With flexibility, rather than efficiency, determining profitability, operation and maintenance (O&M) agreements have a new focus. At the same time, there is more attention being paid to risk, as margins come under pressure from price and volume uncertainty. This has changed the way turbine manufacturers and others approach maintenance. They're moving away from just maintaining efficiency and the plant, and toward reducing risk and improving flexibility in an attempt to increase the future value of generated power from the plant.
By responding to the latest market developments, O&M providers are supplying a valuable service to the operator, and most turbine manufacturers are focused on expanding maintenance coverage. By mitigating risk to operators, which is rising as markets becoming less certain, O&M agreements are no longer just deals to make sure equipment keeps running. They are also about allowing the assets to respond more profitably to market conditions in order to maintain or increase the value power generation assets generate over time.
However, even these changes can prove insufficient, and, in some cases, gas plant operators are giving up on combined cycle altogether. In the UK, Centrica, the country's biggest generator, sees a trend of less value in large, centralized CCGTs, so it is converting some of its fleet to more flexible open-cycle units. It is also building another 100 MW of decentralized, smart flexible capacity. This reduces overall capacity and the overall efficiency of the fleet, but it can accommodate more renewables.
The United States has a long way to go before it reaches UK wind levels of up to 20% of the total generation on some days (and more expected over the next few years). However, US monthly electricity generation from wind and solar did reach 10% of the total electricity generation this March, according to the IEA—up sharply from an average of 7% per month in 2016. Further growth will drive the demands placed on CCGTs, pushing manufacturers to find solutions that meet the needs of the market.