Presentation given by Bruce Valpy, MD of BVGA on how Offshore renewable cost of energy can be minimize OPEX requirements by carrying our the 10 steps to success

1. Offshore renewables:
Minimising OPEX
Nantes, 21 May 2015
Bruce Valpy
Managing Director
© BVG Associates 2015

2. 2/11
• Why focus on turbine reliability
• Reliability centred approach
• 10 steps to success
Contents
Justification
Offshore Renewables: Minimising OPEX
Introduction
© BVG Associates 2015
• BAV add
Selected clients
BVG Associates
• Market analysis and business development
• Supply chain development
• Economic impact assessment
• Support to industrialisation
• Project implementation
• FIT project development (UK only)
• SCADA & condition monitoring
• O&M technical support
• Technical innovation & engineering analysis
• Support to investment in technology
• R&D programme management
• Design and engineering services

3. 3/11
• Why focus on reliability
• Cost of energy
• Health and safety
• Reliability centred approach
• 10 steps to success
Contents
Justification
Reliability centred approach during wind turbine development
Introduction
© BVG Associates 2015
• BAV add
Selected clients
BVG Associates
• Market analysis and business development
• Supply chain development
• Economic impact assessment
• Support to industrialisation
• Project implementation
• FIT project development (UK only)
• SCADA & condition monitoring
• O&M technical support
• Technical innovation & engineering analysis
• Support to investment in technology
• R&D programme management
• Design and engineering services

4. Cost of energy
Basics
LCOE breakdown for project with 6MW turbinesLCOE
Where:
LCOE Levelised cost of energy in £/MWh
= revenue needed (from whatever source) to obtain rate of
return W on investment over life of the wind farm
(tax, inflation etc. not modelled)
Ci Capital expenditure in € in year i
Oi Operational expenditure in € in year i
Di Decommissioning expenditure in € in year i
Et Energy production in MWh in year i
W Weighted average cost of capital in % (real)
= (cost of debt x % dept ) + (return on equity x equity portion)
n Operating lifetime of wind farm (baseline 20 years)
m Years before start of operation when expenditure first
incurred
i i year of lifetime (-m, ..., 1, 2, …n)
Project development and
consenting up to FID
1%
Project management and
contingenciesfrom FID
to WCD
2%
Nacelle
20%
Rotor
15%
Tower
5%
Foundation
supply
11%
Array cables
2%
Foundation
installation
5%Array cable installation
2%
Turbine installation
1%
Transmission
charges
20%
Unplanned service
8%
Operation and planned
maintenance
5%
Other
4%
Decommissioning
1%
Operation
maintenance
and service
36%
Project4%
Balance of
plantsupply
13%
Installation 8%
CAPEX 64%
Turbine
supply 39%
4/11© BVG Associates 2015
Source: BVG Associates

5. Why focus on reliability
The case for focus on wind turbine reliability
Spend breakdown
© BVG Associates 2015
Wind farm
OPEX
16% of LCOE
Unplanned
Service
47%
Turbine
~90%
Foundation
Array cables
Other
Planned
Maintenance
Operations
Transmission
OPEX
If...
• If turbines were 100% reliable, so just needed visits for
planned maintenance...
• Wind farm OPEX reduced by 43%
• Lifetime expenditure reduced by 7%
• Lost energy due to turbine reliability reduced by 90%
• LCOE reduced by 11%
• Visits down 70%
• Accidents down by >80%
• Increased certainty would increase pool of investors
and decrease cost of capital
• Many innovations beyond
turbines, also…
5/11
Turbine
electrical,
34%
Hub and
pitch
system,
20%
Gearbox
and main
shaft, 11%
Generator,
8%
Blades, 4%
Array
cable, 3%
Support
structure,
3%
Other
turbine,
16%
Other wind
farm, 2%
Source: BVG Associates

6.  Lots good
 Few components / systems tested thoroughly
 Poor justification for component survival (beyond
calculations)
 Main component exchange not designed in / tested
 Not possible to easily replace wear parts
 Poor / incomplete manuals and troubleshooting guides
 Track record of unreliable systems / repeat faults
 Training strategies not implemented
 Site work records incomplete
 SCADA report errors
 Significant inefficiencies on site
 Type Certificate (does not consider the above)
Why focus on reliability
The case for focus on wind turbine reliability
Where our experience comes from
© BVG Associates 2015
Due diligence - experience
6/11

7. Reliability centred approach
Important ingredients of reliability centred approach
1a. Reliability budget
© BVG Associates 2015
Turbine
MTBF* = 3 months
(90 days)
Rotor
365 days
Blade
900days
Hub Assembly
600 days
Blade bearing
3650 days
Pitch System
450 days
Other
3650 days
Nacelle
200 days
Drive Train
MTBF = 700 days
Gearbox
MTBF = 3650 days
Generator
MTBF = 3650 days
Converter
MTBF = 2000 days
Other
MTBF = 2700 days
Yaw system
MTBF = 900 days
Control system
MTBF = 700 days
Auxiliary systems
MTBF = 900 days
Tower &
Transition Piece
300 days
10 Steps to success
1. Reliability and OPEX
budgets (and model)
* MTBF (large vessel intervention, small vessel
intervention & remote reset)
7/11

8. Reliability centred approach
Important ingredients of reliability centred approach
5. Demonstration of maintenance procedures
© BVG Associates 2015
10 Steps to success
2. ‘Rules of thumb’
1. Reliability and OPEX
budgets (and model)
4. Test and verification
3. Component reliability
reviews
5.
Demonstration of
maintenance procedures
8/11

9. Reliability centred approach
Important ingredients of reliability centred approach
6. Joined up SCADA/control/CM
© BVG Associates 2015
10 Steps to success
2. ‘Rules of thumb’
1. Reliability and OPEX
budgets (and model)
4. Test and verification
3. Component reliability
reviews
6.
Joined up SCADA/
control/CM
5.
Demonstration of
maintenance procedures
Holistic
decisions
CMS
Engineering
9/11

10. Reliability centred approach
Important ingredients of reliability centred approach
9. Fix first time approach
© BVG Associates 2015
10 Steps to success
2. ‘Rules of thumb’
1. Reliability and OPEX
budgets (and model)
4. Test and verification
3. Component reliability
reviews
9. Fix first time approach
8. Useful, accurate data
7. Feedback from site
6.
Joined up SCADA/
control/CM
5.
Demonstration of
maintenance procedures
10/11

11. Reliability centred approach
Important ingredients of reliability centred approach
10. Reliability champion
© BVG Associates 2015
10 Steps to success
2. ‘Rules of thumb’
1. Reliability and OPEX
budgets (and model)
4. Test and verification
3. Component reliability
reviews
10. Reliability champion
9. Fix first time approach
8. Useful, accurate data
7. Feedback from site
6.
Joined up SCADA/
control/CM
5.
Demonstration of
maintenance procedures
Bill Shankly, Liverpool Football Club
11/11

12. Thank you
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