7th Annual

Wind Energy Operations & Maintenance Dallas Summit

Produced in association with:

Texas, USA14-15 April 2015

Key Wind O&M Themes, Trends and Growth Areas for 2015

Key Wind O&M Themes, Trends and Growth Areas for 2015

As the wind O&M industry matures, owners are becoming more educated and

wiser to their options post warranty. As a result, competition within the industry

is growing and owners are starting to take more responsibility. This has created

a clear shift in the O&M market where OEMs and ISPs will need to re-define their

role and demonstrate new strategies to meet with the increasing demands of

owners and operators.

However, whilst clearly a large number of owners are moving to a self-per-

form model for scheduled maintenances and small correctives, many are not

planning to take on major components straight away. So although they will

eventually, at this point there is still a huge market to be an expert at changing

generators, gearboxes, transformers, blades etc. as it is a whole new level of

expertise for operators.

With this in mind we asked over 350 wind O&M experts to take part in a survey

to outline new trends and challenges, define key growth areas, assess how the

industry is evolving and understand the biggest challenges facing the North

American market.

We asked owner/operators one set of questions and asked OEMs/ISPs/Service

Providers another set of questions and have compared the results.

The emphasis is on taking an old asset, making it run better, lowering the cost

of maintenance and increasing power output through new tech and data anal-

ysis. Easier said than done – both parties are clearly trying to reach the same

end goal, but with quite different ideas of how to get there. The results from the

survey have provided some food for thought.

Elizabeth Demestiha

Project Director | Wind Energy Update

elizabeth@windenergyupdate.com

Title

Wind Energy Update took a cross section of the industry to ensure a fair forecast

of industry movements and developments of Operations & Maintenance across

the USA.

The survey was completed by companies with capabilities across the entirety

of the US to ensure a fair representation of industry movements and develop-

ments in the region.

What best describes your job function? In which region are you based?

What best describes your company type?

Project Management 7.7%

Strategy 3.8%

Research & Development 8.3%

Asset Management 8.3%

Operations 10.9%

Technician/Engineer 9.6%

Business Development/Sales 17.3%

Marketing 3.8%

Consultant 14.7%

Finance/Investment 3.2%

Insurance/Legal 1.3%

Other (please specify) 10.9%

Owner/Utility 16.1%

Operator 13.8%

IPP 4.5%

OEM/ISP 19.9%

T2 / T3 4.3%

R&D 5.1%

Consultancy 21.2%

Finance/Investment 6.2%

Insurance 1.3%

Other (please specify) 7.6%

Other (please specify) 1.9%Europe 5.1%Latin America 12.2%Canada 13.5%North America 67.3%

On a scale of 1-5 (1 being the most important and 5 being the least) how important are the following challenges to you in 2015 and beyond?

What the sellers of O&M services say about key market challenges:

Adapting to the changing market & the

OEM/ISP power struggle

Losing market share due to increased

competition in the O&M market

Ensuring that key components last longer & become more efficient

Reducing costs & increasing quality whilst

remaining profitable

Keeping skilled workers & not losing them to

other energy sectors or owner/operators

1

2

3

4

5

Getting the right O&M strategy (OEM/ISP/Hybrid/in-house)

Ensuring main components last longer

& operate more efficiently

Getting the right maintenance/data analysis strategy

(preventative/proactive/reactive)

Finding skilled engineers and training

them in house

Sourcing & managing spare parts

1

2

3

4

5

What the buyers of O&M services say about key market challenges:

We asked the service providers what they rated as their most import-ant challenges - they replied that ensuring key components last longer & become more efficient, as well as reducing costs & increasing quality whilst remaining profitable were the highest ranking priorities.

Clearly OEMs and ISPs are working to meet the increasing demands of operators as competition grows and they work to re-define their role and maintain presence within the market.

We also asked owner/operators of wind farms what they rated as their biggest challenges - they replied that getting the right O&M strategy, ensuring main components last longer and operate more efficiently, as well as getting the right data analysis strategy were the highest ranking priorities.

The transition from end of warranty into the next phase of O&M is a critical one. The operators of wind farms around the US are increasingly assessing which O&M model to opt for, taking more control of their assets than ever before.

The results indicate that the focus for O&M in 2015 will be on upgrading key components to ensure they operate more efficiently and finding a way to interpret and benchmark data more accurately for optimized performance.

What the sellers say about O&M market growth: What the buyers say about O&M market growth:

The O&M market is predicted to grow significantly over the next 12 months – what will account for the most market growth?

Gearboxes

Blades

Generators

Energy storage solutions

Condition Monitoring Systems

Balance of Plant (substations & cabling)

Health & Safety

Retrofits & upgrades

Control systems

Data analysis

Staffing & Training

Other (please specify)

37.1%

27.8%

20.6%

22.7%

36.1%

6.2%

10.3%

40.2%

17.5%

27.8%

18.6%

9.3%

Gearboxes

Blades

Generators

Energy storage solutions

Condition Monitoring Systems

Balance of Plant (substations & cabling)

Health & Safety

Retrofits & upgrades

Control systems

Data analysis

Staffing & Training

Other (please specify)

32.5%

22.5%

17.5%

15.0%

25.0%

17.5%

10.0%

37.5%

20.0%

35.0%

20.0%

5.0%

When asked what would account for the most market growth both buyers and

sellers highlighted retrofits and upgrades as the number 1 factor.

Other key areas for O&M growth were identified as gearboxes, blades, CMS and

data analysis.

What the sellers say about condition monitoring:

Condition monitoring is a key part of a successful O&M strategy, how could it be used more effectively?

Implementing a standard for condition monitoring across the wind sector

Finding a better way to interpret and analyze the data

Ensuring more transparency across wind farms to benchmark data

Developing more accurate condition monitoring systems

Bringing more data specialists/

analysts in house

Improving the warranty inspection

process

45.2% 51.6% 31.2% 33.3% 23.7% 16.1%

What the buyers say about condition monitoring:

Implementing a standard for condition monitoring across the wind sector

Finding a better way to interpret and analyze the data

Ensuring more transparency across wind farms to benchmark data

Developing more accurate condition monitoring systems

Bringing more data specialists/

analysts in house

Improving the warranty inspection

process

45% 42.5% 35% 20% 17.5% 15%

CMS took the O&M industry by storm when it was first introduced as an innovative way to more accurately predict catastrophic failures and measure the performance of turbines. Now the majority of wind farms have CMS installed and the question arises how can it be used more effectively?

Over 51% of sellers state that it is about finding a better way to interpret and analyze the data. 45% of buyers say that it is about imple-menting a standard for condition monitoring across the wind sector.

In recent years we have witnessed continuous and rapid development of wind

power across the United States.

As the industry matures an increasing number of turbines are

coming out of warranty, and their maintenance comes at the

operator’s own cost. Therefore, besides the productivity of a

wind turbine, wind farm operators are increasingly interested

in reducing their life cycle costs through new services and

equipment.

Clearly there will be an increase in new technology being

deployed to meet these demands that will have a major impact

in the sector – these are some of the results we found:

The outstanding response from operators was remote moni-

toring, new preventative maintenance models, better use of

condition monitoring, and improved data analysis. There was

a great deal of emphasis on condition based monitoring (CBM) as it allows for

timely maintenance before major failures occur and monitors the condition of

key components in an overall approach that relies on real-time data from the

turbine.

One thing that will really help this cause is operators sharing data and creating a

benchmark for industry standards to measure performance.

Yet, whilst there is a clear need for better co-operation among operators with

more sharing of information, there is also a need to for on-site failure diagnosis

and corrective action by suppliers/vendors.

Another key issue that was raised is the current reliance on

cranes to switch out main components and do repairs – oper-

ators want solutions for up tower repairs that do not require a

mobile crane – one of the proposed solutions by many was the

use of drones.

The main result from sellers was firstly surrounding better blade

maintenance and then a renewed process for gearbox repairs

and failure analysis. This can be achieved through reliability

centred maintenance and retrofits that extend the turbine life

and increase power output. The use of remote monitoring and

servicing was also the centre of focus with drones and the use

of crane-less options for repairs and exchanges.

We know that CMS is a central part of a successful O&M strategy, but prognos-

tics & health management systems need to have more of a focus, their ability

to predict the life as well as diagnose and prognose system degradation and

failure will enhance reliability and reduce downtime.

What service / equipment can or will revolutionize O&M in the future?

“There is a lot interest in controls improvement and upgrades, firstly to obtain more energy from the wind farm, but also because the controls continue to be a head ache for operators and there is a need for better controls as it means increased reliability.”

With a number of the major owner/operators choosing to self-perform, who will become the new buyer in the O&M market?

The power struggle between OEMs and ISPs continues – and competition is increasing – what are you doing to change your business model to stay competitive?

Key Wind O&M Themes, Trends and Growth Areas for 2015: The Sellers Perspective

It will still be the major owner/operators (fleets above 400MW)

Medium sized owner/operators (fleets below 400MW)

Small sized owner/operators (fleets below 200MW)

Investors Operators in the European market

Operators in the Canadian market

53.6% 38.1% 27.8% 15.5% 13.4% 9.3%

Operators in the Asian market

Operators in the LATAM market

12.4% 8.2%

Focusing on increasing quality

Focusing on keeping & training employees

Developing a strategy to work with owners

more effectively

Focusing on driving costs down

Investing in advertising

and marketing

Introducing new products

& services

34.4% 20.4% 43% 33.3% 47.3% 6.5%

Exploring new markets

23.7%

As more wind farm owners choose to adopt an in-house O&M model, service providers need to accept that large owners are becoming more self-sufficient - meaning the question arises - ‘who is the new customer’?

Although the majority of service providers still identify the major owner/operators to be the buyer - the majority of OEMs and ISPs cited the smaller wind farm owners and international operators from the Canadian, European and LATAM markets as the new buyers.

With the changing O&M market model what are the OEMs and ISPs doing to stay in business? How will they adapt to what the owners need? As the ISP business model becomes increasingly strained from a viability stand point, a number of ISPs are staring to see ‘the writing on the wall’ and trying to evolve with their role shifting to more of a partner role.

The majority of OEMs have opened up to the idea that they will need to invest time working more closely and openly with owners, but a number of them will introduce new equipment technology and services to try and keep their existing customer base with the promise of optimized perfor-mance, life extension, increased quality and reduced costs.

Key Wind O&M Themes, Trends and Growth Areas for 2015: The Buyers Perspective

What is more important to you? What are you doing to take advantage of the increasing competition in

the O&M market?

What is the single biggest focus for you over the next 12 months?

Increase the power generated from wind turbines 34.1%

Lower the costs associated with O&M activity 65.9%

Optimizing performance 36.6%

Reducing gearbox (drive-train) failure 9.8%

Improving blades efficiency 4.9%

Asset life extension 17.1%

Improved asset management 17.1%

O&M options for post warranty 4.9%

Other (please specify) 9.8%

Drive down thecost of extended

warranty agreements

Witnessing improvedquality of service

Get more informationfrom OEM/ISP to

bring in house

Other

35.0%

47.5%

35.0%

15.0%

In sum, optimizing performance, lowering the costs

associated with O&M activity and improving the

quality of service from sellers are the priorities for

wind farm owners.

It is clear that owners want some protection but do

not want to pay the high price associated with OEM

programs - who will step up to the challenge?

“1- increased use of compet-itive bidding 2- absorbing and processing all available infor-mation 3- hard negotiations”

Key Wind O&M Themes, Trends and Growth Areas for 2015: The Buyers Perspective

What is your total turbine and BOP O&M cost per MW?Do you think that the North American wind industry could benefit from

sharing O&M strategies, challenges and learnings?

<$5k10%

$5k-$10k12.5%

$10-$20k37.5%

$20k-$30k25%

$30k-$40k7.5%

>$40k7.5%

Banking the knowledge for transparent sharing between operators would be an

optimistic goal but clearly one that would help the industry greatly. A national lab

or university could aggregate actual, totally anonymous data as an industry bench-

mark, to help understand if we are under-performing and help spur innovation.

“Share major component service history by manufacturer (not necessarily by turbine OEM), share grid coordination and control strategies, share safety lessons-learned”

Naturally the majority of responses were surrounding the need to benchmark

industry data, analyse failure rates for specific components and share innovative

ways to repair damages. Perhaps this is unrealistic as owner/operators remain

reluctant to share data and lessons, but at least more information with regards

to major components and actual costs would be a good starting point.

Another issue was sharing strategies for spare part positioning (locating warehouses

and service centres, quantifying replacement parts, modelling service levels).

With the PTC still up in the air there are a lot of uncertainties and balls to juggle so

there will be a big impact on where operators are focussing. The need for a collab-

orative approach is critical for the O&M industry to reach the next level of maturity.

The maintenance of wind farms and whether it is run cost-effectively will depend

greatly on a good understanding of turbine performance. Something that until

recently the OEMs have had the most clarity on – although the vast majority of

turbines are equipped with data monitoring systems – quite often the data is not

interpreted in a way that will diagnose performance issues and reduce failures

most effectively. Therefore, it is critical that wind farm owners invest in the correct

analysis of available SCADA data to decreasing operating costs.

Despite the continuous evolution of the condition monitoring market, the

results here indicate that 40% of farm owners still have O&M costs above $20k

per MW, indicating that there is a need to better interpret data in order to effec-

tively reduce operating costs, reduce failures and increase reliability.

Many of the decision makers that took part in this survey will be attending the

leading Annual Wind O&M Dallas Summit (14-15 April, TX, USA) that is back for its

7th year and set to be a huge success with 3 dedicated tracks, loads more network-

ing and brand new features - get the date in your diary now!

With representation from Duke Energy, EDF, E.ON, Iberdrola, Infigen,

Romax, Gamesa, Make Consulting, DNV GL and many more of the industry’s

biggest operators, OEMs and ISPs - the summit is back again as North America’s

leading networking and business forum for those looking to optimize their O&M

strategy through life extension, improved asset management, optimized perfor-

mance and innovative cost reduction strategies.

“This conference provides a clear view of the trends, challenges, and opportunities of the O&M spectrum”

Operations Manager, Siemens Energy

“The event is a great place to network and learn more about what others in the industry are doing to operate their sites“

Vice President - Operations & Maintenance, E.ON

“My best commercial mission and show in years”

President, Collineo inc.

O&M Dallas attracts representatives from:

7th Annual

Wind Energy Operations & Maintenance Dallas SummitDallas, TX, USA | 14-15 April 2015

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Thank you for your interest in the US Operations & Maintenance market overview. Wind Energy Update hope you found the

information collected interesting.

Please note this is only the beginning of discussions around in North America O&M. Do get in touch if there is certain insight, data

or networking opportunities you need.

For more information please visit: www.windenergyupdate.com

Or contact Elizabeth Demestiha at elizabeth@windenergyupdate.com

Join the conversation: linkd.in/Mi6eaN @W_E_Update

Wind Energy Update European Wind Energy Operations & Maintenance Market Overview 2014/15 © 2014 FC Business Intelligence®

The information of this document was prepared by Wind Energy Update (part of FC Business Intelligence) and its partners. Wind Energy Update has no obligation to tell you when information in this docu-

ment changes. Wind Energy Update makes every effort to use reliable, comprehensible information, but we make no representation that it is accurate or complete. In no event shall Wind Energy Update and

its partners be liable for any damages, losses, expenses, loss of data or profit caused by the use of the material or contents of this document.

Wind Energy Update grants you a licence to make one free copy of the information contained herein for personal or non-commercial use only. Accordingly, no part of this document may be copied, performed

in public, broadcast or adapted without Wind Energy Update’s prior written permission. Email Elizabeth Demestiha at elizabeth@windenergyupdate.com to request permission.

Wind Energy Update

7th Annual

Wind Energy Operations & Maintenance Dallas Summit

Produced in association with:

Texas, USA14-15 April 2015