Abstract
Owners of wind parks often outsource operation and maintenance (O&M) of their assets. This chapter addresses the fundamental negotiating issues of wind turbine O&M contracts. We develop a conceptual mathematical framework to support the analysis and design of O&M contracts. The framework is used to investigate mechanisms through which incentives perceived by O&M contractors can be aligned with the objectives of wind park owners in both the short and the long terms. This alignment ensures that the negotiated contracts are part of a general strategy for maximizing the value extracted from wind turbines over their lifetime.
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- 1.
Many of the mechanisms mentioned in this chapter consist of incentives that also affect other desired attributes of wind parks as generation facilities. Our focus on availability is justified by the object of this chapter being O&M contracts.
- 2.
The expression availability of the wind turbines means the availability of the energy conversion facilities only, without consideration of the availability of primary energy resources (wind energy). Though O&M can be executed with the goal of ensuring that conversion facilities are available when there are primary energy resources to be converted, O&M services do not influence the availability of the energy resources per se.
- 3.
The reader is assumed to be familiar with basic concepts of reliability engineering. See [2].
- 4.
To avoid notational complexity, we suppress the dependence of \( \varphi_{i,r,t} \) on the history of component operation, which may result in physical stressing of components.
- 5.
However, it should be noted that procedural errors or latent failures in replaced parts may result in deterioration of the condition of a given component (and thus an increase in the failure rate) as a result of maintenance and servicing actions.
- 6.
In (19), the variable indicating operational decisions is indexed by \( \left[ {t^{1} + 1,t - 1} \right] \) and not by \( \left[ {t^{1} ,t - 1} \right] \), because we assume that no operational decisions are taken at period 1. As we discuss below, no maintenance protocols are available before \( t^{1} \), preventing any operational decisions to be taken.
- 7.
- 8.
This simplifying assumption becomes more restrictive as the total duration of a stage in the problem increases.
- 9.
We neglect operational expenditures incurred by the owner but not related to the items referring to O&M of wind turbines, such as land rental and administration. Effects of taxation are also neglected.
- 10.
We use the superscript \( o \) to emphasize that the utility function of the owner is potentially different from that of the contractor, which is used in Eq. (35).
- 11.
The theory of incentives deals with techniques for analyzing the trade-off between informational rent extraction and allocative efficiency. A discussion of the many different results on rent extraction and allocative efficiency would exceed the objectives of this chapter and require changes to the model of contracting employed here. We thus limit our observation to the fact that informational rents exist, and direct the interested reader to [10] and [5] for further details.
- 12.
We have to either neglect other operational expenditures such as insurance, land rental, and O&M of electrical connection facilities or assume that these are also absorbed by the contractor.
- 13.
Experienced owners may have better information than O&M contractors with respect to at least one stochastic parameter relevant for the contracting: the time-varying market prices.
- 14.
Which may not always be the case; e.g., high wind speeds and turbulence may lead to simultaneous failures in neighboring projects.
- 15.
The extension of the mathematical framework to the situation in which multiple renegotiations are allowed is relatively straightforward, basically corresponding to allowing the problem faced by the owner to be a multistage stochastic program, rather than a two-stage problem.
- 16.
Namely, the assumption that the owner estimates that the contractor estimates that the owner will take the actions with a certain probability is rather heroic.
- 17.
In this case, either another O&M supplier would be contracted or the owner would assume the responsibility for O&M. This need to hand over the responsibility of O&M should be included in (47)–(50). This can be done by considering constraints analogous to (48) and (49) for other parties potentially considered as candidates for assuming the responsibility of O&M.
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Ferreira, R.S., Feinstein, C.D., Barroso, L.A. (2014). Operation and Maintenance Contracts for Wind Turbines. In: Sanz-Bobi, M. (eds) Use, Operation and Maintenance of Renewable Energy Systems. Green Energy and Technology. Springer, Cham. https://doi.org/10.1007/978-3-319-03224-5_5
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DOI: https://doi.org/10.1007/978-3-319-03224-5_5
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