True, operations maintenance (OM) may not sound like a sexy industry. But when it comes to industry growth and trends, wind OM is an exciting space right now.

Why? Consider the numbers.

• Worldwide wind installations grew by a cumulative 26.2 percent over 18 years, with a particularly strong uptick since 2009 (Global Wind Energy Council).
• Manufacturer warranties usually run from only two to five years of the typical 20-year lifespan of a wind farm.
• Those warranties have expired on more than half of the wind megawatts now operating, (Navigant Research’s “World Market Update 2013.”)

With warranties ending, wind farm owners are left to figure out what to do about OM. Voila — a huge market opportunity for those who can maintain and fix turbine gear boxes, generators, rotors, brakes and other parts of the wind turbine.

Further, the OM market for onshore wind will continue to grow by a whopping 40 GW per year, creating a 355 GW market by 2018 and 555 GW market by 2023, according to Navigant.

(Above: Duke energy maintains a fleet of 15 wind farms, which have an installed capacity of 1,700 MW. Credit: Duke Energy.)

This offers a new revenue stream for an industry whose manufacturing and development sectors suffered a setback with the world economic downturn.

“The market for OM actually provides more stable margins compared with turbine manufacturing,” said Feng Zhao, research director for BTM Consult, a part of Navigant.  “40 GW is a lot of business opportunity.”

Growth of Global Onshore Wind Market for OM, in Warranty and off Warranty: 2013-2023. Credit: Navigant.

Indeed, Navigant forecasts an €11.6 billion [US $15.5 billion] worldwide market for onshore wind OM by 2023, up from 3.3 billion in 2013.

Competition Fierce

A few different OM business models have emerged. Wind farms nearing the end of their warranties must decide which model will serve them best.

In some cases, utilities and wind farm owners re-sign contracts with the original equipment manufacturers (OEMs). In other cases, they develop in-house OM operations. Still others contract with the growing number of independent service providers forming around the new industry.

Many familiar names in wind equipment manufacturing are trying to capture pieces of the OM market. Among them are Enercon, Gamesa, GE Wind, Goldwind, Nordex, Siemens, Suzlon Group, United Power and Vestas, according to Navigant.

Meanwhile, wind development companies like EDF Renewable Energy have set up independent service providers.

“The OM market is hot right now,” said Dalen Copeland, director of business development for EDF Renewable Services. “There have been, and there will be, at least through the end of 2015 when the PTC is no longer available, a lot of assets installed in the U.S. and the rest of the North America.  And there has been significant growth over the last few years in the renewable assets installed and therefore coming out of warranty soon.”

Copeland described the competition as “fierce” with turbine manufacturers facing slowing turbine sales globally and therefore refocusing their businesses on OM services.

EDF Renewable Services operates in North America and plans to expand into South America. The company has been in the OM business for more than 25 years, initially because turbine manufacturers weren’t interested or able to perform OM on all of the turbines they sold, according to Copeland.

“We’ve stayed in the business because we think we offer a unique alternatives to owners who want OEM level stability and sophistication of service, but with the transparency that comes from a company that isn’t married to a particular technology. In other words, we can tell an owner when we think a machine is underperforming because of a design or installation issue,” Copeland said.

The company now provides OM for 8 GW, not just wind but also solar, biomass, and biogas.  With 500 technicians, EDF Renewable Services performs a range of services from pre-commissioning support through end-of-asset-life care, including scheduled and unscheduled turbine maintenance, balance of plant maintenance, remote monitoring and resets from its operations and control center, engineering and SCADA support, and asset administration.

Several independent service providers also can be found in Europe and Asia, among them the Netherlands’ Bettink Service Team and Green Energy Services; Spain’s General Power Services and Weir, YES and Greece’s EN.TE.KA, according to Navigant.

How to Choose?

Navigant points out pros and cons for wind farms to consider in deciding whether to go it alone, or contract with a manufacturer or independent.

Going it alone allows the wind farm to maintain control of the asset and fully understand its OM costs, which could lead to savings. On the other hand, performing OM means that the wind farm’s business operation is now more complex.

Equipment manufacturers are a good choice because they have access to spare parts and proprietary data. But their services can be expensive over the long term. Independents tend to price competitively and are drawing experienced employees, but they often do not have the same access to data and supplies as the manufacturer, and they may be small and undercapitalized, according to Navigant.