Servicing is feeling the cost pressures

Mon, 09/04/2018 - 14:28


Full maintenance or individual service solution? The market is changing under the new framework conditions. (Photo: Deutsche Windtechnik AG)
Authoring Information:
Kai Eckert for SUN & WIND ENERGY

Increasing demands by the operators of wind turbines on service and maintenance providers, as well as growing cost pressures, are topics which the sector must look at. This is a conclusion from our current survey of wind power service and maintenance companies.

The market for providing independent service and maintenance is moving ever-more strongly away from full maintenance contracts towards individual customer-oriented solutions. Turbine operators both have to, and wish to become, ever-more intensively involved in maintenance issues. Although Deutsche Windtechnik AG, by far the largest service provider on the market with over 1,000 employees and 4.5 GW of wind power capacity in its service and maintenance portfolio, “still sees a strong interest in full maintenance,” it is also noticing a trend towards “new” contract models in which the turbine operators take on higher risks.

It is not yet clear whether these are already the first effects of the tendering model introduced in Germany last year. Since the start of 2017, the level of EEG support has been determined by tendering. The tender goes to whichever bidder requires the lowest EEG support. The majority of the service providers surveyed assume that enormous cost pressures have been put on the bidders by the tendering model. “Right now it is very hard to tell how the tendering will affect the service and maintenance sector,” counters Carsten Michels, head of the service provider Peper Energy GmbH. “Currently, the wind farms onshore and offshore in our area are from before the tendering model came in,” says Michels.

Many market participants thus do not expect any effects initially. “We will have to wait and see what realisation rates we get for projects onshore and offshore without subsidies,” says Michels firmly. It is also clear to him that the increasing cost pressures will spread to the whole value chain, as the planned annual expansion volumes for onshore and offshore wind power in Germany are too small to generate further industrial growth here.

Individual and flexible solutions

Some service providers, such as Deutsche Windtechnik or Connected Wind, have responded to the new challenges and are already taking their service concepts into the project planning phase in order to calculate the costs together with the project developers for the tendering procedures. Other providers are looking for new market niches. Enova Service GmbH, set up in September 2017, is using used spare parts for repairs, for example. “Older wind turbines do not necessarily need new parts. With a good procurement management and the use of second-hand spare parts, four-figure savings can be made,” says company head Dirk Warnecke on his business model. He aims to “get maximum yields” for turbine operators with value-for-money services. Enova Service has announced that it wishes to also replace and repair large components in the near future, and expand its territory from the Weser-Ems area to the whole of Northern Germany in the medium term, as well as taking up further turbine types in its portfolio. At three wind farms in Emsland with a total capacity of 27 MW, the provider claims it has recently increased turbine availability to 99.3%.

Time pressures are rising

Down-times and failures are also still an important area of discussion this year between turbine operators and service providers. The blame is not entirely on the service and maintenance providers here. We hear from the providers that there is often a lack of knowledge on the side of the customer on operator responsibilities and technical know-how. Things become difficult when operators are late to make requests for expertise and checks, thus increasing time pressures on the service provider. It is equally problematic when operator employees without adequate expert knowledge perform some “DIY” on the turbines, says one survey respondent. Nevertheless, turbine operators are demanding that they be involved more and more in the service and maintenance, enabling them to take up tasks themselves in order to save on costs. Because customers’ quality expectations are also rising at the same time, the sector must take on these challenges and develop new cooperation and partnership concepts. One thing is clear too; the increasing cost pressures must not be to the detriment of quality guarantees or the guarantee of worker safety.

On the turbines themselves, the gearbox and main bearings remain the most often stated wear and tear areas. Poorly functioning or broken service lifts are giving technicians a hard time. The external surfaces are seeing erosion of the rotor blades and tower corrosion as typical effects of wear. During tower and foundation renovation the service providers have once again this year mainly seen crack formation in the concrete, spalling and corrosion as the major wear and tear. Corrosion thus remains an important subject for service and maintenance.

“Cost savings in corrosion protection are leading to a steady rise in the number of corrosion damage incidents,” warns Carsten Michels from Peper Energy. To save on corrosion protection, to not rectify transportation, storage or installation damage and to choose the wrong coating system or have the application of the corrosion protection carried out incompetently, all with a view towards the economics of the turbines, can lead to corrosion-related failures or costly renovation work in his opinion. Especially for offshore customers, Michels thus goes with an effective corrosion protection together with his system partners, which he has applied by his trained employees.

Job creation is working, but consolidation pressures are rising

In the current market survey, 15 of the 19 participating companies said that they have vacancies right now. Primarily, electrical technicians, electricians, qualified service technicians and corrosion protection experts are being sought. The highest demand for workers is at BayWa r.e. Rotor Service GmbH and Deutsche Windtechnik AG, with 35 and 30 vacancies respectively. Compared to the responses from the previous year, two companies have increased their workforces especially clearly. Deutsche Windtechnik AG has hired 125 new service workers and can now send out 270 teams out of its 1,020 employees, which is 37 teams higher than last year.

At Reetec GmbH from Bremen the number of employees has more than doubled even over the previous year to 350 service technicians. The reason for this, however, is the takeover of Off-Shore Wind Solutions GmbH last summer. Reetec bought the servicing company set up by the bankrupt company Bard Engineering GmbH and expanded the Emden location as a new base for the service and maintenance of offshore WTs. In the service and maintenance sector there will continue to be such consolidation through company takeovers, say service provider circles. It is especially the large wind farm operators who are continually reducing their number of service partners and are thus now only working with a few select partners.

And new alliances are being forged in the service and maintenance business. The service provider Reetec has belonged to EDF Energies Nouvelles, a subsidiary of the French state energy company EDF, since 2007. And the energy companies are also active in Germany. In the summer of 2016, EnBW Energie Baden-Württemberg AG took over the Dutch service provider Connected Wind Service A/S. Despite increased cost pressures in the sector, the top dogs from the classical energy economy, who suffered for a long time from the consequences of the energy transition, certainly see opportunities in the service sector. With an increasing number of wind turbines, regular maintenance and repair work guarantees continued incomes.