Denmark’s under-performing and curtailed wind turbines have lost DKK 2.1bn in asset revenue 

IntelStor, a renewable energy market research and consulting firm, has uncovered that from 1978 through 2020, Denmark has seen a total loss of 7.85 TWh of wind energy production through a combination of curtailments, faults and failures as well as age-related asset performance degradation. Total lost revenue due to these factors has been calculated to be just under DKK 2.1 billion based on known power purchase contract prices as well as average annual settlement rates for any remaining assets not under contract.

Using audited monthly production data from the Danish Energy Agency, which is a part of the Ministry of Climate, Energy and Utilities in Denmark, IntelStor has now completed the most detailed analysis of the efficiency of wind power ever in the country. The results of the analysis indicate that, of the 9,700 plus onshore and offshore wind turbines that have been deployed in the country, Siemens Gamesa Renewable Energy (SGRE) has a 24.07% lifetime average capacity factor for both decommissioned turbines and currently operational onshore units. That average includes turbines ranging from 10.7% capacity factor for older Bonus models up to 49.6% for the SWT-2.3-113. Vestas has a 22.45% lifetime average capacity factor with turbines ranging from 8.59% for legacy units up to 48.6% for the V116 2.0.

Offshore wind showed higher average performance, but SGRE is still No. 1 with a lifetime average capacity factor of 43.64% including a range from 25.27% for the Bonus B76 units at Middelgrunden up to 48.87% for the SWT-3.6-120 units at Anholt. Vestas has a fleetwide lifetime average capacity factor of 40.8% with a range from 30.94% for the V39/500 units at Tuno Knob up to the V164 8.0 units at Horns Rev III.

Many wind turbines will show an age-rated performance degradation due to a number of factors including component wear and tear. Approximately 29.6% of all the operational and decommissioned onshore and offshore wind turbines in Denmark have shown an age-related performance degradation going back to 1978. This age-related performance degradation is defined as more than a 10% drop-off in lifetime average annual energy production in the out years of an asset which is un-recovered before the asset is decommissioned.

Denmark has a capacity weighted average asset performance drop-off of more than 10% in average annual AEP after approximately 15.43 years for the entire onshore wind installed base, including both operational and decommissioned capacity. For offshore wind that age is 17.54 years.

Performance for different wind turbine OEMs reveals some interesting results with legacy Nordex N27 wind turbines helping to push their fleetwide performance to an average of 19 years before performance degradation hits. Vestas is in the No. 2 position in this ranking as they show just over 16 years and Siemens Gamesa in No. 3 with 15.3 years of the assets in operation before a performance drop-off is seen reflected in the AEP data. Taken in context with the capacity factor analysis, this indicates that SGRE operates at a higher level of performance, but with a shorter life-span compared to Vestas.

A total of 1.9 GW out of the 5.45 GW of onshore wind power capacity that has been installed in Denmark since 1978 has shown at least some age-related performance degradation. IntelStor’s analysis suggests that most of the drop-offs in performance correspond to a timeframe which is only 2 – 3 years prior to the decommissioning of the asset. This makes sense as an asset repowering may end up being a less expensive option than life extension, particularly if the power purchase contract can be renegotiated, or the incentive regime has been modified from when the asset was originally installed to something more favourable.

However, the exceptions to this rule come in the form of approximately 8% of the installed base which has suffered from a permanent degradation in annual production performance from the average in the first 5 – 25 years of operation, but the asset continues to operate at a degraded level for a full lifespan which is between 20 – 40 years.

This is a somewhat concerning pattern, although certainly more pronounced with individual asset owners who privately own a single turbine, and are likely unable to afford expensive operations and maintenance services beyond the basic maintenance and service levels. While much of the performance degradation for these type of assets is potentially recoverable, asset performance management companies must work with asset owners to decide that it is economically viable to investigate the potential of an asset performance improvement.

As a result of the age of a large portion of the installed base, there is a massive imperative to repower older and under-performing assets. More than 90% of assets which are more than 20 years old in Denmark operate below their quoted P75 energy yield, and a significant percentage operate below their P90 yield ranking. This has a profound impact on the profitability of assets which can help to attract investment in the future.

Only 6.63% of operational onshore wind energy assets show that they meet or exceed their P50 performance quotation. Approximately 25% of operational assets meet or exceed a P75, but not their P50, while 48% meet or exceed a P90, but not their P75, and a whopping 20.8% fall below their P90 performance quote based upon their lifetime average AEP and capacity factor analysis.

The distribution is also fairly well spread amongst the major wind turbine OEMs who operate large portfolios in the country, including Vestas and Siemens Gamesa. Siemens Gamesa does show slightly higher portfolio performance with only 27.36% of their operational fleet showing a performance under their P90 compared to Vestas who shows a 33.27% of their operational installed base. Perhaps unsurprisingly, turbines from other wind turbine manufacturers are the highest concentration of under-performance in the country, underscoring why the industry has consolidated in the past 35 years with only the top companies surviving.

These trends will help to inform project developers about which assets may be under-performing those of other asset owners who have the same make and model of power generation equipment in their fleet. Additionally, benchmarking will help shape future power generation purchase decisions amongst the project developers by allowing them to visualise the relative performance of a wind turbine or wind park using a specific make & model of turbine. The longer the time-frame to asset drop-off coupled with a high capacity factor is a desirable combination for an asset owner, or prospective investor.

Such pronounced losses are avoidable, with better grid management technology as well as a more robust maintenance regime. Asset performance management companies may also be able to assist operators to extract more value from their fleetwide performance as we move towards higher penetration of renewable energy in every country throughout the world.