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How much will my Operation Costs be?
Operations and Maintenance (O&M) Important Information About Large Turbine Projects |
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How much will my Operation Costs be? Operations and Maintenance (O&M)
You can choose to provide most of the O&M yourself once you are trained by the company technicians that do the turbine commissioning. Third party and turbine manufacturers also do turbine O&M for $6,000 to $10,000 per year for a 1 MW size turbine. Each different type of turbine has its own O&M costs; some are considered higher maintenance and cost more yearly for maintenance. This O&M includes monitoring the turbine 24 hours a day/seven days a week. You need someone on call at all times to solve the many small turbine controller issues that arise (and to shut down or start up your machine). These modern large machines are often warranted to run at 95-97 percent availability. This is achieved partly by the quality of the machine and partly by the quick response of the O&M team. Down time is lost money. You'll make most of your money on the 30-60 days per year that the wind blows over 30 mph at hub height and the turbine generates at close to peak output all day. You want to operate those days or face losing significant income. If you are selling electricity to ComEd in the summer for 6¢/kWh during peak summer hours (ComEd's quoted avoided cost) and your 1 MW turbine misses a windy day, you will have lost over a thousand dollars in income for that 24-hour period. That's more than 1 percent of your annual income.
Insurance
Insurance costs range from $8,000-$15,000 per year for a 1 MW size turbine. There are several California based insurers with significant experience insuring wind machines; they can provide valuable input on your project costs by outlining the various scenarios you need to protect yourself against. WindPro Insurance is the largest provider; contact them at info@windpro-insurance.com or at (760) 836-0417. You can also visit their website at www.windpro-insurance.com.
Administrative and Legal
At minimum, you will have to hire an accountant to prepare your taxes, but you will likely need other professional services to deal with contract issues, billing, insurance settlements, and whatever service issues arise. A developer typically budgets $6,000-$7,000 per year per turbine for administrative and legal costs. Do not assume that you can put up this big machine and just sit on the porch enjoying the income. There will be plenty to do. You need to budget yourself or another person five hours or more every week to deal with issues relating to the turbine.
Contingency
This term refers to an amount of money you will set aside should an unforeseen problem arise and require immediate attention. For example, if lightning strikes the machine, you will want to get it repaired quickly. The repair could require you to use contingency money rather than wait for the insurance claim to be processed. Often, a set amount will be paid into a contingency fund each year.Important Information About Large Turbine Projects