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Keeping abreast of the winds of change

Asset integrity is the key to maximising return on investment in offshore wind.

Worldwide, there are nearly 100 major offshore wind projects identified as live or due to go live in the next three years according to the Energy & Industries Council. The maintenance costs alone for these projects are forecast to be more than $20bn over the next 20 years.

Experiences from the offshore oil and gas sector show that reality can be very different when it comes to balancing the cost and time pressures associated with major projects. In practice the focus, particularly when completion deadlines draw near, is to minimise capital cost, complete on time, adopt minimum specification to meet minimum contract/commissioning requirements, minimise any penalty costs, and “just get the project signed off”! All perfectly valid in the right context; but the flip side is a legacy of unnecessarily high opex costs required to sustain asset integrity for the lifetime of the asset.

Achieving Asset Integrity

In order to minimise life cycle costs, several aspects of opex costs need to be considered during the front end engineering design (FEED) stage of the asset life cycle, as part of a holistic through-life approach to asset integrity management.

These include: technical design, operability, maintenance strategy, productivity management and contracting strategy.

Where we have applied this process to offshore energy assets, we have found that there is typically an opportunity to improve costs by up to 30%.
These savings typically arise from:

  • Optimising design for enhanced reliability and reduced maintenance requirements
  • Optimising maintenance plans through a reliability-based analysis and ensuring maximum use of condition-monitoring techniques to address unavoidable failure modes
  • Increased efficiency of maintenance work execution through integrated logistics, optimised work planning using norms, aligned contract incentivisation
  • Reduced labour and material costs through optimal procurement strategies.

By applying a structured benchmarking process, we find that the key areas for optimisation improvement can be identified, while bringing an appropriate governance regime which will ensure stakeholders and investment partners are adequately informed.
The required transformation programme can be implemented and sustainable savings achieved.

  • Paul Stapleton is head of Energy at EC Harris and Ian Kennedy is a partner at EC Harris

 

Readers' comments (4)

  • Something is radically wrong here! Simple existing and well known procedures managed by engineers are all that is needed evaluate total wind farm system costs. Extensive hands-on engineering design, installation, construction and operations knowledge is needed, together with costings by cost engineers who have an inbuilt feel for the real total costs.
    Consider the complete offshore wind farm total systems already blighting our surrounding seas with many more still planned. Carry out a simple NPV or IRR calculation of theiir total life cycle costs including replacements, security, the 90-95% peak wind farm capacity parallel base load power generation needed when low/no wind blows, the massive cabling and power management system needed from individual turbines back to the National Grid and the drop off of the parallel running base load power generation systems' efficiency every time the wind farm contributes to ant current overall UK power demand. These latter three sub-systems' works are required solely for wind farms because of built-in overall total wind farm system inefficiencies - remote location of turbines, and the capricious and unreliable wind feedstock, and need to be included for any proper and honest comparison of wind farm costs compared to other systems. Apply also the usable power likely to be generated during the life cycle time of the project, i.e. not including power generated at times when it may not be usabable. Apply some escalation factors for the various cost elements but no "subsidies" and then calculate the current unit kWhr cost of power input into the grid.
    In any simple and proven Project Development system, alternative systems which meet the Clients' functional requirements and early on their overall NPV cost estimates are compared. Any option system showing 15-30% more costs than others are discarded at this early stage. When all total costs are included, independent analyses by respected engineering organisations with no axe to grind and with no commercial involvement with any one option system of systems, including renewable energy Systems, show quite clearly that offshore wind farms unit power generated costs are 100-200% more expensive compared to other, even some renewable, power systems.
    Why then is the government supporting such systems? More importantly, how are these non-engineer experts able to recommend and support them? It is nonsense at the best of times, but now incredibly suicidal to the UK electorate and UK plc in these times of austerity with, in addition, the critical need to significantly increase export earnings.
    By all means increase electrical equipment efficiencies and greatly improve insulation systems; pour state R&D money into electrical power generation systems, electric motors and electric battery improved efficiencies and have a demanding programme for avoiding wastage of power, but power costs must come down, and not be grossly inflated by subsidies, because power costs impact directly on all UK domestic, commercial, and industrial costs.
    Disregard other non-engineer inputs and remember the old definition of an engineer "someone who can design, build, and operate something (to meet some Client's functional requirements) for 10 shillings (total life cycle) cost, which anyone else could do for £1!
    We don't need buzz words and new procedures to do what engineers have been doing since the days of the Pyramids, and probably since before even that!

    Unsuitable or offensive? Report this comment

  • Something is radically wrong here! Simple existing and well known procedures managed by engineers are all that is needed evaluate total wind farm system costs. Extensive hands-on engineering design, installation, construction and operations knowledge is needed, together with costings by cost engineers who have an inbuilt feel for the real total costs.
    Consider the complete offshore wind farm total systems already blighting our surrounding seas with many more still planned. Carry out a simple NPV or IRR calculation of theiir total life cycle costs including replacements, security, the 90-95% peak wind farm capacity parallel base load power generation needed when low/no wind blows, the massive cabling and power management system needed from individual turbines back to the National Grid and the drop off of the parallel running base load power generation systems' efficiency every time the wind farm contributes to ant current overall UK power demand. These latter three sub-systems' works are required solely for wind farms because of built-in overall total wind farm system inefficiencies - remote location of turbines, and the capricious and unreliable wind feedstock, and need to be included for any proper and honest comparison of wind farm costs compared to other systems. Apply also the usable power likely to be generated during the life cycle time of the project, i.e. not including power generated at times when it may not be usabable. Apply some escalation factors for the various cost elements but no "subsidies" and then calculate the current unit kWhr cost of power input into the grid.
    In any simple and proven Project Development system, alternative systems which meet the Clients' functional requirements and early on their overall NPV cost estimates are compared. Any option system showing 15-30% more costs than others are discarded at this early stage. When all total costs are included, independent analyses by respected engineering organisations with no axe to grind and with no commercial involvement with any one option system of systems, including renewable energy Systems, show quite clearly that offshore wind farms unit power generated costs are 100-200% more expensive compared to other, even some renewable, power systems.
    Why then is the government supporting such systems? More importantly, how are these non-engineer experts able to recommend and support them? It is nonsense at the best of times, but now incredibly suicidal to the UK electorate and UK plc in these times of austerity with, in addition, the critical need to significantly increase export earnings.
    By all means increase electrical equipment efficiencies and greatly improve insulation systems; pour state R&D money into electrical power generation systems, electric motors and electric battery improved efficiencies and have a demanding programme for avoiding wastage of power, but power costs must come down, and not be grossly inflated by subsidies, because power costs impact directly on all UK domestic, commercial, and industrial costs.
    Disregard other non-engineer inputs and remember the old definition of an engineer "someone who can design, build, and operate something (to meet some Client's functional requirements) for 10 shillings (total life cycle) cost, which anyone else could do for £1!
    We don't need buzz words and new procedures to do what engineers have been doing since the days of the Pyramids, and probably since before even that!

    Unsuitable or offensive? Report this comment

  • Something is radically wrong here! Simple existing and well known procedures managed by engineers are all that is needed evaluate total wind farm system costs. Extensive hands-on engineering design, installation, construction and operations knowledge is needed, together with costings by cost engineers who have an inbuilt feel for the real total costs.
    Consider the complete offshore wind farm total systems already blighting our surrounding seas with many more still planned. Carry out a simple NPV or IRR calculation of theiir total life cycle costs including replacements, security, the 90-95% peak wind farm capacity parallel base load power generation needed when low/no wind blows, the massive cabling and power management system needed from individual turbines back to the National Grid and the drop off of the parallel running base load power generation systems' efficiency every time the wind farm contributes to ant current overall UK power demand. These latter three sub-systems' works are required solely for wind farms because of built-in overall total wind farm system inefficiencies - remote location of turbines, and the capricious and unreliable wind feedstock, and need to be included for any proper and honest comparison of wind farm costs compared to other systems. Apply also the usable power likely to be generated during the life cycle time of the project, i.e. not including power generated at times when it may not be usabable. Apply some escalation factors for the various cost elements but no "subsidies" and then calculate the current unit kWhr cost of power input into the grid.
    In any simple and proven Project Development system, alternative systems which meet the Clients' functional requirements and early on their overall NPV cost estimates are compared. Any option system showing 15-30% more costs than others are discarded at this early stage. When all total costs are included, independent analyses by respected engineering organisations with no axe to grind and with no commercial involvement with any one option system of systems, including renewable energy Systems, show quite clearly that offshore wind farms unit power generated costs are 100-200% more expensive compared to other, even some renewable, power systems.
    Why then is the government supporting such systems? More importantly, how are these non-engineer experts able to recommend and support them? It is nonsense at the best of times, but now incredibly suicidal to the UK electorate and UK plc in these times of austerity with, in addition, the critical need to significantly increase export earnings.
    By all means increase electrical equipment efficiencies and greatly improve insulation systems; pour state R&D money into electrical power generation systems, electric motors and electric battery improved efficiencies and have a demanding programme for avoiding wastage of power, but power costs must come down, and not be grossly inflated by subsidies, because power costs impact directly on all UK domestic, commercial, and industrial costs.
    Disregard other non-engineer inputs and remember the old definition of an engineer "someone who can design, build, and operate something (to meet some Client's functional requirements) for 10 shillings (total life cycle) cost, which anyone else could do for £1!
    We don't need buzz words and new procedures to do what engineers have been doing since the days of the Pyramids, and probably since before even that!

    Unsuitable or offensive? Report this comment

  • Apologies for the repeat comments. I don't know how it's happening as I've only submitted it once. It seems to occur when I re-access this website to see if any other comments have been made! System problems, but which end I'm not ceratin!

    Unsuitable or offensive? Report this comment

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