Please find below the eight ways identified in the feasibility study to diversify the wind aftermarket.
1. Exchange components among WTG owners
This is probably the lowest hanging fruit for our collaboration.
O2O SPARES offers you a digital solution in which you can directly identify peers who use the exact spare you need. You punch in a part number, and a list of peers with this part in their turbines will evolve. You then contact all of them through our system. If you find owners who may want to rotate stock, your company will deal directly with that company outside O2O SPARES.
In our pre-study, we discussed creating a legal framework to govern this exchange of components.
Then in other more mature industries, we found asset owners exchanging components for several years. They claim that a legal framework that would foresee all different kinds of exchanges is possible.
They hand over all negotiations directly to the asset owners and within their spare parts collaboration they have an exchange of components that takes place on a weekly basis.
This seems to be a more simple, stable and proven solution. If we follow their example, we will also avoid months of negotiation between the legal departments of giant energy companies to produce such a framework agreement.
2. Enabling the wind asset owner to sell components
In a perfect world your stock is always optimized. Wind asset owners knows that this is not always the case in the real world.
You want to stay away from production losses and over time it turns out you have built too much stock.
You are moving away from certain technologies and are left with components for which you have no use
You managed to make a very favourble deal on specific components and have directly a need to sell some components
You are decomissioning a wind farmand have a surplus of components that are no longer needed and therefore are sold off
Limited storage space could necessitate the sale of surplus components to free up room for other critical parts or activities.
Entering into new partnerships or joint ventures might lead to the reallocation of resources and the sale of redundant components
To support the wind asset owner who might have such a need we are offering the service to sell these components
3. A Supplier Portal
Being part of this collaboration means that your company would have more suppliers for each component. Your company will have more options and can negotiate better. The top directors among the wind asset owners have decided to collaborate on mapping suppliers instead of trying to be best in isolation. The wind asset owners have appointed O2O SPARES to build a supplier portal. As a first step, the wind asset owners will share their complete list of suppliers within wind farm operations with O2O SPARES, and O2O SPARES will then make it accessible for the wind asset owners so they can search, compare and initiate bidding among suppliers.
4. Creating physical spare parts pools among WTG owners
This already exists among a handful of WTG owners in Finland. In their pool, they have a transformer for a substation. A similar initiative exists in France, although they don’t have the same level of Sisu. Their project is currently stuck as they can’t decide how to handle such a pool in their bookkeeping. They have full control over how to handle production losses in their bookkeeping, and this is where they are.
Transformers have a very long lead time and can create huge production losses. Because of this, Finnish energy companies have found a way to lower this risk through shared expenses.
These Finnish companies have bought a transformer and some long-lead-time substation spares. They store these spares with an external company that is competent to replace them.
If any of these energy companies need the transformer, it will be replaced quickly, and a new transformer will be ordered and on its way.
In meetings with energy companies considering joining O2O SPARES, we had the question: What if two companies needed a new transformer simultaneously? In that case, the first one that acquires it will have the transformer and be able to avoid huge production losses. The second one to acquire it will be in the situation they would be in without this collaboration. Nevertheless, it is very unlikely that two companies would have this need on the same day. As a new transformer is ordered directly when exchanged, the possible production losses for the next company that will need one will decrease daily.
To significantly reduce risks and shared costs.
At O2O SPARES, we can apply the same logic but with many collaborators. It is not unusual that the supplier will start producing it only once you order a transformer. The lead time for a transformer can then be up to one year. Considering this lead time, a couple of weeks of container shipping would not greatly impact the business case.
This allows us to include a much higher number of energy companies and have more transformers in stock.
Including more energy companies will significantly reduce risks and shared costs.
5. Keeping track of component obsolesces
Being dependent on the OEM means that owners have no backup plan for obsolete spares and have to opt for more expensive spares offered by the same OEMs. The spare parts collaboration will make the wind asset owners aware of which components will soon become obsolete and which components are obsolete. The information to achieve this comes both from wind asset owners collaborating and from our detectives. Our proven concept also has this service where components are marked up: “Soon to be obsolete” and “Obsolete”. No operator wants to be in a situation where a spare is needed and then find out that it is obsolete. Especially operators of older wind turbines want this service.
6. Digital Spare Part Pool
Owner A has a gearbox in a Siemens 3.6 turbine that breaks. The lead time for a new gearbox is three months. Let’s say that Owner A will be suffering X in production losses for these three months. Now, let’s say they can take a gearbox from one of the other companies: Owner B. The agreement for doing so is that if Owner B would suddenly need this gearbox, Owner A will cover their production losses.
When Owner A takes the gearbox, they immediately order a new one.
If Owner B suddenly needs this gearbox two months after it was taken by Owner A, the production losses to be paid by Owner A are equal to X divided by 3.
The worst-case scenario is that Owner B would need the gearbox on the same day as it was taken by Owner A. Then Owner A would need to pay X. So the worst-case scenario is identical to what we have today, i.e. not having a spare parts collaboration.
This is a low-risk win-win scenario that helps us avoid many production losses. The insurance companies are very positive about having WTG owners create such a collaboration.
More advanced with SAP integration and wind asset owners making spares available for others
A digital spare part pool will streamline the wind asset owner’s operations. Once needed, log into SAP and order the component. With agreements and logistical arrangements in place, the component will be on its way with a given arrival date.
7. Alternative components - more options & suppliers
The knowledge of alternative components can create many new solutions. Leadtime can be improved; you get more options, more competition, and can better negotiate terms and conditions
By specifying form/fit/function with RDS-PP the operator or punching in a spare part number for a specific turbine model, you will be able to find out if it is possible to use alternative components. Each alternative component gives you a new range of suppliers and a more diversified aftermarket.
8. Reduce inventory
Several components across different turbine platforms are, in fact, the same components. GE uses their part number, and Vestas uses its part number, but it’s the same component from the same manufacturer. Many wind asset owners have managed to figure this out for several components. By collaborating, you will directly get rid of a lot of oranges. Furthermore, our detective bureau will continuously help us eliminate more oranges. This will help to become aware of and avoid double stocking and reduce inventory.
9. End goal: Components master data
If you want to digitalize your supply chain, you need the component’s master data. The overall ambition for O2O SPARES is to map component master data. This is a very time-consuming task. This information must be pulled up by the roots to digitize supply chains and eliminate manual steps in spare parts management. We would have preferred that this information was given to us directly from the machine supplier, which is a matter of course and a condition in other more mature industries. As this is not the case, we propose that the wind asset owners collaborate to map this data, turbine model by turbine model.
Risk of OEM’s bankruptcy
In case of OEM’s bankruptcy (e.g., Fuhrlander or recently Senvion), the only known source of spares becomes unavailable, which creates an immediate risk for legacy turbine types and jeopardizes the wind farm's commercial value and business plan.
If we would have a common turbine-specific spare parts database in which we managed to map the original manufacturer for a large number of components it would greatly mitigate the effects of such an OEM bankruptcy.