Imagine a world where our energy needs are met with the clean, infinite power of the sun. This isn’t a distant future scenario; it’s progressing now, thanks to the rapid growth of solar energy. But how do we ensure these solar plants are operating at their peak? The answer lies in a critical industry benchmark known as Solar Plant Availability (AV). This key performance indicator (KPI) not only reflects the health of a solar plant but also drives the efficiency and profitability of the renewable energy sector. In this post, we delve into the nuances of AV, exploring its importance, calculation methods, and its pivotal role in Operations and Maintenance (O&M) contracts. Prepare to unlock the secrets of maximising solar energy efficiency and why every percentage point in AV matters in the grand scheme of renewable energy.
Solar Plant AV as an Industry Benchmark KPI
Solar Plant Availability (AV) stands as a testament to a plant’s operational excellence. It represents the percentage of time a solar plant is operational and capable of producing electricity, compared to its potential output under ideal conditions. This KPI is crucial for several reasons. First, it sets industry standards, providing a clear benchmark for comparing the performance of different solar plants. Higher AV indicates better operational efficiency and lower downtime. Furthermore, AV thresholds are often established to gauge the health and performance of a solar plant, helping stakeholders identify areas for improvement.
Generally, the standard AV Guarantee in Solar Farm O&M contracts is set at 99%. However, this is only the guarantee from the O&M provider to the owner with excludable events considered. Such events can’t can’t count against the AV. This includes reaction, response or repair times. O&M contracts usually include periods for the O&M to recognise failures and dispatch their engineers to investigate further on site. Such periods can’t be counted against the overall AV since O&M providers haven’t mastered the superpower of teleporting yet!
Other excludable incidents usually represent a list of unforeseen events outside the control of the service provider. Such incidents could be:
- Force Majeure
- Relief Events
- Incidents attributable to the Owner
- Incidents attributable to the Distribution Network Operator (DNO)
- Planned Preventative Maintenance
At the end of the year we can then calculate a Contractual AV or gross AV and a Actual AV or net AV. For the purpose of the service provision only the gross AV is considered. For other purposes, however, the net AV is crucial.
Main Guarantee under post FAC O&M Contracts
In the realm of Operations and Maintenance (O&M) contracts, AV takes center stage as a primary guarantee. It’s a reflection of the quality of work provided by the O&M service provider. High AV percentages are indicative of effective maintenance practices, quick response to issues, and proactive management. This KPI is often tied to performance incentives, encouraging O&M providers to maintain or exceed specific AV targets. Thus, it serves as a tangible measure of an O&M provider’s competence and commitment to ensuring optimal plant performance.
While we have looked into the importance of Performance Ratio (PR) as guarantees for EPC contracts, Availability becomes the primary KPI after the DLP phase. Once a solar farm has achieved FAC, not much can be done about performance optimisation when the plant is generating according to the design. However, AV provides constant feedback on the quality of the service provider. Frankly, the faster failures are detected and resolved the higher will be the profitability of the solar asset. Therefore, IPPs are in favour of Availability Guarantees for the lifetime of the asset.
Liquidated Damages and Bonus Agreements (LDs)
AV’s importance extends to its connection with Liquidated Damages (LDs). LDs are compensation for the plant owner for lost revenues due to lower than agreed AV levels. This aspect underscores the financial implications of AV. When a solar plant’s AV drops below the agreed threshold, it not only impacts energy output but also hits revenue. LDs are a way to balance this financial loss, making AV a financially quantifiable metric in the solar industry. On the other hand, some IPPs offer bonus agreements if higher than agreed Availability is achieved. Such regulations is seen as an incentive to prioritise downtimes and aim for swift repairs.
Calculating AV is a nuanced process that could involve various levels – string, inverter, and plant. This calculation takes into account the actual energy output, potential output under ideal conditions, and downtime due to maintenance or faults. The inclusion of sun hours, or the amount of effective sunlight available, is critical in this calculation, as it provides a realistic benchmark for potential energy production. This detailed approach ensures a comprehensive understanding of a plant’s operational efficiency.
The admittedly complex looking formula below might be intimidating at first glance. However, it only calculates the amount of time each inverter was exporting against when it should have been exporting. Thereby each inverters total capacity is considered as there could be differences depending on how many strings are connected. To determine how many hours a month the power station should be available to export, the total sun hours in the month have to be considered. Very often O&M contracts regulate the minimum amount of irradiation received (30 – 50 W/sqm) to qualify for the sun hour budget. The irradiation hereby will be collected by the pyranometers and irradiation cells.
Solar Plant Availability (AV) as a forecasting tool
AV isn’t just a measure of operational performance; it’s a cornerstone for revenue forecasting in the solar industry. Higher AV directly correlates to higher energy production and, consequently, increased revenue. By accurately predicting AV, stakeholders can make more informed financial projections and investment decisions. This KPI is essential for budgeting, forecasting, and assessing the financial health of solar investments.
At the end of each year, accountants will look into their crystal balls and try to predict the future. AV comes in very handy for this task. All that needs to be done to create a bankable budget is to compare the total capacity of the solar farm reduced to the expected AV and multiplied by the expected insolation over the year. With the resulting export in kWh or MWh the last step is to multiply this with your PPA/FiT/CfD rates. Such budgets usually are broken down into months to account for seasonability and to put against the OPEX. With realistic and conservative budgeting a smooth cashflow can be ensured and all bills paid on time.
Solar Plant Availability is more than a technical metric; it’s a reflection of a plant’s operational health, financial viability, and the overall success of the renewable energy industry. By understanding and optimizing AV, we can ensure that our transition to a cleaner, solar-powered future is not just a vision, but a reality marked by efficiency, reliability, and profitability. Let’s embrace this KPI as a beacon guiding us towards a brighter, sustainable future.