20161213 Maintenance subsea power cables for offshore wind - summary

Main takeaways to interviewees
Paris/Amsterdam, December 2016
Maintenance
policies of subsea
export power
cables for offshore
wind farms in
Europe

220161213 Maintenance subsea power cables for offshore wind - summary.pptx
We have conducted a benchmark of maintenance policies for export
power cables in offshore wind projects in Europe
MethodologyObjective Results
Map maintenance activities
for subsea power cables in
offshore wind
Understand options for
subsea power cable
maintenance policy
Identify drivers for option
choice
Highlight industry best
practices in export power
cable maintenance
Mapping of subsea cable
players along four business
models
Identification of preventive
and corrective
maintenance measures
Identification of TSO profiles
relative to involvement in
corrective maintenance setup
Suggestions of industry best
practices such as
contingency planning, frame
agreements and top spare
parts management
Source: Roland Berger
Project approach – Overview
Interviews with >30
players from the
offshore wind industry
and adjacent areas
Databases, press
releases, experts
reports
Secondary research

Summary
> Offshore wind generation capacity is expected to boom in the coming years in Europe. Availability and efficiency of
subsea export power cables will be paramount to deliver expected results in terms of value and of performance. This
business issue is chiefly handled by power cable maintenance policies
> Maintenance consists in inspection, predictive and corrective actions. Policies are typically defined well before the wind
farms enters operation. Their ultimate goal is to limit impact and duration of events, through: prediction of failure,
limitation of revenues’ losses, shortening of failure duration, reduction of repair costs.
> Cable failures are unpredictable events, typically occurring once per year and per 1000km cable. Corrective actions
require assembling means and capabilities that can hardly be possessed by TSOs. Hence, TSOs typically seal
agreements with contractors, of one of the following types: turnkey cable OEMs (who sell cables, installation and
maintenance services), charterers / installers, survey specialists and/or cable maintenance specialists
> We have identified two models adopted by European TSOs for their corrective maintenance:
– Interface: the TSO is responsible for supervising the repair work and organizing the interface between contractors
– "Hands off": the TSO transfers a large share of the responsibility of repairs’ execution to a single contractor
> TSOs' best practices towards corrective maintenance consist in
– Preventive measures, including inspection and regular appraisal of risks and consequences on the state of the grid
connection
– Contingency planning i.e. risk pre-identification, cable breakdown scenarios description and definition of the technical
response to be implemented; this is a pre-requisite to establish frame-agreements with contractors
– Spare parts i.e. maintaining a stock of spare cables, joints and equipment for each farm/cable, as grid connections are
not standard

If you have further questions, please contact us
Eric Confais
Partner
Paris
Eric.Confais@rolandberger.com
+33 6 76 98 59 83
Heloise Dheilly
Consultant
Boston/Paris
Heloise.Dheilly@rolandberger.com
+33 6 76 98 80 25
Ward van den Berg
Research Senior Expert
Amsterdam/Paris
Ward.vandenBerg@rolandberger.com
+31 643973016

A. Landscape overview

Offshore wind capacity is growing fast in Europe
2015
11.0
8.0
2013
6.65.0
2011
3.82.9
2009
2.11.5
2007
1.10.8
2005
0.70.6
2003
0.50.3
2001
0.10.0
+19% p.a.
2023
Other countries2)
44.0
Germany
16.3
United Kingdom
13.0
2017
20.0
24.6
2018 2019
France
Denmark
20212020
35.3
40.5
2022
32.0
Netherlands
Belgium
2016
Offshore wind historical cumulative capacity in Europe
[2000-2015, GW]
Offshore wind expected1) cumulative capacity in Europe
[2016-2022, GW]
Offshore wind European market
Source: WindEurope; 4COffshore; Roland Berger
1) Estimates drafted when offshore wind had a LCOE (levelized cost of energy) around 80-100 EUR/MWh. Recent project awards have reached a LCOE of ~50 EUR/MWh and subsidies
are shifting from onshore to offshore wind projects, which may accelerate growth, 2) Other countries include Finland, Norway, Sweden, Poland, Italy, Portugal and Spain
> The first offshore wind farms were largely subsidized by
governments with the objective to support energy mix
diversification
> Equipment improvement and competition intensification in the
turbine market has driven down cost of construction and
operations
> Offshore wind farms are now perceived as a competitive and
sustainable energy generation solution

We identify four business models in the subsea export cable
submarket
Turnkey OEM
Charterer -
Installer
Survey
specialist
Maintenance
specialist
Source: Interviews, Roland Berger
1) ABB is the most advanced player in terms of turn-key maintenance offer. An obstacle to the cable manufacturers' ambition to offer turn-key solutions is their limited balance sheet that
prevents them from large risk taking. Larger players such as Japanese Sumitomo could establish turn-key offers faster.
Offshore WA
FEED
Detailed
engineering
Equipment
manufactu-
ring
Cable
installation
Commis-
sioning
Preventive
maintenance
Corrective
maintenance
Inspection
Osiris Marine
Ambition to offer a
turn-key solution1)
Partial sub-
contracting
Partial sub-
contracting
Players
(selection)
Partial sub-
contracting
EDS
Subsea
cable
value
chain

B. Maintenance policies

Several maintenance levers exist to limit losses related to cable
failure
Objective:
Limit losses linked to cable failures Levers
Losses
Contingency planning
Preventive
maintenance
Frame agreements
Revenues/day
Repair cost
Probability of failure
Duration of the failure
Regulation & contract
terms

A mature and effective maintenance policy combines a preventive
and corrective maintenance based on a risk-consequence approach
> Maintenance policies are
established around two
dimensions:
– preventive measures
– corrective maintenance
> The set up of preventive
measures is based on regular
assessment of risks and
consequences on the state of
the grid connection
> An effective corrective
maintenance policy relies on
upstream work involving risk
identification, cable
breakdown scenarios
description and definition of
the response to be
implemented with potential
frame-agreements with
contractors
Take aways
A good maintenance policy includes preventive maintenance procedures
and a contingency planning to be activated in case of an anomaly.
Contingency planning requires heavy technical work beforehand
The OFTOs that did not have a contingency plan had to define and
implement procedures on the go during cable failures and it did not go
well.
Operator
O&M expert at an operator
Ideally, in case of a problem, the operator has already done all the
preparation work and only needs to look into the file off the shelf to find
the right procedure with permits and pre-filled authorizations. It requires an
upfront investment but it's worth it as you can save several days of lost
revenue. Maintenance specialist

Preventive maintenance is an imponderable of subsea power cable
O&M
> Cable parameter monitoring and
preventive maintenance of risk-
prone zones have become the
norm
> Offshore wind stakeholders
have different approaches to
preventive maintenance: cable
specialist advocate for
conditional maintenance while
financers and insurers demand
more guarantees through
inspections
> The risk of repairs and costly
penalties incentivize TSOs to
implement preventive
maintenance initiatives
Take aways
When we detect that a cable is in free span, we assess the situation, the
risks and consequences of an incident at the location and then decide to
keep status quo or organize an operation for cable re-burial or rock dumping
Operator
There were almost no monitoring or inspection initiatives five years ago. Now
cables are equipped with DTS allowing for constant monitoring and cable
owners organize regular cable inspections
Operator
Project financing can only be closed when sufficient guarantees have been
showed on preventive maintenance of the cables, which may include visual
inspections several times a year or additional protection agreements with
local fishermen
Consultant in project finance
In the telecom industry, there is no planned visual inspection of the
cable due to long distances and relatively low cost of repair. Only zones with
specific environmental protection are regularly inspected
Telecom

> Cable manufacturers initially believed that cables would
virtually suffer no failures during the useful life of an
offshore wind farm
> Insurers now estimate that there is on average 1 cable
failure every 1,000 km every year and that
approximately 10 cable failures are subject to insurance
claims every year (including export cables and
interconnections)
> Cable failures are the costliest incidents in the
offshore wind industry due to revenue lost and insurance
claims that amounted to more than USD 60 m in 2015
> At the installation phase, the cable (manufacturing +
installation) represents app. 15 to 20% of an offshore
wind project but cable failures account for 77% of
total cost of offshore wind losses
> Cable repairs is time-consuming: only 40% of cable
failures are repaired in less than a month and more
than 25% take more than 3 months
Cable failures are frequent and costly
Source: Gcube, WINDPOWERoffshore, Global Marine Energy, ISCPS, WindPowerMonthly, 4COffshore, Interviews, Roland Berger
Main insured offshore wind losses (as of end 2010)
1) Property damage
Project Event
Estimated
cost –
PD1) only
(EUR)
Danish windfarm - CAR Anchor drag on cable -contractor vessel 1m - 5m
UK windfarm - CAR Damage to cable caused by plough tipping 1m - 5m
UK windfarm - CAR Water damage to cable following capping 1m - 5m
UK windfarm- CAR Transformer damage following testing 1m - 5m
UK windfarm - CAR Damage to cable during onshore laying 1m - 5m
Dutch windfarm - CAR Blade damage during rock dumping Less than 1m
Dutch windfarm - CAR Storm damage to railings 1m - 5m
Belgian windfarm - CAR Foundations / J tube 20m+
Danish windfarm - Operating Step-up transformer damage 1m - 5m
Irish wlndfarm - Operating Dragged anchor 1m - 5m
UK wlndfarm - Operating Cable fault 5 m +
Cable-related incident

Telecom statistics on cable failure causes
Cable failures generally happen during construction or during the
first few months of operations
Source: Interviews, Tyco, Roland Berger
> Industry experience from telecom subsea
cable indicates that the majority of cable
failures are related to fishing activities or
anchors
> However, subsea power cable industry players
point our that electric cables are larger and
more resistant to external aggressions than
telecom cables
> Power cable failures seldom happen during
operations. Most breakdowns take place
during construction or during the first three
months of operations due to internal
defects or installation problems, e.g. quality
issue at cable hang-off or a cable cut off by a
jack up barge leg during construction
4%
Abrasion
Anchor
Internal defect
7%
9%Others
21%
Unknown
44% Fishing
15%

TSO are mostly organized along two models for their corrective
maintenance policy set up
Interface TSO Hands off TSO
Vessel
chartering
Jointing
team
Service
specialist
Project
manager
contractor
TSO
Contract or frame
agreement
TSO
Vessel
chartering
Jointing
team
Survey
specialist
Broker
> The TSO transfers the responsibility of executing the repairs
to a single contractor which manages the interface of the different
activities
> Contingency plan often developed with the principal contractor
> The TSO is responsible for supervising the repair work and
organizing the interface between the different contractors
> A frame agreement is generally signed with each contractor
Frame
agreement
Frame
agreement
Frame
agreement
Contract
Potentialy sub-
contracting

Cable failure anticipation and pre-contracted frame-agreements can
significantly accelerate repairs
Simplified indicative timeline of a cable repair
Month 1 Month 2 Month 3 Month 4
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Cable failure detection and localization
Contract negotiations
High-level localization
Precise localization
Repair vessel mobilization
Jointing team mobilization
Repairs
Cable failure
Vessel mobilization
Activity
Sea operations
begin
Vessel search
Cable
repowering
High level cable failure
localization necessary
for vessel choice
Levers
Frame agreements allow
for contract signing in a
matter of days
The best specialists are
able to localize a defect
precisely in just 7 days
Vessel identification
beforehand enables to
decrease vessel research
and mobilization to 3
weeks
Potential decrease in
repair duration by 7
weeks

The cable can be damaged by UV exposure. Joints include perishable
elements and they have to be checked regularly Developer
Proper storage of spare parts and equipment supports timely and
effective repairs
> Spare parts (cables, joints, other
equipment) management is a
key element of an effective
maintenance policy
> The TSO must respect the
storage conditions
recommended by the cable
manufacturer in order to
preserve cable performance
> Minimum bend radius and
joint perishable elements have
to be particularly monitored with
extra attention
> It is recommended to regularly
test that the spare cable is
working properly (beyond visual
inspection)
Synthesis
If you want to preserve the cable's performance, it is very important to
respect the cable minimum bend radius and to be mindful of the pulling
system Cable manufacturer
In the past, there have been some misunderstandings regarding cable
storage. Some TSOs have kept cables in the drums they were originally
delivered in and this damages the cable
Ship owner
Ideally, the spare cable would be regularly tested to ensure that it is
working well Telecom

E. Introduction to Roland
Berger

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Our profile
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20161213 Maintenance subsea power cables for offshore wind - summary

20161213 Maintenance subsea power cables for offshore wind - summary

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20161213 Maintenance subsea power cables for offshore wind - summary