Solar O&M in Spain

May 13, 2016

Solar Operations and Maintenance in Spain
The Spanish solar PV market has faced significant changes in the last few years. In 2014, new legislation was passed that affected the structure of PV plant ownership as well as the tariff rate and the life expectancy of the plants. This created upheaval in the PV community, and brought the market to a standstill.

Now that the dust has settled the market is coming back. This brings new challenges and opportunities for solar operations, maintenance (O&M) and asset management.

Implications for O&M in Spain’s Changing Solar PV Plant Ownership Structures
This is perhaps the biggest asset management challenge. Previously, one PV plant could have as many as 30 owners. Under the new structure there is no longer a financial incentive for such diffuse ownerships. In many cases, PV plant ownership is now transitioning from multiple owners for each plant to one.

Often a PV plant consists of a consortium of smaller plants that work together. For instance, a three megawatt PV plant could be made up of thirty 100 kilowatt plants. Each of these plants could have a different owner, one owner could manage several smaller plants, or an individual plant could even have several owners.

Merging to single owner provides an opportunity to significantly reduce administrative costs. However, it is a complicated process requiring a significant restructuring of the organization.

In order for O&M to untangle these details, a strong asset management program such as the Alectris ACTIS platform is required. The operations, maintenance and asset management functionality of the software platform must be able to track on a plant level basis and then compile the individual results into a portfolio wide report.

Change in Solar Tariff Structure
Another component of the new regulations was a restructuring of the solar tariff. In most markets, the tariff is completely related to production. The Spanish market used to work the same way. Now production represents only 20 percent of the tariff.

Furthermore, the amount of the tariff was reduced. For most plants this represents a decrease of 12 to 35 percent.
One impact of this change is that small increases in output are no longer worth the operational investment. It requires a strong cost benefit analysis to determine the optimal rate of increase.

If increasing the production by five percent results in only a one percent benefit to the owner there is no financial incentive to increase production. O&M must identify the tipping point where the increase provides enough of a benefit to make the investment worthwhile.

Solar PV Plant Life Expectancy
The third component of the new regulations changes the life expectancy of the PV plants. They are now expected to perform for 30 years rather than the standard 25.

This changes the focus of operations and management from increasing production to increasing longevity, which has created a shift in the approach most companies are taking towards maintenance. Extending the lifetime of components is now the primary objective. The owners do not want to invest in repair unless it is absolutely necessary.

This requires a new approach towards O&M. It is more important to stop the problems before they start. When issues do arise, owners are now more interested in completing an in-depth analysis to determine exactly what happened than rushing in to provide an immediate repair. It is more important to learn how to avoid a recurrence of the same issue or allowing it to grow larger and more expensive to fix.

It is a delicate balancing act requiring companies to identify the intersection of performance and maintenance that creates the optimal tariff level. As Salvador Andreu, Managing Partner of Optimal Sun says, “We need to find the best balance between productivity and durability.”

Impact on the Secondary Solar Market
The combination of the changes in ownership and tariff structure have had an impact on the secondary market as well. Many smaller owners of PV plants are divesting their solar assets.

This impacts O&M on both sides of the transaction. The seller needs to prepare the plant to be sold, updating what they can and providing the documentation of plant management costs and benefits.

On the part of the buyer, O&M identifies the strengths of the plant, and also the costs that will be needed to reach the optimum tariff point. This helps the potential owner decide if it is worth their investment.

Managing Island Based Solar Plants Remotely
solar farmSpain also has several PV plants on the islands. Monitoring these plants requires a completely different approach.

Optimal Sun is now managing an island based PV plant in Mallorca (pictured here) using the Alectris ACTIS platform. The plant has 3.1 megawatts and is a fixed-installation. Working in the islands is different than working in other places.

Planning and logistics are the keys to smooth operations in these areas. There are fewer people on the ground who can address problems as they arise than there are on the mainland, and it is costly to send specialists out for repairs.

Scheduled maintenance is the best way to minimize unexpected problems. The O&M team must have a good monitoring and management system in place to determine the most effective maintenance schedule and to ensure that all the necessary components are stocked at the plant.