Uncovering the true cost of a project

WORLDWIDE: In my early days as a design engineer at a rural technology development centre in South Africa, I was faced with the challenge of addressing frequent bearing failures on the fan units of a machine used to remove the hulls from local grain sorghum, a drought-resistant staple food. The diesel-powered hammer mill and hull-removing package offered a popular alternative to labour-intensive manual stamping.

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"Mill owners have been coming to us with failed fan units for some time," my then boss told me. "We suggested these failures were isolated incidents and sold them identical replacement units. Now we are in big trouble as the mill owners have organised themselves and discovered the full truth," he added.

While I did not feel sorry for him, I duly set off to find the causes of the failure and identify a remedy. The off-the-shelf steel rod used for the fan shafts turned out to be the root cause of the problem. A faulty tolerance field made the shaft slip inside the bearing inner race during rotation, causing overheating, under-lubrication and ultimately catastrophic mechanical failure.

The new design — taking into consideration the very dusty operating environment in a shed — was an enclosed integrated bearing housing with a machined shaft. Manufacturing costs of the new fan design turned out to be substantially higher than the original solution, but, most importantly, the units did not fail anymore.

Small-scale rural post-harvesting equipment is hard to compare with large high-tech wind turbines, but there are some interesting parallels. The former is typically used seasonally and is affected by different variables and local circumstances. It faces a significant degree of change during the days, weeks, months that it is in operation. Wind turbines, by contrast, easily operate more than 7,000 hours all year round during their 20-year operational design life. Downtime hours, once lost, cannot be captured later.

But what wind turbines and modern equipment in rural Africa have in common is the challenges linked to complex logistics, timely availability of parts and skilled personnel. This places high demands on the design quality and ruggedness, reliability and serviceability of the installation. The shared goal is to minimise downtime and loss of production and income for the operators.

Another interesting parallel, which continues to raise controversy in the wind sector, is the relationship between costs based on investment per megawatt and the cost-of-energy performance of an installation in its lifetime (CoE, cost per kilowatt hour over 20 years).

Earlier this year I attended the grand opening of a rotor-blade testing facility in Germany. A guest made some informal comments critical of a wind-turbine make that has a reputation of being expensive. I asked the expert whether he thought it correct to judge turbines based on their price per megawatt only, instead of attaching at least similar weight to CoE aspects. He immediately agreed. I was pleased he did. It is not unusual for even senior wind experts to focus only on investment costs while they really should know better.

Future impact

The facts speak for themselves. Assume two comparable 6MW offshore turbines, the first a proven commercially available model costing €10.5 million, the other a newly developed product 15% cheaper. The price difference can be eaten up entirely if the cheapest turbine is down for a couple of months at a time in the initial years during the windiest season in the North Sea.

Cheaper products are not by definition inferior to more expensive equivalents. A recent online business article elaborated on the possible impact of cheaper turbines by China’s suppliers Sinovel and Goldwind on future world market rankings. One industry opinion was that the Chinese suppliers would counter customers’ quality concerns and erode the sales and margins of their US and European rivals. Another suggested that a developer shift to Chinese suppliers could drive down the cost of wind power enough for it to compete with coal and natural gas.

Someone else said Chinese firms would face challenges taking overseas market share and be unable to provide long-term maintenance. One noted that while Chinese companies are producing at Chinese standards, the banks finance projects based on German standards.

I could not help being disappointed by the meagre attention given to factors affecting CoE, including the generating potential per megawatt, a proven track record and reputation for reliability, good performance in installation, operations and maintenance.

The most valuable lesson here is that experience is invaluable and companies should nourish and use it to the full. However, in a highly innovative industry, they should be open to innovation and quality amidst continuous change and competitive pressures.

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