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Why a lack of operator oversight is holding back offshore project success

Why a lack of operator oversight is holding back offshore project success

May 5, 2021

David O’Hare

Director of Europe

,

Clir Renewables

Ensuring consistent oversight of project operators is one of the biggest operational challenges facing wind farm owners today.

With O&M accounting for a significant portion of operational expenditure, owners must ensure that project issues are negated, and performance optimized to deliver expected returns. Due to the pace of new installations and the number of new investors entering the offshore wind space, many owners are unable to capitalize on the true value of their project data.

Stakeholders don’t always have an in-house team of wind analysts to lean on, so most place the day-to-day operation of a project in the hands of a single entity, the operator.

But if asset owners do not have the data or resource available to challenge their operator’s performance and reporting, how do they know if their project is performing optimally and contractual claims are being scrutinised?

An asset owner may look at a monthly operator report which is close to or meeting budget and be satisfied. But without seeing the performance data for themselves, owners could be leaving significant returns on the table. After all, you don’t know what you don’t know.  And it is exactly here that companies such as Clir, who specialize in data analysis, add significant value, and peace of mind to the market.

Now, it is certainly not the case that operators are deliberately misleading asset owners, particularly as many of those operators also have an ownership stake in the asset. But issues can arise from operations teams being burdened by aging data analysis tools, and being restricted by a lack of human resource: simply not having enough time in the day to catch every issue or problem that may occur. This can mean teams missing subtle changes in performance due to newly developed faults or incorrectly applied control parameters, and can also result in the inaccurate contractual allocation of events.

It is also common for owners and operators to not fully incorporate wider contextual data that is critical to understand whether underperformance is due to a low resource or a technical issue. Additionally, traditional methods of analysis struggle with the volume of data involved, particularly with the scale of offshore assets. Technical teams can spend weeks or even months working through turbine data to identify the root causes of underperformance.

Unless asset owners invest in their ability to compare operator reports against real-world turbine health and performance data, it will remain challenging to ensure the asset is healthy and producing to the best of its ability.  

This concern is exacerbated by the complexity of many offshore wind projects. Offshore projects often have complex ownership structures, with stakeholders across a consortium of organisations or investors who have multimillion-dollar portfolios encompassing hundreds of assets.

Complex structuring means the owners of equally complex offshore projects are inadvertently placing their financial security in the hands of an operator. This creates a black hole in the owner’s oversight of the technical aspects of their project.

We saw this when conducting a recent performance assessment on an offshore wind farm.The analysis identified anomalies at several turbines causing sub-optimal control and increased component fatigue. Working on behalf of the owner, Clir highlighted this to the operator, who then brought in the OEM to correct the control parameters, simultaneously improving performance and decreasing component fatigue. But more importantly, it prevented future downtime, an important consideration due to the magnitude of lost energy generally associated with maintenance and related logistics in the offshore industry.

A review of contractual availability on another major UK offshore wind farm unearthed multiple events incorrectly attributed to the owner rather than the operator.Providing visibility of event allocation allowed for more accurate availability reporting and a net benefit to all stakeholders involved in the project.

This level of external, technical oversight is critical if asset owners want to see performance improvements realized or be able to bring easily digestible data and actions to boardroom discussions. Perhaps most importantly, it also allows them to successfully question operators or other stakeholders over any discrepancies and see project or contractual performance issues disputed and resolved. These projects are too expensive and too important to let risks go unnoticed.

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