Plummeting costs increase wind power competitiveness

The price of operation and maintenance contracts in the global wind sector has dropped 38% in the last four years, according to Bloomberg New Energy Finance.

The organisation has compiled a wind operation and maintenance price index by analysing confidential contract data from 38 major developers, and the findings suggest that the drop in prices will boost the sector’s competiveness significantly.

Results also showed that the UK and Eastern Europe had the highest pricing for full-service offerings while the US displayed the most competitive pricing of all markets.

Onshore wind farm average prices for full-service operation and maintenance offerings fell to €19,200 (£15,360) per MW annually in 2012 from €30,900 per MW in 2008. This shows a cumulative decrease in price, which included scheduled and unscheduled maintenance work and component replacement, of 38%, or more than 11% a year.

Bloomberg has put the decline in prices down to increased competition, as turbine manufacturers vie for service contracts as well the improved service performance of the underlying turbines.

The data covers 104 confidential and undisclosed operation and maintenance contracts, totalling 5.3GW of contract capacity in more than 24 markets.

Bloomberg New Energy Finance chief executive Michael Liebreich said: “Wind power has done much to improve its competitiveness against gas-fired and coal-fired generation in recent years, via lower-cost, more technically advanced turbines, and more sophisticated siting and management of wind farms.

“This new O&M Price Index shows that servicing wind farms at the operating stage is also becoming much more cost-efficient.”

The operation and maintenance index also revealed that the average contract duration has risen from 4.5 years in 2008 to 6.9 years in 2012, as manufacturers attempt to lock in longer-term agreements.

In addition, the findings showed that participants expected operation and maintenance pricing to remain stable at least until 2015.

Conor McGlone

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