PHM Based Predictive Maintenance Option Model for Offshore Wind Farm O&M Optimization

Xin Lei, Peter A. Sandborn, Navid Goudarzi, and Maira A. Bruck
Submission Type: 
Full Paper
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phmc_15_034.pdf648.68 KBAugust 5, 2015 - 7:19pm

A simulation-based real options analysis (ROA) approach is used to determine the optimum predictive maintenance opportunity for multiple wind turbines with remaining useful life (RUL) predictions in offshore wind farms managed under outcome-based contracts, i.e., power purchase agreements (PPAs). When an RUL is predicted for a subsystem in a single turbine using PHM, a predictive maintenance option is triggered that the decision-maker has the flexibility to decide if and when to exercise before the subsystem or turbine fails. The predictive maintenance value paths are simulated by considering the uncertainties in the RUL predictions and wind speeds (that govern the turbine’s revenue earning potential). Each possible predictive maintenance opportunity creates a European style predictive maintenance real option. By valuating a series of European options expiring on all possible predictive maintenance opportunities, a series of option values can be obtained, and the optimum predictive maintenance opportunity can be selected. The ROA approach assumes that the predictive maintenance will only be implemented if the predictive maintenance value is higher than the predictive maintenance cost. The optimum predictive maintenance opportunity can also be determined using a stochastic discounted cash flow (DCF) approach that assumes the predictive maintenance will always be implemented on the selected opportunity. Generally these two approaches will suggest different optima, however when the predictive maintenance value is high enough, they lead to the same result.
For a wind farm managed via a PPA with multiple turbines indicating RULs concurrently, the predictive maintenance value for each turbine depends on the operational state of the other turbines, the amount of energy delivered and to be delivered by the whole wind farm. A case study is presented in which the stochastic DCF and European ROA approaches are applied to a single turbine and to a wind farm managed via a PPA. The optimum predictive maintenance opportunities obtained from two approaches are compared and it is demonstrated that the European ROA approach will suggest a more conservative opportunity for predictive maintenance with the expected option value higher than the expected net present value (NPV) from the stochastic DCF approach.

Publication Year: 
2015
Publication Volume: 
6
Publication Control Number: 
034
Page Count: 
10
Submission Keywords: 
prognostics and health management
offshore wind farms
real options analysis
power purchase agreement
predictive maintenance
maintenance optimization
Submission Topic Areas: 
Economics and cost-benefit analysis
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