With wind plant owners looking to optimise performance and minimise costs in the face of the global economic downturn, the question of what to do with ageing turbines has taken on greater importance. Options include investing money to maintain turbines, idling them to reduce wear, or repowering wind farms altogether with expensive but efficient new machines. "Extreme pressure will force hard decisions," says Ed Zaelke of law firm Chadbourne & Parke.
Keith Towse of the American unit of UK developer Wind Prospect agrees, but warns that neglecting maintenance in an attempt to save money is folly. Making drastic cuts in operation and maintenance (O&M) costs is "a false economy," he says, comparing it to skipping oil changes on a car to save money. "People have always wanted to cut costs because they see their revenue is going to be cut," he says. But the line must be drawn at the physical upkeep of the plant, he says. "The only thing you can do less of is maybe let the grass grow longer."
O&M businesses in America were suffering even before the economic crisis, Towse points out. "The operation and maintenance industry has been through the mill already in the past twelve to eighteen months as the expansions of the industry are causing a lot more contractors to enter the industry," he says. Increased competition in the market has forced many firms to rethink their strategies. Some have sought security through partnerships, such as Wind Prospect, which has teamed up with small O&M firm Run Energy.
But even with their combined strengths the going has not been easy. "People like Run have had to push their costs down and down already. So the ability to do that any more is fairly limited," says Towse. "Budgets are tight as it is. To cut back on anything is going to hurt the operations," adds Run Energy's Brad Grader. "But some operators are going to try and cut corners."
Douglas Levitt of CalWind says a strong focus on maintenance has proved worthwhile, although he may soon be forced to consider repowering instead due to a lack of components for existing machines. CalWind operates two wind projects in the Tehachapi Pass wind resource area in Southern California, one is 9 MW, the other 22 MW. Each uses a mix of Kenetech and Bonus turbines, all about 20 years old.
Thanks to regular maintenance, the machines are in such good condition that they remain available for operation around 97% of the time, Levitt says. Anything at 97% availability or above is considered healthily economic in the wind business.
CalWind replaces about five gearboxes each year on 130 operating turbines, says Levitt, but keeping the ageing equipment functional has become more difficult. "It becomes more difficult every year to find the components," he says. "That definitely influences one's decision to repower." Levitt has full ownership of the land and wind plant and has no debt to service, so every kilowatt hour his turbines produce brings in good money from power sales and tax credits, regardless of the turbines' age. "We are not running to get the most out of them today," he says. "It is more long term versus immediate results today."
In contrast, some wind plant owners focus on immediate results. This is especially the case for operators selling output directly into the wholesale market rather than through long-term power purchase contracts. When wholesale prices are high, plant owners can make good returns by operating machines flat out. Levitt says some operators of California's ageing fleets have run their turbines at redline by adjusting blade pitch to catch more wind than the units were designed for. Some have added tip extenders to blades to increase rotor size and capture more wind. But these steps can be penny-wise and pound-foolish by overworking the turbines, he warns.
Meanwhile, for some companies, replacing old turbines with new already makes economic sense. Coram Energy recently repowered some of its earliest projects in Tehachapi, replacing 283 Aeroman, 40 kW two-bladed wind turbines, installed in the early 1980s, with 10 GE 1.5 MW machines. Other repowering activities are planned, says the company's Robert Morrison. Tehachapi was one of the first areas commercially developed by wind power companies and, unsurprisingly, is one of the first to be repowered.
Exchanging old for new will be the wave of the future, says Morrison, as operators use new technology to get more out of existing wind resources. "I think the contrasts with extractive resource production are pretty significant, where typically all you are left with are a severely degraded landscape and a bunch of rusting junk," he adds, drawing a comparison with the fossil fuel industry.