Sunday Sales Series – Utility Scale Wind O&M

Sunday Sales Series – Utility Scale Wind O&M

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How much does a wind operator spend on a wind turbine per year? I posed this question to 3 of the largest wind operators in North America.

Here was the range of feedback:

“That is a very loaded question as it completely depends on the breadth of scope for turbine O&M on the wind side.“

“It truly depends on the owner and what sort of approach they take to monitoring and maintenance“

Here are the below costs that roll into an annual wind O&M

  • Preventative Maintenances
    • Types of Preventative Measurement: Hands-on vs. Software
      • Hands-on: Some O&M providers are very manual. These firms perform inspections on their fleet every year or every 2 to 3 years. These include blade inspections, gearbox inspection and bearing boroscopes. This level of hands-on inspection is pretty unusual.
      • Software: more firms are adopting technology solutions to handle the scale of assets and projects. These softwares include performance monitoring or condition monitoring systems
  1. Depending on the age and technology and method of measurement, a preventative budget can range from around $5K to $15K per turbine per year. In the low-tech operator this is budgeted hours of a technician. In the hi-tech world these are sensors and software solutions. Drones and aerial tech are used frequently in both groups.
  2. Corrective Maintenances
    • Nobody ever knows what can go wrong with these turbines so it can be anywhere from $0 – $60K per turbine per year on average. And on the very high end, if a blade needs to be replaced, this can be up to $400K in a given year! The $0-60k annual average range includes the labor and some portion of the parts but if a repair is sizable the cost associated with corrective maintenance can grow quickly. This is why preventative maintenance is so important.
  3. Warranties
    • GE and Vestas will charge an owner in the $30,000 – $75,000 range per turbine per year for the full wrap of the turbine.

Market Sizing: There is big money in wind O&M. In the next 3-5 years there will be nearly 100,000 wind turbines operating in the US. At $15,000 per year in preventative maintenance that is a $1.5 billion annual market. And at $60,000 per year in corrective maintenance that is a $6 billion annual market. My estimate is that software or digital products represent about 1/3rd (and growing) of the preventive market and about 1/10th (and steady) of the corrective maintenance market.

Net, annually I expect that software and digital products currently represent a $600-700M annual US market opportunity in wind O&M. And this figure is growing to a $1.1 billion opportunity in the next 3 years.

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