There are now hundreds of thousands of wind turbines in operation across the globe, all of which require maintenance. If operators choose to extend the existing turbine lifetime from 20 to 25 or even 30 years by refurbishing rather than repowering, the market for maintenance will continue to grow.
There are indications that maintenance costs for newer onshore turbines have fallen over recent years, but there are many factors that hinder comparisons.
Even to establish the precise number of turbines currently generating electricity is not easy. According to the Global Wind Energy Council, citing data from Navigant, there were around 241,100 active turbines at the end of 2013, more than a quarter of them in China.
The rapid growth in onshore wind over the past few years means most of those turbines are relatively new. By the end of 2014 there was approximately 370GW in the ground around the world, compared with 159GW in at the end of 2009. That means the 211GW installed since then, or 57%, is no more than five years old.
The maintenance market — often expressed as an annual cost-per-megawatt figure - for turbines installed up to 2009 is worth around €4.45 billion a year based on a rough cost of €28,000/MW/year. The 211GW of capacity added since 2010 accounts for around €3.65 billion (€18,000/MW/year), giving an estimated annual global maintenance spend of around €8 billion.
The maintenance costs used in this calculation were cited in April 2013 by Petr Svoboda, a senior adviser at German energy consultancy BET, and provide average maintenance costs for newer turbines (between two and four years old) with an average capacity of 2MW, and for older turbines (eight to 11 years old) with an average capacity of 1.2MW. Measured as costs per kilowatt hour, maintenance and repairs accounted for €0.014/kWh for new turbines and €0.024/kWh for older turbines.
Svoboda notes that as a turbine ages, the number of full load hours per year is likely to fall, resulting in higher specific costs of maintenance. On top of that, older turbines were designed at a time when wind conditions and their impact on turbines was not as well understood as today. The older machines therefore suffer from more wear and tear, and maintenance costs can rise sharply after ten to 15 years of operation.
Service contracts therefore range from those offering an intensive maintenance schedule bringing higher output at higher cost, to minimum-care contracts that cost less but may result in lower output, says Svoboda. Costs for turbines aged 15 to 20 years can therefore vary between €0.03 and €0.035 per kilowatt hour, he says.
There are hopes, however, that new design and instrumentation technology will improve reliability and bring down these costs. A strong sign of this is that several manufacturers now feel confident of long-term service contracts with fixed prices for up to 15 years' operation, Svoboda says.
Advances in turbine technology, specifically for lower-wind sites, are also helping to bring down maintenance costs. In the past, onshore turbines selected for low wind speed regions were not optimised for this purpose, and maintenance costs for machines on theses sites tend to be higher than for newer turbines developed specifically for low wind sites that stay on the grid more persistently and generate more electricity per year.
Changing "bathtub curve"
This trend may eventually change the currently accepted pattern of maintenance, known as the "bathtub curve". Problems occurring shortly after commissioning, perhaps due to manufacturing faults, may require attention and cause higher costs before the turbine enters an extended period of stable operation. But the problems may increase again as the turbine ages, sending costs back up — often sharply.
Teething problems are likely to be covered by the manufacturer's guarantee, which may run for five years or longer. When this expires, the owner may decide on a major overhaul in a bid to offset subsequent costs.
The services offered by maintenance contracts can vary — from a specified checklist with no technical availability guarantee, to a full-care package with energetic availability guarantee. The complexity of contracts will increase as operators demand not just technical availability but also guaranteed output at any given wind speed, even as the turbine ages.
Contracts also have to consider the timing of maintenance work in terms of the needs of the electricity market. Technical availability will be replaced with guaranteed availability when the best market price for the wind-generated electricity can be achieved. Maintenance will have to take place when wind generation is of lowest or zero value — which, ironically, could be when the wind is blowing strongest and creating a surplus of electricity.
Maintenance may get cheaper per megawatt as larger turbines are used, but can also be made more expensive if the larger turbines are installed at remote locations. Maintenance costs per turbine are also generally higher for projects with few turbines than for those with more.
Contracts and bonuses
An accurate assessment of maintenance costs depends on the detail of the contract and can vary significantly, as investment prospectuses reveal. For example, alternative investment firm Aquila Capital raised equity for four Enercon E48 800kW turbines in Cumbria, England, curtailed to an output of 500kW to meet UK wind energy support requirements. The project came online in 2014. Full-service, 15-year contracts were signed for each of the turbines, under which annual payments per turbine for the first five years are €11,500 rising to €23,000 for the remainder of the contract. This translates into €23,000/MW/year rising to €46,000/MW/year.
From year two of operation, Enercon is paid a success-related bonus of €0.006/kWh up to year five; in years six to 15 the bonus rises to €0.012/kWh. If average output falls below the guaranteed 95.5% per year, Enercon pays compensation of €0.07/kWh.
Back in December 2010, for a single-turbine German project, Enercon had a different concept. The investment prospectus for one Enercon E82 2.3MW included a technical availability guarantee for 97%. For the first two years the full maintenance contract was covered by the guarantee; for the remaining 13 years the annual cost was set at €57,940. This equates to €25,619/MW/year from year three.
A January 2013 investment prospectus issued by Green City Energy for five Nordex-117 2.4MW turbines to be installed in the south German state of Bavaria included details of the 15-year, full-maintenance contract signed with Nordex. This included a variable charge related to the volume of electricity generated, plus a fixed annual charge, which was set at €30,500 per turbine in year one (€12,807/MW/year), rising to €90,800 in year 15 (€37,833/MW/year). Technical availability of 97% was guaranteed.
In its investment prospectus for seven GE 2.5-120 wind turbines, to be installed in Baden-Wurtemberg, south Germany, and commissioned at the end of 2015, WEBW Windkraftanlagen Creglingen puts maintenance and repairs costs at roughly €30,000/MW/year.
The full service contract with GE Wind Energy runs for 15 years with a generating availability of 97%.
Analysis by Ecoreporter, the independent German publication specialising in analysis of investment in sustainable projects, explains these costs are normal for the market and adds that the energy availability does not fall if the turbine is not technically available when the wind is not blowing, but falls sharply if it is technically unavailable when the wind blows strongly - so the wind-farm operator benefits more than if simple temporal technical availability had been agreed
Better technology and factors such as location and economies of scale are all variants that add complexity to maintenance costs. Alongside the nuances in the contracts offered to different projects, these elements highlight the difficulties involved in analysing maintenance cost trends in the wind industry.
DIFFERENT RISK AND SCALE – NORTH AMERICA UNDERCUTS EUROPE, WRITES ROS DAVIDSON
Wind turbine maintenance in the Americas is 15-20% cheaper than in Europe, according to analysis carried out last year by Make, the Denmark-based consultancy. That difference is relevant for North America versus Europe, given that most of the continent's operating base is in the US and Canada, says Make's Dan Shreve.
North America's onshore wind projects are, on average, far larger than their European counterparts, allowing owners to reap economies of scale, he says. And, rather than being offered from a regional service centre, maintenance for these projects is more likely to be onsite, adds Dalen Copeland, director of business development for EDF Renewable Services, which caters to more than 9GW in North America.
Billy Watts, head of Siemens Wind Service in North America, says labour costs are likely to be slightly lower in the US and Canada compared with Europe. And America's huge owners — such as NextEra and utilities — are also more likely to self-perform project maintenance.
One added cost for the US is the difficulty in staff retention — an issue largely because of the remoteness of many big projects, says Kevin Alewine, marketing director of Shermco Industries and chair of the O&M working group at the American Wind Energy Association.
The appetite for risk differs too. In North America, owners tend to be comfortable with greater risk; there is less call for "full wrap" maintenance packages.
Competition to provide maintenance is also more intense, with more third-party repair of components and a tendency to "run to failure" — a strategy that sets turbines to operate until they break, says Alewine. Condition monitoring has been more widely adopted in Europe, although it is now becoming more common in the US.
Short, five-year maintenance service agreements have been more common in North America, says Watts, but longer ones are now growing in popularity.
Project finance in Europe means that there are more likely to be banks involved that want to shift the risk to O&M providers, while a predictable income from feed-in tariffs, more common in Europe than in the US, will also make a less risky service agreement more plausible financially. "It all depends upon who is best suited to take the risk," says Henrik Olsson, head of Siemens Wind Service in Europe.
As yieldcos (publicly traded companies formed to own operating assets with a highly predictable cash flow) become more involved in North American wind-power projects, risk tolerance is moving closer to that in Europe.