Wind O&M Dallas 2016: Keynote speakers say costs could fall 20%

The U.S. onshore wind sector could see operations and maintenance (O&M) costs drop by 20% in the next five years due to higher value components and collaboration between firms, leading industry figures said at the Wind O&M Dallas 2016 conference April 12.

Major savings from competition in the O&M sector in recent years will be followed by gains from technology advancements, improved maintenance strategies and knowledge sharing, Keynote speakers said on Day One of the conference.

The Keynote Panel Discussion saw leading operators, original equipment manufacturers and service providers forecast the major industry shifts expected in the coming years. The panellists said a 20% reduction in operational expenditure in the next five years is a realistic aim.

"That has to be the goal," said Peter Wells, Vice President Services, Vestas.

The industry is at the start of a cost reduction curve following the procurement-based pricing reductions seen in the O&M market, he said.

Keith Day, President, E.ON Energy Services, said costs could drop by as much as 50% over a 10-year timeframe.

Labor costs have already been significantly reduced and cuts to component costs will drive down operational costs, he said.

"We really have to focus [on] finding better parts, cheaper parts, substitutes," Day said.

As the wind industry has matured, companies are focusing more on maximizing turbine output during periods of sufficient wind resource. By continuing to focus on energy availability-based performance, the 20% cost reduction goal will become "very achievable," Chris Shugart, Senior VP Operations, Pattern Energy, told attendees.

"Rather than cost of O&M, I think cost of energy is the right metric to be looking at," he said.

Optimization of supply chains will also play a major role in cost reduction, and owners, service providers and equipment manufacturers can work together to make the supply chain more robust and reduce the downtime for spares replacement, speakers said.

Global supply chains of equipment manufacturers could be leveraged to benefit U.S. operators, Wells noted.

Companies can also benefit from closer cooperation in the fast-growing area of data-based analytics as owners drive for better value from analytics products, the panellists said.

Companies working with similar risk profiles can benefit from such collaboration, Greg Wolf, President Commercial Portfolio, Duke Energy, said.

"I think there will be continuing migration into clusters of owners that will think about this similarly," he said.

The speakers also stressed that further investments will be required to realize the full gains of data analytics.

"I think one of the most important investments is into people that are really into data analytics and into crunching numbers," Shugart said.

The vast amounts of data involved in analytics will require companies to invest more in data collection, data management and appropriate response actions in order to maximize returns, Greg Wolf, President Commercial Portfolio, Duke Energy, said.

"For us, we've seen real wins, but we're not using it to its full advantage yet."

Wind Energy Update

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