Optimisation 1

Optimisation 1 SEPTEMBER 2016 OPTIMISATION How to boost returns at your wind farms In association with © A Word About Wind, 2016 Optimisation 2 Proven wind farm performance optimisation Whether your wind farm is underperforming or you just want to enhance performance, talk to the optimisation experts. Our clients are achieving >5% production enhancement through: • Accurate yaw alignment • Control improvements • Blade aerodynamic enhancement • Forestry restructuring • Comprehensive measurement and rigorous analysis. Enhance performance | Boost returns | Reduce operational costs sgurrenergy.com | [email protected] © A Word About Wind, 2016 Optimisation Contents 3 CONTENTS Editorial: Companies start taking optimisation seriously 4 Marginal Gains: How to boost wind farm returns 5 Q&A: John Matthew, VP of Asset Management, Allianz 9 Q&A: John Sturman, Director, Kennedy Renewables 10 The Authors: A Word About Wind and SgurrEnergy 11 Vital market insight at A Word About Wind’s Financing Wind conference © A Word About Wind, 2016 Optimisation Editorial 4 EDITORIAL ver the next few years we expect focused on how to improve and re- Owind farm owners and investors power them. Improving their newer to take optimisation of assets more schemes is the next logical step. seriously. Here are the reasons why. So, in short, this is all part of the wind In large part, this is due to increasing industry’s continued evolution. The numbers of pressures on developers industry has come a long way in the and investors in established markets. last five years when it comes to think- ing proactively about how best to by Richard Heap, Governments in leading wind nations, manage operational assets, but all editor at A Word About Wind including Germany, have been looking too often this has focused mainly on to restrict the amount of new schemes how to get turbines to carry on for coming to the market, in order to longer rather than making them more keep subsidies in check. If it becomes effective while they are operational. tougher for firms to build new projects “Improving then it puts greater pressure on However, as you will see in this report, them to boost returns in other ways. optimising existing wind farms can do existing assets Improving existing assets can do this. both things: making schemes more ef- can help investors ficient and helping them to last longer. boost returns while Many of these nations have also been Sounds counterintuitive, right? If a tur- introducing systems where feed-in bine is working harder then surely that their margins are tariffs are set by reverse auctions, should be detrimental to its lifespan? being squeezed rather than centrally-set rates. This is elsewhere.” putting more pressure on investors to Not so, says SgurrEnergy’s director of reduce the levelized cost of energy of innovation Alan Mortimer. He explains their new schemes. Again, improving that running your turbines more effi- their existing assets can help investors ciently can both improve energy yield, boost returns while their margins are which boosts returns, and put them being squeezed elsewhere. under less stress, which means they last longer. He calls it a “win-win situation”. We also see big changes coming from within the industry. In this report, we cover the key cost-effective ways that investors should look A Word About Wind The focus on cost-cutting for new pro- to optimise projects; we run through www.awordaboutwind.com jects will no doubt encourage owners a series of case studies of those who [email protected] and investors to think more creatively have done it; and we have included two T: +44 (0)20 7193 6013 about their existing assets. Drones, li- short Q&A interviews with firms that +1 (917) 310 3307 dar and turbine improvements can all have used some of these techniques. help to make new schemes better, and 2nd Floor, owners will not want existing schemes And this is the key reason why firms 167-169 Great Portland Street, to miss out. Consolidation among should look seriously at optimis- London, W1W 5PF major manufacturers will help drive ing their wind farms: it makes good wind’s technological arms race. business sense, in a booming market or Editor: Richard Heap a more challenging one. Designer: Lee Washington Investors and owners will also be Sales & Membership: looking at what they can learn from All the best, Joe Gulliver schemes at the other end of the pro- Publisher: Adam Barber ject lifecycle. In countries like Germa- ny, the first generation of wind farms Cover image: SgurrEnergy are hitting the end of their useable lives, and this is getting more investors © A Word About Wind, 2016 Optimisation How to Boost Wind Farm Returns 5 HOW TO BOOST WIND FARM RETURNS Making small improvements to working wind farms can add up to a large financial boost for project owners and investors “Most wind farms he British cycling team dominated the is so successful because of their attention TOlympics in Rio last month in much to detail and the marginal gains, and it is the have potential for the same way it did in London in 2012. This same here. When you add together these between 5% and is testament to the continued influence of potential gains then most wind farms could 11% performance Dave Brailsford. improve performance by between 5% and 11%, and sometimes more if the project is improvements, and Brailsford was, until 2014, the performance adversely impacted by forestry. Those gains sometimes more.” director at British Cycling who mastermind- are very attractive for project owners.” ed the theory of ‘marginal gains’, which says that a cyclist can significantly boost perfor- Mortimer says there are plenty of good mance by making many small improvements. reasons for investors to optimise their wind The idea has gained popularity in the busi- farms. Over the short term, it means they ness world and Alan Mortimer, director of can improve the returns from the project innovation at SgurrEnergy, a Wood Group by increasing the electricity output; and, business, says it applies to wind farms too. over the long term, the improvements made to the turbines can help put less He says: “The British Olympics cycling team strain on them, which reduces maintenance bills and extends the lifespans of projects. Project lifecycle: Marginal gains theory helped Bradley He says there are a number of areas inves- Wiggins at London 2012, and it works in wind too tors should look at to boost returns. These include improving the aerodynamics of turbine blades; using up-to-date control and monitoring software systems; managing forests that affect air flows around projects; and fixing yaw errors. He says: “All of these affect the output of wind farms to various degrees and have the potential to be redressed with retrospec- tive measures, which is what this is all about: to be able to go back to operating wind farms and improve their performance. He also talks about pioneering technology that could help owners to manage their Source: Dan Davison via Flickr schemes more effectively over the next five to ten years. © A Word About Wind, 2016 Optimisation How to Boost Wind Farm Returns 6 1. REDUCING IMPACTS OF FORESTRY Once the most effective changes have been identified, the challenge for a pro- One area for owners to look at is whether ject owner is then to get the permission nearby forests are affecting the airflows for to make them happen. This is relatively their projects, and this does not just im- simple if the forestry is on the same site pact schemes that are located within for- as the wind farm, but harder if someone ests. Trees can affect wind farms several else owns the land. The wind farm owner kilometres away and, if wind farm own- can also face environmental and regulatory ers can work with forestry managers to hurdles around the felling of trees. restructure those areas of the forest that are having greatest impact, this can However, owners can frequently find produce very attractive financial returns. solutions. Forestry managers may find the chance to restructure their forest appeal- Typically, owners that address forestry is- ing, as it gives them the opportunity to re- sues could see a 2%-5% improvement in plant felled areas to modern standards and Case study 1 their scheme’s energy production, but this introduce a wider variety of tree species. can be up to 15%. An improvement of SgurrEnergy also has people on its team Client: Wilson Renewables 15% in energy production would raise a that have forestry experience and so can Project: Bankend Rig wind farm project’s 20-year absolute internal rate of find mutually-acceptable solutions. Location: Scotland Size: 14.3MW return (IRR) by 3%. Commissioned: March 2013 Owners can also find that such changes Mortimer says that SgurrEnergy would to forestry can have benefits beyond the The challenge: SgurrEnergy conducted typically start by using lidar to monitor the initial improvements to energy production. detailed investigation and optimisation airflows around the forests and wind farms. Smoothing the airflow by restructuring the services on Bankend Rig wind farm to identify and mitigate against the cause These laser-based systems can cover large forest can also result in steadier winds that of underperformance on the site. Reg- areas and show how trees are affecting the apply lower loadings on turbines, reducing ular asset performance reporting had wind before it reaches the wind farm. maintenance costs. There will be a limited identified the underperformance of number of project owners that can take turbines at the south-eastern end of “Even when you have turbines with rela- advantage of this, but for those who can, the site.

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