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5 Ways Service Models Reduce Financial and Operational Uncertainty for Wind Farms
Service models are contractual agreements where providers offer ongoing maintenance, monitoring, and management of wind turbine systems in exchange for a recurring fee, typically moving from capital expenditure (CapEx) to operational expenditure (OpEx). These models allow wind farms to shift from unpredictable, upfront costs to manageable and predictable operating expenses, helping owners and operators plan budgets more effectively.
Daniela Roeper, P.Eng.
Vice President BorealisWind
By including features such as performance guarantees and comprehensive maintenance, service models reduce the risk of downtime and maximize energy production, particularly during high-demand seasons. With consistent year-round service, these agreements ensure wind turbines remain in peak operational condition, avoiding costly emergency repairs that can disrupt production and revenue flow.
Here are 5 ways that service models can help reduce financial and operational uncertainty for wind farms:
1. Predictable Operating Costs
By converting CapEx to OpEx, wind farms can eliminate large upfront costs, making it easier to allocate funds for other growth opportunities. Service models can reduce OpEx by as much as 31% over a turbine’s lifetime, improving overall financial efficiency while providing predictable, manageable expenses. With service models, all-inclusive maintenance services prevent unforeseen costs, allowing wind farm owners to allocate resources more effectively and avoid budget surprises.
2. Minimized Downtime
With ice protection systems, wind farms can recover as much as 75% of energy lost due to icing, ensuring turbines are consistently producing energy. Ice mitigation can prevent up to 10 days of annual downtime, keeping turbines operational during peak seasons. Service models guarantee higher availability, translating into reliable energy production and improved revenue, even in harsh weather conditions.
3. Financial Predictability
By transitioning to OpEx, wind farms can better predict annual maintenance costs, providing financial stability over the long term. Average OpEx costs for modern wind farms have dropped to $40/kW-year, significantly lower than in the 2000s/2010s. Comprehensive service agreements minimize unplanned expenditures, making it easier for wind farm operators to manage their budgets effectively.
4. Performance Guarantees
Service models often include guarantees for availability, ensuring turbines operate at peak efficiency throughout the year, regardless of weather conditions. Ongoing monitoring and maintenance reduce the likelihood of costly mechanical failures, improving long-term performance and minimizing disruptions. Predictive maintenance ensures turbines receive timely repairs and remain operational during key production times. Additionally, by entrusting system performance to the original equipment manufacturer (OEM), the responsibility for quality and optimal operation remains with those best equipped to uphold high standards.
5. Sustainability and End-of-Life Solutions
Circular models that incorporate sustainability make sure that turbines and components are 100% recycled when they reach the end of their lifecycle, supporting sustainability goals and reducing environmental impact. By incorporating recycling into service agreements, wind farms contribute to a circular economy, reducing waste and increasing the environmental benefits of renewable energy. End-of-life solutions help wind farms minimize their carbon footprint and improve their overall environmental performance.
Service models provide wind farms with financial certainty by offering predictable costs and eliminating large upfront expenses. Comprehensive ice protection combined with these models can lead to significant returns on investment, making wind farms more profitable while generating more energy. Choosing ice protection systems with effective service models ensures operational efficiency and supports long-term growth by extending turbine lifespan and maximizing energy output.
Additional Information
BorealisWind System as a Service
Use Case: Finnish wind farm could earn more than 91% ROI with IPS
Sources
Benchmarking Wind Power Operating Costs in the US; NREL.gov
An Overview of Wind-Energy-Production Prediction Bias, Losses, and Uncertainties (nrel.gov)