Unleash your growth potential by insourcing wind O&M

Global wind power capacity increased to over 744 GW in 2020. To serve the rapidly growing needs of wind fleet owners and operators, wind turbine generator (WTG) OEMs have developed the specialized and profitable discipline of WTG O&M services. Many owners and operators have opted to outsource their O&M activities to OEMs through performance warranties coupled with full-service contracts, often at costs upwards of US$60K per WTG/per year for the life of the contract.

However, the availability and competitive cost of modern asset performance management (APM) tools, which are supported by artificial intelligence (AI), have led many to rethink their outsourcing decisions. Larger owners and operators often have experienced internal O&M functions, which makes the adoption of APM solutions a natural extension of their operations. While many less experienced wind turbine owners and operators with limited fleet sizes may find comfort in the large installed base of the top 5 global wind OEMs, they can also take advantage of APM solutions to augment their O&M capabilities and bring that function wholly in-house. Indeed, an increasing number of wind owners and operators are deciding to take their destiny back in their own hands – for five primary reasons as described below.

Share this article


1. You know your assets best

Leading OEMs currently oversee the largest installed base of wind turbines and can legitimately claim to have access to the “most data” to inform O&M strategies. However, data volume does not always equate to data quality. OEMs may not have access to specific data of your wind fleet such as local wind and site conditions, O&M history and preferences, or OEM portfolio mix – all of which ultimately affect the quality of your O&M decision making. Also, most data does not take into consideration the institutional knowledge from your O&M team’s experience in the field. What’s more: The larger the “big data” a WTG OEM relies on; the more costly their full-service performance warranties may become over time.

For an example of how blanket OEM data is often insufficient to make operational decisions, we can look at recent events that occurred at Texas's electrical grid in the US. The 2021 WTG freezing challenges that contributed to a regional days-long black-out were not sufficiently forecasted by global averages in WTG icing rates supplied by the OEM. The Texas Interconnection owners and operators would have benefitted from a system that drew on actual data from their systems combined with the experience and site-specific knowledge of their local field crews.

Independent third-party APM software solutions built specifically for wind turbines allow precise malfunction forecasts by tailoring prognostics to your specific assets – regardless of which OEM produced these assets. Leading solutions, such as Hitachi ABB Power Grids’ Lumada APM, allow organizations to combine field service and O&M management data with expert knowledge and experience as inputs that prognosticate the health of your specific assets and their most critical components. This approach is far more powerful and accurate than APM models from most OEMs that apply more generally across a wide array of turbines. You know your assets best and the best solutions give you full control of how your asset health is prognosticated, resulting in the most accurate data to make strategic decisions.

2. The hidden cost of performance warranty exclusions

The world’s top 3 WTG OEMs are pure-wind players. Because of their experience in WTG manufacturing and growing expertise in wind O&M, their performance warranties typically stop at WTG outgoing power export cables and don’t include the most critical components in your system: the substations.

Avoiding downtime of wind substations should be the first priority for every wind owner and operator because preventing downtime for substations prevents 100% of unexpected lost production. Compare that to unexpected downtime of one 6 MW WTG in a 300 MW wind park that results in avoiding just 2% of unexpected lost production.

One of the reasons that substations are often overlooked in performance warranties is because substations, in contrast to WTGs, are not the core business of wind OEMs and have no or limited rotating components and many OEMs argue that only rotating components need to be protected. Experienced owners and operators know that this is a dangerous stance because substations are the most critical assets in their systems. Maintaining substation uptime is a basic component of O&M strategy and excluding substations from performance warranties can leave systems – and their operators – vulnerable.

Another common practice that increases risk exposure is the tendency to exclude other generation assets from the APM solution. Overall asset performance in your portfolio may be determined by hydro or conventional power assets, not wind parks. The best third-party APM solutions cover your entire asset portfolio – from WTGs to substation equipment to non-wind renewables and/or conventional generation assets – regardless of the manufacturer.

3. Sustainable wind O&M philosophies look beyond 2-5 years

The duration of most “full-service” wind O&M contracts offered by WTG OEMs is between two and five years. In these offerings, the OEM has two primary incentives: to optimize asset up-time and to maximize availability or yield. The cost to the OEM to optimize up-time comes at lower cost for two to five years rather than thinking more long-term. Increasing lubrication of gearboxes, the most critical component in geared WTGs, may lead to the gearbox providing full output for a couple of years but repairing or even replacing the gearbox early enough be a more economic option considering the full WTG lifetime of 20-25 years.

Second, OEMs have a hidden incentive to overlook asset or component malfunctions at times when their own software hints to such. For example, if a rotor is predicted to fail a few months after expiration of a current full-service performance warranty, the most attractive option for the wind OEM is to disclose this only when the next term for such contract is negotiated (i.e., at the end of the 2-5 year term) as the renewal contract’s value increases with the threat of key components failing soon.

Taking O&M into your own hands prevents you from bearing the cost for what economists call the “principle-agent challenge” – a conflict in priorities that can arise between an entity and the representative authorized to act on their behalf. In these instances, the agent (the wind maintenance supplier) may act in a way that is contrary to the best interests of the principals (wind system owners and operators). This dynamic often results when owners and operators are overly reliant on the OEM’s expertise.

Increase your O&M share of wallet

With the most attractive wind-sites (e.g. permittable coastal, remote, other high-wind areas or greatly grid-connected sites) being occupied, finding profitable sites for new installations is becoming increasingly more challenging. Accordingly, global analysts forecast a period of stagnating growth in new wind turbine installation, particularly in mature onshore wind markets such as Europe, the US and China. Despite this, your business has growth targets. The higher your share of wallet in monitoring, analyzing, prognosticating and acting upon your wind assets’ health, the higher your share in the wind industry’s most attractive profit pool. This may lead to your O&M department’s growth in increased full-time employees.

Third-party APM software has been traditionally considered by CFOs or CIOs to help realize top-line growth potential without impacting the bottom-line through costly in-house O&M learning curves.

57% UF

57% of all WTG failures are still unplanned...

Key unplanned component failures by priority:

  • Bearings
  • Blades
  • Electrical components
  • Drivetrains
  • Others

1.7% LPF

...leading to 1.7% lost production which was unexpected

  • In average, US wind owners + operators lost 6.2 days of production p.a. in 2019, caused by unplanned repairs.
  • This excludes losses caused by preemptive shut-downs or unexpectedly long delivery times for spare parts


...and costing 34 k USD / WTG p.a.

For each single Wind Turbine Generator (WTG), 34k$ are lost p.a., of which...

  • 16k$ for spares + materials
  • 6k$ for major correctives
  • 5k$ for minor correctives
  • 1 k$ for unplanned repair downtime losses
  • 6k$ for lost Annual Energy Production (AEP)

5. Largest profit pool in wind is O&M

With guaranteed and generous feed-in tariffs (FiTs) for wind power being a privilege of the past in >70% of global markets already, and remaining available permittable and connectable wind sites offering 3.5-5 m/s of annual average wind speed at hub-height vs. 5-9+ m/s in average permittable and connectable sites in the 1990s, times of highly profitable wind power generation have come to an end in various countries. As a result, all WTG OEMs have focused on launching lower-wind models with larger rotors and lower cut-in speeds for both global on- and off-shore wind markets during more recent years. Likewise, wind OEM’s EBIT rates from their O&M business classically lie in the 20%+ ranges vs. EBITs from their business’ overall remaining at below 10% without exceptions.

How Hitachi ABB Power Grids can help

Hitachi ABB Power Grids’ Lumada APM for Wind is a powerful solution that integrates decades of expert knowledge and domain experience with cutting edge AI capabilities to help you predict and optimize the performance of your specific assets across your entire asset portfolio – regardless of the manufacturer. With a comprehensive, near-real-time understanding of your assets, you will be able to make faster, better and more accurate decisions – from the field to the boardroom. The solution allows you to insource O&M capabilities so you can have more control over your operations and comes at marginal cost when compared to prices for classical full-service contracts with performance guarantees. This brings the profit pools in modern wind power back to your pocket.

Proof from the Field

During a proof of concept for a major owner and operator of offshore and onshore wind fleets, the validation process of the Lumada APM solution indicated WTG failure six months ahead of occurrence, when simple diagnostic tools didn’t indicate any issues. The issue prognosticated was a result of analyzing main bearing temperatures, normalized for ambient temperatures. During the following months, indications were re-confirmed that enabled the owner/operator to take action to prevent multiple WTG failures. The savings of potential lost revenues due to the accurate and timely prognostication was more than 500 USD per day, per turbine in addition to an unknown amount of collateral damage that may have occurred if the issue were not addressed.


As in every infrastructure business, O&M of existing operations is more profitable than new installations. When considering growth opportunities, what really counts for power asset owners and operators is how their O&M function is executed. Paying upwards of US$60K per annum per WTG for full-service performance guarantee contracts and leaving maintenance works to the OEMs should only be considered by the smallest and unexperienced wind owners and operators.

You know your assets best. The power and ease-of-use of modern APM solutions means it is time to take full control of your O&M function – and your path to growth of your enterprise.

Learn more about how Hitachi ABB Power Grids’ Lumada APM can enable you to unleash your growth potential by insourcing your wind O&M.

Hitachi ABB Power Grids Expert

Nayan Shetty

Gian Schelling

Global Business Development
Hitachi ABB Power Grids

Gian Schelling is Hitachi ABB Power Grid’s global Business Development Manager for the Automation business unit. He is responsible for bringing our automation value proposition to clients and taking their feedback back into the organization for future product development. Gian looks back on 13 years experience from the Renewables industry. While he spent most of the time in wind power, developing global business out of various European countries for leading OEMs, his experience and responsibilities also include business development for battery energy storage and solar solutions.

You may be interested in:

Card image cap

The advantages of achieving wind power stability

Improving the maintenance lifecycle benefits productivity, sustainability, safety and more.

Read more
Card image cap

The benefit of “when” in wind energy

The entire enterprise gains from forecasting not only “what if” but also “when.”

Read more