The wind energy sector is making significant improvements not just in the capital cost and performance of its wind turbines, but also in the ongoing cost of operating and maintaining (O&M) them once installed.
This is the message from the inaugural issue of the Bloomberg New Energy Finance Wind Operations and Maintenance Price Index, just published.
The index, based on contractual data submitted on a confidential basis by leading players in the wind energy sector worldwide, shows that the average price for full-service O&M offerings for onshore wind farms (including scheduled and unscheduled maintenance works and component replacement) fell to EUR 19,200 per MW annually in 2012, from EUR 30,900 per MW in 2008 – a cumulative decrease of 38%, or just over 11% per year.
The decline in O&M prices was driven by increased competition, as turbine manufacturers vie for service contracts, as well as by improved service performance of the underlying turbines.
• Average contract duration has risen from 4.5 years in 2008 to 6.9 years in 2012, as manufacturers attempt to lock in longer-term agreements.
• Average availability guarantees in the contract sample reached 96.9%, with any upside beyond that generally shared between the developer and service provider. Guarantees on actual energy production are also becoming more commonplace.
• Markets in Eastern Europe and the UK had the highest pricing for full-service offerings. This may be due to higher labour costs and/or a limited local supply chain. The US displayed the most competitive pricing of all markets.
• Pricing between manufacturers has been fairly similar in 2008-12, with the exception of one manufacturer, German company Enercon. Its prices for full-service contracts were nearly 20% lower than the market average throughout the whole period.
• Index participants expect O&M pricing be fairly stable at least until 2015. They regard Enercon, Siemens and Vestas as the best service providers in the industry in terms of promptness and quality of service for scheduled and unscheduled works.