Opinion by Gurpreet Singh Walia, Vice President, Gensol Group
With the applauding that solar power tariff gets for hitting a new low and among the collective joy of our industry beating every other source in terms of cost of electricity generation, there is one team always found shaking their heads in disbelief. Once again, they begin collecting thoughts quickly and framing them lucidly in “English” as expected to be asked from their bosses & business counterparts in the upcoming review. Meet the first responders to these new lows in tariffs, the Engineering Team.
Irrespective of the size & stature of an organization in the Solar Industry, if you’ve worked in an engineering team of one, odds are high of having faced the moral dilemma of complying with well-established global standards vs skimming the specs for bare minimum compliance or worse, an unsafe design. Your Engineering teams may have been or still are, walking the tightrope of Optimization vs Under Design.
The obvious cost of under design – Downtimes & Replacement
Social media is full of videos and images of solar panels succumbing to strong winds and field teams scrambling to put off the electrical fires and so on. Many of these horrifying outcomes find their root cause in the compromised design of these components owing to the relentless pursuit of low costs. Let’s look at three distinct issues here:
- Issues in downstream components such as String Combiner Boxes, String & PV Connectors etc are hard to track due to limited sensor data availability, hence equipment downtimes owing to under design can go undetected for long before getting fixed. Although the energy lost per day of downtime is less, it accumulates to considerable amounts if not fixed in time.
- An upstream component failure like Transformers, HT Switchgear etc. can wreak havoc on project revenues as small downtimes can also take an entire plant or a significant portion offline. Although these components have very strong engineering standards, designers have been lured into twisting the writings of the codes to spec these components to near zero tolerance limits which are appalling.
- Non generation components such as Civil Works & amp; Steel Structures have been the largest casualty of cost cutting exercises. They have witnessed the highest twisting and misinterpretation of engineering standards which are age old and not written for Solar plant use cases specifically. To make matters worse, certain important utilities like drainages & road access are completely discounted by placing reliance on highly skewed third-party reports.
A common theme worth observing here is that the above repercussions of under-design emerge over time and the team that deals with them is Operation & Maintenance which ultimately not only ends up spending recurring costs on fixing these issues but also fails to maintain the expected generation from these power plants due to downtimes.
Thus, It’s not cost saved, It’s cost deferred. It’s the ball just put in someone else’s court.
Think of it as reducing Plant Availability in PVSYST simulations by 0.1% every time a component (of any kind) is designed with tolerances lesser than prescribed standards. I’m sure the reality will hit shortly.
The hidden cost of under design – Asset Valuation
The story takes a big twist when the assets are put on the block. Platforms (backed by funds having billions of assets under management) assisted by technical consultants look at the engineering, performance, and as-built condition of these assets very objectively.
Many assets performing well in line with the energy yield predictions have seen their deals called off due to aftereffects of under design in Civil & Structural works; putting the asset extremely low on the sustainability matrix. For something that was seen to be having the highest scope in cost cutting during the engineering phase.
Deals going through either attract an unexpected haircut on asset valuations (as buyer factors in
replacement cost for components susceptible to failure in near future) or comes with a long list of CPs (condition precedent) with a heavy bias towards rectification or replacement works.
Thus, It’s Cost Saved, but Value Destroyed.
Re-imagine walking this tightrope
There are some steps that asset developers should take to help their Engineering teams walking the tightrope and err on the side of optimization.
- Develop a comprehensive matrix of components and the weighted downtime risk they carry on plant performance.
- Fostering an ecosystem where Engineering, O&M, SCM and Finance can champion their short term & long-term concerns and can take some critical component level risk calls unanimously. This shall eventually lead to a risk matrix that will be unique to each developer.
- Have razor sharp focus on the rapid adoption of technological advancements. Take it a step ahead by facilitating OEMs in research by making field & equipment performance data accessible to them under exclusivity agreements. Help supply the ecosystem to help you.
“Intellectuals solve problems, geniuses prevent them”. Clichéd but true.