New MWCOST Simulation Tool Used to Study Offshore Wind Financial Risk Propagation
08-Feb-2006
BMT Renewables Ltd has been awarded a contract by the European Space Agency to apply its advanced offshore wind operability simulation tool - MWCOST - to assess how operation and maintenance (O&M) uncertainty propagates through to financial risk and exposure.
The MWCOST software engine is based on offshore wind-specific enhancements to BMT's SLOOP offshore oil & gas field operational simulation model, which has simulated many millions of hours of the operations of a wide range of offshore installations. BMT will use MWCOST in conjunction with a range of data including satellite-based wind and wave information to characterise long-term wind farm asset availability and support logistics requirements.
Also involved in the project is Ergo Finance LLP which manages the acquisition and ongoing operational performance of wind farms. Ergo's experience in managing banking syndicates, investment appraisals and operational risk assessment of offshore wind farms have brought to the fore the key industry requirements to understand the interaction between weather, turbine availability, output and the cost of production. Any operational uncertainty feeds through into financial uncertainty and ultimately to the value of project and the quantum and terms of debt available.
Dr Phil Thompson, Managing Director of BMT Renewables comments: "Currently the offshore wind industry relies on overly simplified models to gain an understanding of through-life availability. Utilising advanced statistical O&M modelling techniques, in conjunction with long-term, high-resolution satellite wind and wave data, should offer improved insights to improve both corrective and preventative maintenance costs. This offers scope to operational costs and/or uncertainty, thereby reducing financial risks and improving access to finance, the cost of debt and favourable loan structuring.
