Too little attention is being paid to the implementation of standards for asset management in offshore wind power. At an asset management conference in Prague, I recently noticed that the industry has little knowledge regarding independent industry standards such as ISO55000, even though a combination of these standards and industry-specific expertise will result in much higher returns for assets. Setting up a solid asset management organisation is required to achieve this.
Virtually every fund has multiple physical assets in its portfolio. This is obviously no secret. An asset management organisation continually monitors, among others, the performance of these assets, with the main goal being to maintain the energy production at a high level. This will make for an optimum operation and thus for a profitable and valuable asset. With offshore wind energy, our area of expertise, it is very important to set up a good asset management organisation in a timely manner.
Take, as an example, the processing of operations data in the operations centre. This may indicate which wind turbines are not functioning properly, and for which action must be undertaken. Once the process for resolving a failure is set up correctly, there will already be a potential solution available for the possible cause. This solution can be assigned to the appropriate technical employees, who have all the information and resources to remedy the fault. After the technicians’ visit of the wind farm, the turbine will immediately function properly again. If no standard process is present, due to the lack of expertise, the technician will often not be able to fix the problem directly, and frequently, recovery actions will be scheduled. The result is several days of idle time at a multiple of the costs, mainly because of the loss in energy production.
Minimise lifecycle costs of energy
To make offshore wind energy more cost effective than other forms of power generation, it is important to minimise the lifecycle costs of energy. To determine the lifecycle costs of energy, take all the costs and divide the total by the total energy production during its lifetime. Our experience has shown that all the extra time taken to put an asset management organisation into service, will be at the expense of this energy production and therefore of the lifecycle cost of energy. To avoid this, it is important, in our view, to begin setting up the asset management organisation as early as possible. In the ideal scenario, all assets will perform optimally at the commissioning of a wind park; this is also referred to as a vertical start-up. Many of our customers recognise the importance of a vertical start-up, but take no action to actually accomplish it. There are several reasons for this.
Challenges in Operational Readiness
First, the project developers of the asset are often focused on getting the asset in place and have no eye for the operational part. In a manner of speaking, an project developer will say after the sale: “Here is your asset and good luck.” For example, it might be that a lot of the employees leave for the next wind farm, once the first has been transferred to operations. Secondly, the asset owner is not always interested in the entire life cycle of an asset, because he is no longer responsible after the sale. The seller thus neglects the most important part of his merchandise, because he really only sells a set of materials instead of a full performing asset. Another reason for the lack of a good asset management organisation at the start of the operating phase is inexperience. Experts are hired to set up an organisation, but after several expert switches, nothing is set up well at the start date.
Uncover the value creation potential in a week
Outsmart has a good in-house method to review every asset management organisation in the offshore wind sector. In a week’s time, the three major components will be reviewed, for both new projects and existing wind farms: process, system and organisation. To start with the first part: up to 80% of the activities in a regular asset management organisation add no value. If no attention is paid to this, it will create unnecessary high expenditure in the operational phase. By contrast, an organisation should actually focus on value added processes and, in short, the 20%.
Next, we look at the system. Setting up the system requires constant attention and it can take up to two years until a perfect system is in place. Without experience in this matter, it will be a time consuming task with a steep learning curve. The result is not even remarkable, because the system will now be just as good as in any other averagely functioning organisation. With the right knowledge and experience with regard to processes and systems, setting up an asset management organisation is a simple task. If the asset management organisation is set up with the right processes and efficient systems, the result will be the lowest lifecycle costs of energy. Approached incorrectly, the produced energy will simply be too expensive.