Originally appeared on Solar Power World Magazine.
Asset management is a buzzword in today’s solar industry. But what does it really mean and how does it relate to overall operations and maintenance? We spoke with Ken Kostok of O&M provider Alectris to find out. He shares his lessons learned from over 150 MW of solar installations. He also tells us about the SunSpec Alliance’s PV Finance Conference and Solar Asset Symposium at Intersolar NA 2015, where you can learn more.
Kathie Zipp (KZ): I’m Kathie Zipp, managing editor of Solar Power World magazine. Welcome to another edition of Solar Speaks, Solar Power World’s podcast series that gives you the opportunity to hear from the industry’s biggest news makers in their own words.
Solar operations and maintenance is becoming an important topic to discuss more than ever. So we’re here with Ken Kostok of O&M service provider, Alectris, to tell us more about what contractors should understand about O&M, how asset management ties in, and a special symposium taking place during Intersolar where you can learn more. So Ken thank you so much for being here with us.
Ken Kostok (KK): Kathie, it’s a pleasure to be here and talk with you today about life after construction and commissioning of a solar plant, or what we do, with asset management and operations and maintenance.
KZ: And let’s get started right into the topic. Ken can you begin by telling us how you got into the solar industry I think that’s interesting and briefly about what you do at Alectris?
KK: Certainly. I come from a utility background, electric utilities, working inside the utilities and outside both as an engineer, an operator and constructor: designing, building, and operating all kinds of electrical facilities. That led me into the wind industry where I designed and constructed a two hundred megawatt wind farm up in Canada. So it was a natural progression to go into solar power as solar became a leading power generation technology here in the U.S.
At Alectris, we leverage those skills, my skills and our company’s background to provide services to owners and stakeholders of PV solar power plants. Most of it is in asset management which includes the operations and maintenance. I lead the U.S. and Latin American business unit, helping owners to get plants designed, built and up and running and to stay running over their twenty year life cycle.
KZ: Excellent. So financing, O&M and asset management those are prominent buzzwords in the industry. Can you explain how they are all related?
KK: Good question, Kathie! O&M is operations and maintenance. It is really a subset of asset management. So someone’s got to take care of the asset that’s out there and a lot of cases in the industry now there are owners that are financial owners or yieldco owners on these projects so it’s not done internally.
Asset management includes a larger subset of other activities including risk management, billing, collections, and contract management. There’s SREC’s in the United States and feed in tariffs in other countries that need to be managed. Insurances both for the plant itself and subcontractors on it performing warranty work, making others uphold their end of their contracts and other management functions like reporting to fund holders, reporting to banks and your interconnection and other contract holders so the asset management really involved taking on the whole role of managing and running a power plant, in this case solar, over the life of the project.
On the financing side usually there’s someone that is funding or leveraging capital to own or purchase a plant and that’s where the financing comes in. Lenders want to make sure the asset is taken care of over the life because they’re relying on revenues coming in from selling power to pay the loan off or to pay for this activity to keep the plant up and running. So the lenders have their own guidelines for what has to be done on asset management and operations and maintenance just to make sure it’s properly maintained more or less like a guideline for maintaining your vehicle. How often do you change your oil? Solar has its own activities that need to go on year after year.
KZ: Perfect. Thank you very much for clearing all that up, Ken. As I understand you have a lot of experience behind you. You’ve been involved with more than one hundred fifty megawatts of solar. So I’m sure you have a great insight for our audience. What are your biggest lessons learned that you can share with contractors?
KK: Sure. I think the biggest lessons learned especially for the EPC’s and the contractors and how to really bring your value to your project and products here is that the biggest impact you can get on O&M is done in the design phase so that sometimes sounds a counter intuitive.
But if you don’t design the plant with a life cycle and what you need to do year after year to maintain this plant in mind, you can stick the following owners with issues that come up time and time again and cost them money. So paying attention to the design and constructing with the life cycle in mind: How do you maintain that plant? What people need to do on a monthly or quarterly basis and engaging all the stakeholders is a good way that I think anyone in the EPC world or the contracting world can bring more value to the owners as a design and build and sell their power plants. Doesn’t cost any more it just takes a little bit more thought up front.
KZ: Definitely a good point. We understand that Alectris is helping to develop solar PV O&M standards with EPIA in Europe and here in the U.S. the Sandia National Labs. You’ve also just joined the SunSpec Alliance, who is working on standards as well and you personally serve on a solar committee for Sandia National Labs involved in developing standards related to O&M. So with all that work can you tell us about standards and the things that you’re involved with on that end?
KK: Certainly. Design, construction and getting the plant on line, or what we call commissioning ,all have standards in place and they’ve been in place for a number of years. The IEC in Europe and the IEEE here in the United States all have worked to make sure these kind of projects have a proper design and constructed in a proper way. The tail end of that, is once they are built and running, there haven’t been standards developed.
Solar is a relatively new technology and utility scale solar especially the large scale solar plants in the U.S. have been around only the last four or five years. So compared to traditional generation that’s been around for well over a hundred years, solar’s on a catch up mode because to maintain the traditional power plant versus a solar power plant they’re just a different technology so different things need to be done.
So as you mentioned the European photovoltaic industry or EPIA* and the SunSpec Alliance are working on two sides of the shores independently to develop sets of standards. We’re working with industry experts that you’ve mentioned from Sandia, from NREL, from SunSpec Alliance, and other manufacturers that make the equipment and operators similar to Alectris that touch this equipment on a day in and day out basis and work with many owners and see different things to develop standards that can help the industry set a baseline. What type of baseline do we need to maintain these units, what’s optional and what’s required?
We want to make sure these plants operate well for the next twenty to thirty years. Having standards will do it and then the standards also give owners a baseline and documentation with standard definitions where right now it’s kind of wide open and there’s almost as many different definitions of O&M and asset management as there are owners of power plants.
KZ: Very interesting work that you’re doing with all those groups. Going back to the SunSpec Alliance, I hear that Alectris is participating with SunSpec to host a symposium on these subjects at Intersolar. Can you tell us more about that?
KK: Yes. Once a year industry experts gather in San Francisco in July. This year July 14th is the SunSpec Alliance day for the solar asset symposium that’s held in conjunction with Intersolar at the Moscone Center.
A full program is being offered that really dives into all the areas to develop world class PV system operations and maintenance. It’s in its fifth year now so experts are coming from around the world. The topics that we’re going to be talking about are O&M cost models, proper commissioning techniques, and key performance indicators; how do you measure your plants and then developing effective contracts so you can hold your service providers accountable for the work they need to do and then compare one service provider to another.
So if any of the listeners have not yet registered coming up soon in about a month and discount code is available if you haven’t registered it’s on the Alectris website to be able to get in a little bit cheaper.
KZ: We definitely like a good discount. All right well thanks again. We have been speaking with Ken Kostok of Alectris. You can find out more about the SunSpec Alliance Symposium and register at SunSpec.org or on the Intersolar North America website under conferences.
So thanks for all that great insight, Ken. It’s been good talking to with you.
KK: It’s been nice talking with you, Kathie. Thank you for the opportunity. I look forward to meeting many of you at the symposium next month in San Francisco.
KZ: it will be a good one. This has been another edition of Solar Speaks. I’m Kathie Zipp, managing editor of Solar Power World Magazine. Thanks for listening and please tune in next time.
*EPIA has recently changed its name to SolarPower Europe.