:

LCOE Levelised cost of energy in £/MWh

= revenue needed (from whatever source) to obtain rate of

return W on investment over life of the wind farm

(tax, inflation etc. not modelled)

Ci Capital expenditure in € in year i

Oi Operational expenditure in € in year i

Di Decommissioning expenditure in € in year i

Et Energy production in MWh in year i

W Weighted average cost of capital in % (real)

= (cost of debt x % dept ) + (return on equity x equity portion)

n Operating lifetime of wind farm (baseline 20 years)

m Years before start of operation when expenditure first

incurred

i i year of lifetime (-m, ..., 1, 2, …n)

Project development and consenting up to FID

1%Project management and contingencies from FID

to WCD2%

Nacelle20%

Rotor15%

Tower5%

Foundation supply

11%

Array cables2%

Foundation installation

5%Array cable installation2%

Turbine installation1%

Transmission charges

20%

Unplanned service8%

Operation and planned maintenance

5%Other4%

Decommissioning1%

Operation maintenance and service

36%

Project 4%

Balance of plant supply

13%

Installation 8%

CAPEX 64%

Turbine supply 39%

4/11 © BVG Associates 2015

Source: BVG Associates

Why focus on reliability The case for focus on wind turbine reliability

Spend breakdown

© BVG Associates 2015

Wind farm OPEX

16% of LCOE

Unplanned Service

47%

Turbine ~90%

Foundation

Array cables

Other

Planned Maintenance

Operations

Transmission OPEX

If...

• If turbines were 100% reliable, so just needed visits for

planned maintenance...

• Wind farm OPEX reduced by 43%

• Lifetime expenditure reduced by 7%

• Lost energy due to turbine reliability reduced by 90%

• LCOE reduced by 11%

• Visits down 70%

• Accidents down by >80%

• Increased certainty would increase pool of investors

and decrease cost of capital

• Many innovations beyond

turbines, also…

5/11

Turbine electrical,

34%

Hub and pitch

system, 20%

Gearbox and main

shaft, 11%

Generator, 8%

Blades, 4%

Array cable, 3%

Support structure,

3%Other

turbine,

16%

Other wind farm, 2%

Source: BVG Associates

Lots good

Few components / systems tested thoroughly

Poor justification for component survival (beyond

calculations)

Main component exchange not designed in / tested

Not possible to easily replace wear parts

Poor / incomplete manuals and troubleshooting guides

Track record of unreliable systems / repeat faults

Training strategies not implemented

Site work records incomplete

SCADA report errors

Significant inefficiencies on site

Type Certificate (does not consider the above)

Why focus on reliability The case for focus on wind turbine reliability

Where our experience comes from

© BVG Associates 2015

Due diligence - experience

6/11

Reliability centred approach Important ingredients of reliability centred approach

1a. Reliability budget

© BVG Associates 2015

Turbine MTBF* = 3 months

(90 days)

Rotor 365 days

Blade

900days

Hub Assembly 600 days

Blade bearing 3650 days

Pitch System 450 days

Other 3650 days

Nacelle 200 days

Drive Train MTBF = 700 days

Gearbox MTBF = 3650 days

Generator MTBF = 3650 days

Converter MTBF = 2000 days

Other MTBF = 2700 days

Yaw system MTBF = 900 days

Control system MTBF = 700 days

Auxiliary systems MTBF = 900 days

Tower & Transition Piece

300 days

10 Steps to success

1. Reliability and OPEX

budgets (and model)

* MTBF (large vessel intervention, small vessel

intervention & remote reset)

7/11

Reliability centred approach Important ingredients of reliability centred approach

5. Demonstration of maintenance procedures

© BVG Associates 2015

10 Steps to success

2. ‘Rules of thumb’

1. Reliability and OPEX

budgets (and model)

4. Test and verification

3. Component reliability

reviews

5. Demonstration of

maintenance procedures

8/11

Reliability centred approach Important ingredients of reliability centred approach

6. Joined up SCADA/control/CM

© BVG Associates 2015

10 Steps to success

2. ‘Rules of thumb’

1. Reliability and OPEX

budgets (and model)

4. Test and verification

3. Component reliability

reviews

6.

Joined up SCADA/

control/CM

5. Demonstration of

maintenance procedures

Holistic

decisions

CMS Engineering

9/11

Reliability centred approach Important ingredients of reliability centred approach

9. Fix first time approach

© BVG Associates 2015

10 Steps to success

2. ‘Rules of thumb’

1. Reliability and OPEX

budgets (and model)

4. Test and verification

3. Component reliability

reviews

9. Fix first time approach

8. Useful, accurate data

7. Feedback from site

6.

Joined up SCADA/

control/CM

5. Demonstration of

maintenance procedures

10/11

Reliability centred approach Important ingredients of reliability centred approach

10. Reliability champion

© BVG Associates 2015

10 Steps to success

2. ‘Rules of thumb’

1. Reliability and OPEX

budgets (and model)

4. Test and verification

3. Component reliability

reviews

10. Reliability champion

9. Fix first time approach

8. Useful, accurate data

7. Feedback from site

6.

Joined up SCADA/

control/CM

5. Demonstration of

maintenance procedures

Bill Shankly, Liverpool Football Club

11/11

Thank you

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