Over and over and over again: serial defect clause

The serial defect clause is a warranty frequently requested by customers.

It belongs to a classic “tryptic” of warranties allocating risk on the turbine suppliers:

  • General warranty, for defect in design, manufacturing, installation, etc.
  • Power curve warranty
  • Serial defect warranty

Generally speaking, a serial defect is a component defective on a significant number of turbines. If there is a certain percentage of defective components, the warranty force the turbine seller to replace it on all the turbines.

As you will imagine, the tricky part is the specific definition of the clause.

Among the key point to be defined these are specially important:

  1. The definition of defect / defective.
  2. The time-frame for the defect to appear. How many years?
  3. The reason for the defect. Is the root cause the same? You can have for instance many blade failures caused by different problems.
  4. The percentage of failures needed to declare a serial defect. Is it 10%, 20%, more?
  5. The population of turbines used to calculate the percentage of failure. Only the wind turbine in the wind farm, all the turbines of the same model owned by the customer, all existing turbines of the same model?
  6. Who should confirm the existence of the defect. A reasonable compromise for this point can be an independent third party.

The reason behind this clause is that such serial defects happened in the past - not only in the infancy of the wind industry, but also in more recent years when components have been replaced on massive numbers of turbines, even of Tier 1 manufacturers.

Without this clause the buyer can be left in a very uncomfortable situation where maybe he is aware of the (latent) problem but only if the components that fail during the Warranty or Service period are replaced.

Transfer of title & transfer of risk

Transfer of title and transfer of risk are 2 key concepts in wind farms contracts (and, presumably, in many other comparable businesses). They appear in both EPC and Supply Only agreements.

This is what they usually means:

Transfer of title (ToT): the ownership (of the entire turbine or of one of the component of the wind farm, such as the foundation) is transferred to the buyer.

Transfer of risk (ToR): risk of damages and losses is transferred to the buyer.

Although it may look counterintuitive they do not have to happen at the same point in time: for instance, an EPC contract could have transfer of title when a certain percentage of the wind turbine is paid -for instance, 80%- and transfer of risk only after commissioning (that is, the turbine is installed, tested and ready for production).

When the relevant percentage is paid is defined in the projects cash flow. In general, it could happen that the transfer of title happen many months before wind turbine installation.

The percentage of the wind turbine price to be paid to have transfer of title is usually one of the key negotiation topics. For the sake of clarity, the wind turbine seller would retain some case of security (e.g. a bank bond) until the equipment is paid in full in case the buyer stop the payments after the transfer of title.

It is worth to notice that one party (or both) might be interested in an early ToT or ToR, for instance if they are linked to revenue recognition. For instance, in some Supply Only or Supply and Install contracts revenue recognition is at ToR, so the turbine seller want to have it as soon as possible.

For a variety of reasons, it could be the buyer interested in an early ToT or ToR, possibly even before the completion of the wind farm balance of plant (basically, when the wind farm is not ready for installation). In a similar scenario the turbines would be delivered to a temporary storage area where the ToT and ToR would happen.

One more interesting point is that, in some jurisdictions, a sales tax could become applicable when the ownership of the turbines is transferred. This could be a good reason for an early or late transfer of title in a different jurisdiction.

 

Wind turbines defective parts warranty

Lately I’ve been spending some time trying to learn something more about quality. Although I see that there is no consensus on the business effectiveness of some of these technique I’ve decided to take a certification (ASQ Six Sigma Green Belt) to have a first-hand experience.

One of the first concept I’ve learnt is the difference between defect and defective. This is the standard definition in the wind industry:

“Defect” is defined as a non-conformity, a failure to comply with the Technical Specifications, a flaw in design, manufacturing, workmanship or damage.

“Defective” is defined as a part that has one or more defects and fail due to it.

The key concept here is that in principle it is possible to have one or more defect on a component without having safety or operational problems.

Wind turbines warranties (and presumably other similar equipment) usually are based in the concept of defective – that is, of failure of the component to operate correctly.

The logic is that a failure is usually a black or white concept: either the gearbox is working or it is broken.

However, seen from the perspective of the customer, this definition is not reassuring: a component could have a defect that, even if it’s not preventing the turbine to work, is making it underperforming, unreliable, deteriorating quicker than usual, etc.

Basically the concern of the customer is that the turbine seller will simply “try to keep the turbine alive” until the defect warranty expire (usually after 2 years). Afterwards, it will become a problem of the customer.

For this reason the clause with the definition of defect and defective is usually extensively negotiated. Some possible wording, from the least to the most favourable to the customer, are:

  1. Defective is a part that fails due to a defect
  2. Defective is a part that has a defect that could reasonably cause adverse effects on production or safety
  3. Defective is a part that doesn’t match the Technical Specifications
  4. Defective is a part that contain a defect

Obviously the last one is very onerous for the company who has to mantain the turbine, while the second can offer a reasonable level of protection to both parties.

Why wind turbine blades are made of composite materials?

I’ve received a question regarding material selection for wind turbines blades. The reader asked why there is a predominance in the use of composite materials for the blades instead of wood, steel and aluminium and other materials used in the first glorious, pioneering years of wind energy.

Please note that I’m by no mean an expert so the only intention of this post is to give a very general introduction to the subject. This is a very broad topic involving different engineering branches.

In general the 2 design drivers are weight and stiffness.

A blade should be as light as possible for a variety of reasons:

  • To lower gravity induced fatigue loads
  • To be easily transported and installed
  • To have a better performance

However, it should also be stiff (that is, rigid) for several other reasons:

  • To withstand loads (both wind loads and gravity loads). Wind loads are function of wind speed and length of the blade, and increase from the root to the tip of the blade. Gravity loads are function of the material density.
  • To prevent collision between the blade and the tower under extreme wind
  • To prevent instability (local or global buckling) maintaining its shape

For these reasons blade designers try to minimize the mass for assigned stiffness levels – it is to find a balance between aerodynamic and structural requirements.

So we want less weight (that is lower density) and more stiffness.

Stiffness is expressed by the Young’s modulus of the material – basically the relationship between force and deformation. In general blades are very flexible, stronger in the flapwise direction and weaker in the edgewise direction.

And here is the reason for the use of composite materials. For a given Young Modulus, the material with the lower density is the composite (resin plus glass fiber).

You can see graphically this relationship in a type of graphic called “Ashby Plot” (I attach a version stolen online from a document of the University of Cagliari.

Ashby plot for a wind turbine blade

Wind turbine controlled demolition

A reader of the blog shared the link of this video, showing the controlled demolition of a wind turbine in the UK.

The turbine looks like an old Acciona Windpower model. As you will see, the turbine is connected using a rope to a back hoe and the base of the tower is slowly cut using a blowtorch.

Then the backhoe start pulling, and the turbine fell to the ground pretty much like a tree.

I am aware that this solution has been used in several wind farms in different countries. However, I believe that this method is questionable. I have two concerns:

  • Environmental impact. Not only the turbine destroy a bunch of trees but above all after the impact with the ground the debris flight everywhere. I assume that the area can be cleaned afterwards – however filling the area with fragments of different materials looks like a suboptimal solution to me.
  • Safety risks. You will notice that at the minute 3:00 one of the blades hit the ground and detach itself from the rest of the turbine, moving in the direction of the backhoe. An objection can be that the rope can be long enough – however giving the geometry of the turbine and its different materials, I still see the residual risk of flying fragment hitting the operators.

I would recommend the “component by component” dismantling. We used this solution in a wind farm in Portugal and I believe it is much safer.

To see an intermediate solution (partial dismantling and partial demolition), have a look at this other video.

It is the repowering of El Cabrito, a very old wind farm near Tarifa (south of Spain). By coincidence, that area is also one of my preferred holyday destination, so I have several pictures of the old turbines.

You will see how the crane dismantle the blades and the nacelle. Subsequently, a different tool is used to crash the tower.

Multirotor wind turbine: an update

Some time ago I wrote a post about the interesting concept of multirotor wind turbines, including the full scale prototype built by Vestas with 4 refurbished V29-225kW (that is, with a 29 meters rotor diameter).

It has been installed in a test site of the Technical University near Roskilde, in Denmark - I believe I’ve been there many years ago for the famous rock festival.

After running for approximately 3 years the prototype has been dismantled. The result of the test are still not public, but some information leaked.

For instance, an increase in annual energy production (AEP) of approximately 1.5% has been reported. It is due to an improved power curve, allowing the turbine to reach faster the nameplate capacity.

I’m not sure this result can be scaled to the current turbines in the market – however for a modern WTG a 1.5% increase is a lot of money.

Another counter intuitive fact is that the wake effect (the turbulence generated downstream by the WTG when the wind cross the blades) is minor in a multirotor. Don’t ask me why because I’m not an expert in fluid dynamics.

Additionally the load increase is not significant. That is good, because it has a direct impact on life expectancy of the turbine and on tower and foundation cost.

Moreover noise emission is not significantly higher. This point is especially relevant in Europe or other area with strong constraints in term of noise.

What happen to decommissioned wind turbines?

In a previous post I mentioned my experience with a repowering (a wind farm where the old turbines are exchanged with new models to increase the production and lower the maintenance costs).

But what happen with the old turbines when they are dismantled?

For some of them there might be a new life. There is a market for second hand turbines – some years ago I met one guy who purchased a bunch of old WTGs (I believe they were in the 200 KW range) and made his own wind farm with a very reasonable investment.

However the majority of decommissioned turbines are scrapped. This bring some challenges because not all components are so easy to recycle.

In order of complexity I would say that the least problematic element is the tower – it’s usually made of steel and it can be easily sold at the current market price.

The foundation is another element that can be left untouched below ground or demolished. The resulting material can be used again in construction, for instance in a road embankment, sub base or even as aggregate in new concrete elements.

I’ve also seen a very interesting technical solution where the old foundation becomes part of the new one – in this case you will need to have both the new and existing turbine at the same coordinates.

The nacelle has several different elements, including some that are potentially contaminating (e.g. the oil of the gear box). More complex to recycle but still doable.

By far the most challenging components are the blades. Usually they are made of composite materials – steel and glass or carbon fibers reinforcement in a polymer matrix. Usually this matrix is thermoset, meaning that the polymers are cross linked (that is, it will be very difficult to separate the elements).

The difficulty start from the logistic. Blades are very long elements: the old are around 20 meters, but recent models are already above 50 meters and they need special trucks to be moved. Theoretically you could chop them into pieces before transportation but the tools could not be easily available, and I also see some safety risk in cutting blades on site.

The following problem is what to do with them: as mentioned there separating the components is not simple, so today many blades ends in a landfill. Alternative solutions are currently being investigated but it’s still challenging to find a cost effective solution.

There are also alternatives uses: in northern Europe (Netherlands, Denmark, France) there are several architectural projects made using old blades, such as kids playground, bus stops, seats and even bridges.

PMP methodology & wind farm project management

This week I had the pleasure to pass the PMP (Project Management Professional) exam – one of the two leading certifications for project managers, the other being PRINCE2 from the UK. The exam itself is notoriously not trivial: long (200 questions in 4 hours) and based on a book very hard to read, the Project Management Body of Knowledge (“PMBoK”).

In general I would recommend it, as it provide a solid methodology together with a broad suit of concepts, tools and techniques. On top of that, a great number of terms are defined in detail and this alone is a great benefit as this facilitate the interaction with other professionals providing a common language.

Said that, and totally aware of the fact that this type of methodologies are conceived to be “not industry specific”, I believe that there are many relevant difference between the PMP concept and the way wind farm project management is today, at least seen through the eyes of Project Managers (PM) working for wind turbine manufacturers or Main Contractors.

To give some example, one of the first steps in the PMP standard is the creation of a business case for the project.  This is something that you will hardly see in wind farm construction – maybe the wind farm developer has a business case, but the company building the wind farm is selling a product (the wind turbine) and some services (BoP, installation, maintenance). No need for business justifications, this is the core business.

Additionally, in the PMP methodology the PM should start to define the scope, the deliverables, the cost baseline, etc. I believe that in general the wind industry the PM receive all this inputs from the Sales Manager and/or Tender Manager, and even if there are always open points and deliverables that need to be defined more in detail this is not the main focus of the PM.

I have also rarely seen in wind farm construction a change management system as developed as the one in the PMP standard. I do however recognize that it has a lot of sense, providing a uniformity and a logic in the way changes are analysed and approved or rejected.

Finally yet importantly, the current version of PMP (sixth edition) include a variety of Agile Development concepts. These are more relevant in software development and similar environments: onshore wind farm construction is a business where these evolutionary development and adaptive planning techniques do not usually find opportunities to be used.

The new playing filed: multi-brand wind turbines service

Yesterday I had the pleasure to meet my friend J. here in Hamburg.

J. works for V., a very big Danish wind turbine manufacture. Specifically he works in what looks like the new battle field for our industry – multi brand wind turbine operation and maintenance (O&M).

Basically it means that V. is offering not only Service for its own wind turbine models – it’s providing it also for competitors models, like Siemens/Gamesa, GE and the like.

There are several good reasons to do that - for instance:

  • Operational synergies. If you have wind farms already under maintenance in a specific area adding MW under maintenance will have a lower marginal cost.
  • Knowledge of the business already accumulated. iI you have thousands of WTGs under maintenance you should have a very clear idea of what could go wrong next during the life of the turbine. This  also include more in house knowledge to propose to the customer solutions like “fix it, don’t buy a new one”.
  • Scale factor in procurement: cheaper spare parts due to a very robust supply chain.

Additionally, customers could find interesting the “one stop shop” solution – for instance big utilities owning wind farms with several wind turbines brands might like the idea of having a single counterparts taking care of all the portfolio.

What strikes me the most is the possibility to implement technical retrofits solutions such us the vortex generators on competitors' WTG models. This basically means that when a wind turbine manufacturer discover a new technique to get more energy out of a turbine it could be able (in some cases) to apply this solution to the turbines of competitors.

I suspect that the market will probably move to a consolidation in the Service business arena, were several small to medium companies are operating locally

V. gave a clear example of it purchasing 2 O&M companies, UpWind Solutions in the US and Availon in Europe.

I also believe that sooner or later a war on intellectual property infringement will start, as several components are “tailor made” (that is, fabricated for a specific wind turbine manufacturer).

For sure you can reverse engineer them, but build them again could lead to legal problem. The same apply to the software of the WTG: many improvements are due to new algorithms and control system, and if you want to implement them you will probably need to put your hands on the software of the competitors.

Readers' questions: may I use an anchor cage somewhere else?

I’ve just received this question from a reader. As I believe it’s an interesting topic I’ve decided to answer with a post instead of an email or in the comment section.

“I'm custom broker and I have to classify under HS Code an anchor cage. I have consulted to Classification Office of Argentine Customs Service and they ask me if the anchor cages are designed to be used exclusively in the construction of wind generators, or if they could be used in other constructions, for instance an antenna tower.
I would appreciate if you could help me on this matter.
Kind regards.”

The answer is no – they can’t  be used somewhere else.

There are several applications for foundation cages: power transmission pylons, light poles, mobile phone antennas and other type of towers.

However, anchor cage are dimensioned to fit a specific type of tower. For instance, different wind turbine models have different anchor cages (both the number of bolts and their diameter might vary). You can’t take a generic anchor cage and put it below another tower: the number of bolts, diameter of the tower and size of the bolt would not match.

Some years ago there has been a famous mistake in a wind farm in Brazil – the wrong anchor cages have been shipped (and embedded in the concrete of the foundations). The mismatch between tower bottom and anchor cage was millimetric, so the installation crew tried to install the towers for hours before discovering the mistake. It was the anchor cage for a different model of tower for that specific wind turbine model.

It’s interesting to note that at least a wind turbine manufacturer offer a range of anchor cages with different bolt lengths compatible with a specific wind turbine model. This allow for a greater customization of the foundation and savings in material.