WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 53
The Operation & Maintenance (O&M) stage typically accounts for 1520% of the value creation. This includes maintenance and operational
management. Effective O&M practices can reduce downtime and
maintenance costs, thereby improving IRR. Predictive maintenance
and advanced monitoring systems can also enhance operational
efficiency.
Ramping up from several to hundreds of GW portfolios requires both
intense M&A and integration activities, and fast-paced operation
scaling. Consequently, renewable players generally end up with
unoptimized organizations and colorful landscapes of business
processes and IT/OT urbanizations. To restore profitability and
operational cost-efficiency, the renewable industry must undergo
a deep transformation. This includes adopting industrialization
strategies, excelling in operations, rationalizing the IT portfolio, and
implementing data-driven architecture and business processes.
Unlocking operational agility and scalability
Determining the most scalable target operating model begins with
a thorough core/context analysis, pinpointing key differentiating
activities and margin generators, along with the best candidates
for outsourcing. Effective industrialization relies on a clear strategic
intent, trust in the partner ecosystem handling outsourced tasks and
the seamless efficiency of continuous processes, ultimately creating
an extended enterprise.
Achieving operational excellence
Developing a best-in-class and granular asset operations program and
ensuring the deployment of the improvement levers at scale supports
profitability. Clear and standardized business processes reduce
operational hurdles, improve collaboration and reduce contingency
costs in execution, and increase asset profitability in operation. This
will also enable a focus on assets that generate the most value and/or
have the greatest potential for improvement.
Additionally, building an asset performance monitoring solution can
facilitate continuous improvement by sharing common tools and key
performance indicators. This can help set target operating expenses
for different types of plants.
Optimizing O&M contracts
Establishing appropriate KPIs and optimal service-level agreements
(SLAs), benchmarked against similar sites and leading O&M providers,
is essential to ensure performance and asset availability. Asset
availability KPIs are considered more accurate than production level
KPIs to evaluate O&M services.
Implementing a bonus/penalty mechanism in contracts incentivizes
partners to meet or exceed performance goals, particularly in
downtime avoidance. Penalties are typically capped at the contract’s
annual value, while bonuses can reach up to 50% of the contract
value for surpassing SLA targets.
NEXT
ARTICLE
Performing regular audits and benchmarks of assets and O&M
providers are crucial. This includes evaluations of service catalogs,
SLAs, innovation, technology and competencies. Extending these
audits to equipment and spare parts providers is essential due to the
impact of their quality on operations.
Securing long-term maintenance contracts could lead to cost
savings through economies of scale and by maintaining high-quality
standards. This is because service providers typically offer discounted
rates for guaranteed long-term commitments.
Innovation & digitization
Streamlining IT/OT landscape via post-merger integration and strict
tooling guidelines while expanding portfolios, is key to enhancing
and sustaining profitability. Adopting new technologies and datadriven asset management processes (e.g. performance forecasting,
maintenance optimization and weather management) boost
performance and reduces asset TCO. These advancements ensure
business processes evolve, maximizing the value of technology
integration.
Figure 3 illustrates how the widespread availability of internal and
external data and use friendliness, drive innovation across the
renewable energy value chain. Organizations now focus on unified
architecture, database and advanced analytics to enhance asset
intelligence. Top asset managers use comprehensive datasets to
create smart dashboards for CxOs, utilizing GenAI for real-time
resource and investments decisions.
WEMO 2024
Excellence in industrialization,
operations and digitalization
GLOBAL
OUTLOOK
HOME
How to make money
from renewables
53
01
