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United States

US O&M spending to reach $6 billion by 2025

UNITED STATES: Annual spending on operations and maintenance (O&M) in the US wind industry will double from just under $3 billion this year to nearly $6 billion in 2025, accounting for 29% of total capital expenditures in the sector.

In a new report, the consulting firm IHS Emerging Energy Research says it expects O&M spending to grow at a 5.5% compound annual rate as total installed onshore capacity grows from 47GW at the end of 2011 to a projected 127GW over the next 14 years.

IHS EER North American Wind Energy Advisory program associate director, Matt Kaplan said: "O&M strategies are increasingly vital to improving the operational performance and bottom line of a wind owner’s collective investment."

The growth in spending is making the market for O&S services more competitive, the report says. Large wind owners are bringing more of the work in-house to leverage economies of scale.

Additionally, turbine manufacturers are aggressively expanding the O&M side of their businesses to help make up for an expected drop in orders after this year. At the same time, a host of independent service providers are entering the business.

The competition is driving companies to offer new types of products aimed at improving project output. Kaplan added: "The industry’s intense focus on O&M today will ultimately result in more cost-effective methods for managing and maintaining wind projects, driving down the overall cost of wind in the future."

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