Siemens Wind Power A/S, Denmark

Role of Operations and Maintenance in

Securing Project Bankability

PO.53

Challenges
It is generally recognized that uncertainty in operational expenditure
(OPEX) constitutes a significant risk when building a business case for
the financing of an offshore wind farm. An O&M Contract that eliminates
or de-risk these uncertainties will help to improve the owners business
case. By reducing contingencies within the budget, lenders will be
attracted to invest. This means the O&M Contract can become a tool to
increase the bankability of the project.

This poster identifies some of the major risks underlying the

contractual relationship between the wind farm owner and the O&M
Contractor. The risks are examined in the light of how they can be
adjusted so as to provide the owners financing party with increased
comfort through reduced risk. This increased comfort surely needs to
be balanced, so as not to cause prohibitive discomfort to the other
party, bearing in mind the parties shared vision to see the wind farm
built, operational and successful.

Risks situation analysis Solutions for securing project bankability

Situation

Solution

Uncertainty regarding the

reliability of the technical
equipment in a highly
innovative environment
with quick technology
steps.

O&M contractor to cover equipment failures

for up to 15 years.

Potentially long lead times

for critical components as
well as the general
availability of Spare Parts
over the lifetime of the
project.

O&M contractor to secure spare parts supply

during lifetime of wind farm.

Moderniz.
and Upgrade

Current technology will be

outdated over the lifetime
of the wind farm

Choose an O&M provider that is actively

involved in Modernizations and Upgrades,
Mods & Ups, to ensure state of the art
technology and reduce levelized costs of
energy.

Jack-up
sourcing

Jack-up vessel can be

needed for the exchange
of large components. A
lack of jack-up availability
on the market as well as
uncertainties on costs and
number of required events
are a threat for the
modeling of the project
commercials.

O&M contract to include jack-up vessel

sourcing as part of the warranty for
equipment failures.

Multi contracting during the

operational life of the
project requires extensive
coordination between the
different parties.
Suboptimal coordination
will lead to additional
downtimes, costs and lost
output generation.

By choosing one single O&M supplier for the

whole wind farm the interface risk can be
eliminated. The O&M contractor will ensure
optimal coordination of its subcontractors and
manage any interface risk.

Technology

Spare Parts
Availability

Interface risk
during wind
farm O&M

Availability warranty that compensates for lost

revenues.

Situation

Solution

Experience
of O&M
contractor

While going offshore

experience is key. Trial and
error in regard to logistical
setup, site organisation and
intervention planning will lead
to unnecessary downtimes
and thereby revenue losses.

Selecting a supplier with a long track

record and experience within offshore,
O&M will ensure state of the art service
solutions with the focus on the highest
possible output generation.

Wind

Wind is an unstable
resource that is hard to
predict.

Output based service fees support the

project cash flow as they are following the
project revenue streams. This means lower
OPEX at lower revenues and higher OPEX
at higher revenues.

Weather

The harsh environment at

sea requires optimal
logistical solutions.

Experienced O&M contractors will choose

the right logistical setup that fits the specific
requirements of the project using
measured and simulated weather data for
the site. Weather downtimes can be
reduced to the absolute minimum.

Price

The cost of the O&M might

change over time.

Long term service contracts make the

business case predictable.

Contractual
stability

Financial instability of the

O&M contractor can put
the entire project at risk.

Choose a financial reliable and stable O&M

provider.

Spare part pooling concepts that eliminate

lead times.

Economy of scale enables the O&M

contractor to cost in the Jack-up at
favorable rates.

Conclusions

The right O&M partner will:

- help to mitigate the identified risks
- support the business case
- be a reliable long term partner
Choosing the right O&M partner will be a lever for securing project bankability

EWEA OFFSHORE 2011, 29 November 1 December 2011, Amsterdam, The Netherlands

Siemens Wind Power A/S, Booth 10111 in Hall 10
Contact Information: Mr. Christoph Hellwig Siemens Wind Power A/S Borupvej 16 DK - 7330 Brande Denmark Phone +45 99 42 22 22 christoph.hellwig@siemens.com