Abstract
The aim of this paper is to investigate uncertainties present during operation of offshore wind (OW) energy assets with a view to inform risk control policies for hedging of the incurring losses. The parametric framework developed is subsequently applied across a number of different locations in the South East Coast of the UK, so as to demonstrate the effect of weather conditions and resulting downtime on a number of operational Key Performance Indicators (KPIs), such as downtime due to planned and unplanned interventions, wind farm availability, Operation and Maintenance (O&M) costs and power production losses. Higher availability levels were observed in areas closer to shore of the specified region, while the distribution of O&M cost per MWh generated demonstrated a general trade-off of higher power generation in locations farther from shore due to better wind speed profiles and higher O&M costs, as a result of the decreasing vessels accessibility. The proposed methodology aspires to contribute to the development of better-informed risk control policies, through parametrically estimating the probability of exceedance curve of the production losses of an OW farm and indicating appropriate thresholds to be considered, so as not to exceed a maximum level of risk.
Highlights
Most relevant decisions throughout planning, construction and operation of Offshore Wind (OW) energy assets made by market agents involve a significant level of risk due to technical conditions and project externalities (Ioannou et al, 2017a,b)
The integrated Operation and Maintenance (O&M) cost estimation framework was applied to the baseline wind farm and across a number of different locations in a region by the South East Coast of the UK
Protection against weather risk was originally included as a clause embedded in contracts for unforeseen weather conditions, but is becoming a bespoke financial instrument to hedge the risk of the resulting financial losses, currently offered by insurance companies and brokers (Willis Towers Watson, 2018)
Summary
Most relevant decisions throughout planning, construction and operation of Offshore Wind (OW) energy assets made by market agents involve a significant level of risk due to technical conditions and project externalities (Ioannou et al, 2017a,b). In the occurrence of a failure, weather-related risks can increase the total downtime of the wind farm by impeding the access of the support vessels dispatched to perform maintenance activities, leading to revenue losses. Both cases can lead to significant impact in cash flows and the project's ability to meet debt service requirements. Within the context of this study, weather-related risks refer to the effect (i.e. potential energy production losses) of the random nature of key sea state variables, namely the wave height and wind speed, whose exceedance beyond a threshold can influence the operability of the asset (i.e. due to limited accessibility for maintenance)
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