Growing competition for wind turbine service revenue is forcing original equipment manufacturers to up their game in another important service for the equipment they make — remote diagnostics. 

This month, for example, Siemens Gamesa Renewable Energy (SGRE) revealed that its Model-Based Diagnostics system has been upgraded to work with machines of any make.

The system, which has been in operation since 2011 and uses as many as 500 predictive models to assess the likelihood of component failures, is already analyzing data from around 17,000 onshore and offshore turbines in the SGRE fleet across 44 countries.

“We are now creating models for GE, Senvion or Vestas turbines, for example,” an SGRE spokesperson said in an email. “Our objective is to cover more systems with even more advanced models.” 

The Model-Based Diagnostics system is an internal tool that SGRE uses to improve the value of its full-service contracts. It works by looking for data signals that have been associated with component failures in the past, anticipating faults and flagging when a part may need to be fixed or swapped out.

SGRE estimates the tool has flagged up 50,000 potential failures over the last nine years and helped the company carry out preventive maintenance to avoid more than a million hours of turbine downtime. 

This kind of diagnostic expertise can help solve a major headache for the wind industry. Unforeseen breakdowns cost the sector around $8.5 billion a year, according to Wood Mackenzie. They can also shorten the lifespan of turbines by stressing components not directly related to the failure.

“There's a mutual benefit here,” Henrik Pedersen, SGRE’s solution architect for diagnostic intelligence, said in an interview. “We spend a little bit less on doing the service activity for the customer, and the customer gets additional energy production.”

The battle for service contracts

SGRE believes the Model-Based Diagnostics system could serve to enhance loyalty to the company’s full-service contracts, Pedersen said. And there is no doubt that the need to grow service revenue is a high-priority concern for most major wind original equipment manufacturers.

OEMs are offering extended service contracts as a way of shoring up revenue amid ongoing market pressure to create more cost-effective turbines with lower levelized energy costs. 

Although competition in this area is fierce, recent research shows full-wrap operations and maintenance costs per turbine have risen by more than 12 percent over the last 10 years.

However, for now, it remains unclear whether diagnostics systems such as Model-Based Diagnostics can really enhance customer loyalty — or whether they are simply a way for OEMs to cut in-house costs in an increasingly cutthroat market.

Large asset owners, such as Enel Green Power of Italy, commonly prefer to take care of operations and maintenance in house.

“OEMs’ capacity for remote monitoring does not influence Enel's turbine purchase decisions,” said Luigi La Pegna, head of global operations and maintenance at Enel Green Power.

“Our strategy is to perform monitoring internally, leveraging our team's technical expertise and digital platforms. Enel's ‘digital eyes’ are getting even closer to assets and local employees thanks to new emerging technologies like smart glasses [and] edge computing,” he said in an email.

For many, the focus is simply on performance rather than the tech that delivers it.

“If I put myself in the shoes of the buyer of turbines, I am not going to care at all about what technology they are using in order to make sure that I get the availability that I want,” said Jonas Corné, CEO and founder of the asset management software developer Greenbyte, in an interview.

“What I would prefer is that I just get an airtight contract that tells me I will get 98 percent energy-based availability — or even better, that I get 98 percent revenue-based availability. If they're using machine learning or whatever, that won't really matter to me. I would be looking for security.”

Independents reluctant to take the remote diagnostic plunge 

The access to vast intellectual property, turbine data and computing power that OEMs have should, in theory, give them a clear edge when it comes to service delivery, said Corné.

This does not appear to be the case in practice, though, which is why independent service providers still occupy a significant niche in the market and there is a growing trend for asset owners to bring servicing in-house.

“A telling point is that in the United States, several large asset owners rely on the strength of operational practices rather than digital technology,” said Daniel Liu, principal analyst for renewable energy operations and asset management at Wood Mackenzie Power & Renewables.

“What they are actively signaling is that they do not think there's a use case with remote diagnostic systems.”

Corné, too, said remote diagnostics are not a regular topic of conversation with wind farm owners. That’s not to say they might not appreciate tools to improve the profitability of their assets, of course.

But the perceived cost-benefit of such tools is low, and unless they are bundled in existing full-service contracts, turbine manufacturers will need to overcome asset owner concerns on cost versus benefit of deploying digital analysis systems for operations and maintenance.

"In general, many asset owners are not yet willing to spend capital and refurbish existing fleets with the infrastructure necessary to realize the full benefits of digital analysis," said Liu.