Breaking down the AM and O&M silos for utility solar

By K Kaufmann

In conjunction with its first-ever conference on Solar Power Asset Management & Performance, set for Jan. 21-22 in Newport Beach, California, the Solar Electric Power Association (SEPA) will release a new Asset Management and Operations and Maintenance Resource Guide.

Both the conference and the guide are part of a new initiative that SEPA will be rolling out over the course of 2016, said Daisy Chung, SEPA Research Manager who is leading the effort. The growing interest in asset management (AM) and operations and maintenance (O&M), by utilities and solar developers, she said, reflects the increased importance of large-scale solar in generation portfolios.

Daisy Chung, SEPA Research Manager, is leading the group’s new intiative on utility solar asset management and operations and maintenance.

“What we’re seeing, and hearing, is that a more integrated approach is needed for tracking financial and operational performance for these projects,” she said. “Asset management for solar involves a few more layers than for conventional generation. Asset managers — and O&M teams — have to switch some of their thinking and look deeper into what’s really going on at a project site.”

In the following interview, Chung talks about the origins of the AM and O&M initiative, some of the key issues and challenges that are arising in the field, and SEPA’s vision for creating a knowledge and networking base that will help develop a range of solutions and best practices.

How did the idea for the new resource guide and conference begin?

It really started with questions from our members. A lot of what people were asking was O&M-related — “Hey, I’ve got this issue that we didn’t expect when we put up the solar.” Either they’re not finding solutions or, if they do, the options may not exactly fit their situations.

We have a lot of fragmented information. A lot of utilities have solar projects with power purchase agreements (PPAs), and a lot own their own projects — and people in the field also have a range of understanding of the issues involved, from very basic to more sophisticated. Some AM and O&M on PPA projects may be handled by solar developers with minimal understanding of the utility’s needs and perspectives.

And even where information is available, it may not cover the topics or be in a form they’re used to dealing with. People may be using different terms, or they may use similar terms, but have different meanings for them. So we wanted to bring a lot of different information together and build a more unified way of doing things — help develop clearer language and better metrics.

What kind of problems and issues are arising? It seems like the main focus for utility-scale solar up to now has been on project development — siting, permitting, financing — and AM and O&M are kind of add-ons instead of being considered on the front end.

That’s a pretty good way to put it. Utilities have really good, in fact, some of the best practices in managing their conventional energy assets, but when it comes to solar, the way that they get into a project is a little different.

In solar, you have a developer who says we’re going to deliver your project — whether for a PPA or a utility-owned project — but the developer may not have direct control and management of the engineering and the labor for installation for that project. Parts of the project could be outsourced, and the utility might not have a lot of transparency. Then the project is expected to last for 20-25 years at a certain performance level that may not be reached because of the intricacies or lack of specifications.

It can get pretty technical — trying to identify optimal settings for inverters or what happens when a part fails and the original manufacturer has gone out of business.

Another thing you talk about in the guide is how AM and O&M have traditionally been seen as essentially separate functions — which doesn’t seem to make sense when operational and financial performance are so clearly linked.

What you have to remember is that solar AM and O&M managers — whether on PPA or utility-owned projects — may be looking at different metrics in different ways. Asset managers are tracking the higher-level financial performance of a project — they look at the contracted availability of a project, how much it’s supposed to produce,but they may not necessarily look at the raw availability, which is closer to the actual output.

Source: Sandia National Laboratories and SEPA

If you’re an asset manager, you just know some sort of hardware failure or signal occurred, and it caused the plant output to drop. Your initial reaction may be to think the problem was with O&M; they didn’t do anything to prevent it, or if they did, it wasn’t done at adequate levels.

O&M’s focus is at the ground level, dealing with the nuts and bolts of keeping project output at appropriate levels. They have annual budgets they have to work within, so if a major equipment breakdown occurs, they may have to triage it to prevent or minimize cost overruns. Then preemptive maintenance may be postponed. Their reaction to AM concerns may be — “Your expectations were not very realistic to begin with.”

What particular issues and areas do AM & O&M teams need to start talking about with each other, to get out of their respective silos?

Finding common language and definitions is a good start. A project contract may involve a lot of stakeholders — financiers, warranty representatives, insurance experts — in addition to the developer and utility. And they may be agreeing to a set of contract terms and conditions that have risks that may not be clear or may be understood differently by different people. That is a huge problem. Similarly, the two sides need better communication and standardization on the metrics they are looking at to measure project performance.

Cost overruns are another big one — as I said, because budget limitations can result in delays or deferment of preventive maintenance. Small problems can snowball, affecting reliability on certain equipment on certain parts of the site; and when you finally realize that your performance is very low and fix it, it gets written off as an over-budget item. Better coordination of AM and O&M might look at how to factor in these contingencies up front, not only to prevent cost overruns but to maintain performance of the site for the long term.

What we’ve done in the guide is look at these and other issues and provide brief, targeted lists of available articles and other resources. It’s a first step toward creating a common base of knowledge, which we hope will lead to more conversation and information sharing between AM and O&M teams. Ultimately we would like to see O&M factors be considered during plant specification, prior to design.

What are the next steps or goals for the initiative? What would you like to see happen?

This initiative has, from the beginning, been driven by the questions and feedback we’ve received from our members, and we want that focus to continue, especially in the working group. We’re still researching the topics the group wants to explore and what kind of results they want to produce.

Our goal here is to provide a thorough understanding of the utility perspective — what the solar project AM and O&M problems look like, where and how they pop up. Utility-scale projects are driving most of solar capacity growth, and more utilities are choosing to own their own projects. Consequently, industry stakeholders do need to understand utility concerns and priorities. For example, O&M providers may be trying to compete for utility contracts on cost alone — being the cheapest — when a utility may be looking at entirely different metrics.

One significant trend — a lot of O&M providers are now taking on asset management roles. So things may be starting to converge. We may not all be on the same page yet, but we’re going in the right direction.

K Kaufmann is SEPA’s Communications Manager. She can be reached at [email protected].