Overview

Operation and maintenance (O&M) of renewable energy projects is a critical component of an effective and successful project. Although capital expenditure typically makes up the bulk of the costs, the O&M still contributes significantly to the calculation for the levelised cost of electricity, which is key to the underlying project economics. Having an effective O&M strategy can enhance the competitiveness and make the investment case for renewable energy projects.

The nature of O&M services varies between renewable energy technologies; photovoltaic (PV) solar requires a very different scope of services and risks to consider to offshore wind and has different practical challenges to overcome. The key terms will also vary between jurisdictions, and the depth of the market for the provision of such services. As operational renewable projects increase in scale and number, so the O&M industry increases in scale and sophistication.

This note considers some of the key issues in O&M contracts in renewable energy for both the O&M contractor and the project company