Technical Risks in Wind Project Development

Transcription

1 Technical Risks in Wind Project Development Kevin J. Smith Global Segment Director Renewable Energy Services May 21, 2012

2 Discussion Objectives Introduction to project risks How to quantify risks Project based examples 2

3 Major Risks in Wind Farms Wind energy uncertainty Construction Turbine technology Turbine foundations Subsea cables Grid connection Offshore access Marine conditions Regulatory regime 3

4 Introduction to Wind Power Project Risks Risks by 3 main project phases - Planning and Development - Construction - Operations Represent key areas evaluated by IE in due diligence process 4

5 Development Phase Risks Wind Resource - Speed, Direction, Regime, Variability, Terrain Affects, Wind/Wave Site Location - Terrain, Met-ocean Environment, Environmental/Social Acceptance Impacts Wind Project Arrangement - Number of Turbines, Relative Locations, Wake Affects, Site Access, Future Development? Technology - Turbine Model, Manufacturer, Power Performance, Site Suitability, Reliability, Contract Terms/Scope of Supply, Definitions, Warranties, Serial Issues, Supply Chain Future Energy Estimate - Gross Energy, Losses (wakes, availability, electrical, weather, etc), Net Energy, Uncertainty Transmission Power Offtake 5

6 Construction Phase Risks Project Participants and Structure - Owner, Construction contractors, turbine supplier, Civil and Electrical Work - Access (vessels/roads), foundations, electrical collection, substation, communications, O&M facility Logistics and Execution - Equipment transportation, delivery, staging, assembly Manufacturer Equipment Testing or Quality Inspections - Equipment fabrication inspections, witnessing, quality system verification Construction Completion - Commissioning, initial operations, power curve tests 6

7 Operation Phase Risks Revenue - Power Purchase Agreements, Tariffs, Renewable Energy Credits, Gov t Incentives Transmission - Interconnection agreement, curtailment risk, technical interconnection O&M Approach - Project management, warranty, service, site maintenance Warranty Period - Management Agreements, Turbine Service Agreements, Balance of Plant Service Agreements Post Warranty - Spares inventory, securing suppliers, major event reserve, repower vs life extension? 7

8 Risk Management Process Quantifiable Risks Uncertainty of energy production Subjective Risks Contractors ability to perform 8

9 Mitigating Development-Stage Risk Experienced developer/owner Partnering to share / allocate project risk Basic understanding of all potential risks before focusing too much effort on any one risk Balance between realistic yet optimistic viewpoint Not being afraid to walk away when necessary Thorough due diligence before investing Building-in flexibility (deadlines, turbine types, etc.) Understanding value of risks already mitigated and the potential cost of those that remain 9

10 Mitigating Construction Risks Qualified, experienced participants Well-defined roles and responsibility interface Adequate and enforceable contractual penalties Adequate geotechnical survey Appropriate engineering design Realistic budgets/schedules Adequate consideration of environment Equipment availability Periodic review of construction quality control 10

11 Mitigating Operation Risks Pre-Completion - Understand agreements - Understand equipment - Ensure adequate post warranty budget & reserves - Insurance - Understand equipment availability/cost - Warranty language adequately defining design defects/serial losses - Adequate warranty duration - Adequate and flexible reserves Post Completion - Inspections/Audits/ Reporting - Tracking industry developments - Through analysis and tracking of all failures - Vigorous pursuit of warranty claims - Adjust reserves as data indicates is required 11

12 Good and Not So Good Projects Developer A Good Risk Management Developer B Not Good Risk Management On-site wind measurement multiple towers, multiple years, proper location Detailed energy assessment with uncertainty calculations Completed technical due diligence of turbine model, understands operation history, retrofits, planned for remaining open issues Utilizes well known turbine manufacturer and model and has adequate spare part inventory Aligned warranty provisions to mitigate technical concerns availability, power performance, serial defects, design defects, Reserves for unplanned major events One tower at highest location, wind flow model extrapolation, turbines at lower elevations Internal energy assessment with optimistic loss assumptions Utilizing new turbine model with innovative drivetrain, never deploy in this region, no service unit. Warranty limited to parts only for cost reduction Unrealistic project and O&M cost assumptions certain categories missing Electrical interconnection agreement contains large penalties for under production 12

13 Project Availability Comparison Project 1: 95% overall average availability Project 2: 86% overall average availability 13

14 O&M cost model outputs example cost predictions Parts replacement costs increase significantly over time; requiring spare part inventory 14

15 Subsea Cables and Power Transmission Issue - Many problems during cable installation, e.g. improper cable handling - Human introduced hazards (e.g. anchoring) - Natural hazards (seabed mobility) - Unplanned downtime not considered in energy estimates Mitigation - Cabling - Understand site-specific conditions - Chose appropriate cabling design (e.g. armour, burial depth, scour protection) - Work with experienced partners - Plan with contingencies - Substation - Realistic expectations for annual maintenance time - Include unplanned outages - Diligent inspections and maintenance Deep water channel 15

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