At Kavaken, we are committed to ensuring the success of our customers by leveraging technology as an important enabler. That’s been our unwavering North star until now and will continue to be so in the future. Technology is crucial to ensure success, but there is more…
To formulate how to achieve success, we first need to understand what success means to our customers. As owners of renewable energy assets, our customers are faced with unprecedented challenges in the industry.
Aging assets
Like all things, the assets are aging and as they do they become more prone to breakdowns. According to an IHS Markit study1 the share of unplanned outages increases from 20% at age 3 to a whopping 65% at age 10. The cost of this increase hurts the asset owners in direct and indirect ways, such as the cost of equipment and labor, loss of production, increase in O&M costs, insurance costs.
Climate change
Since climate change is the most compelling reason for the enormous growth of renewable energy, it may seem counterintuitive that it also constitutes a major challenge for the industry. However, the increase in volatility of the weather caused by climate change is making it more difficult for renewable energy asset owners to optimize their production and trading operations. Considering the production can fluctuate up to 20% from one hour to the next in offshore wind farms2, the magnitude of the challenge is evident.
O&M complexities
In the early days of the industry, for an asset owner the O&M business was “easy”. Not necessarily because it was better done in those days, but because there weren’t many options. The asset owner would enter into a long term service agreement with the OEM and wouldn’t have to “worry” about operating and maintaining the assets. With time new options have become available for the asset owners to reduce costs and optimize operations. The range of options includes employing full-service agreements, outsourcing to independent third-party service providers, carving out certain scope items for a hybrid approach, performing the O&M activities fully by themselves and any combination of the above.
Remote assets
With growing portfolios, inevitably the assets are becoming more remote and distributed, making it that much harder to manage in an optimal fashion. The growth of the offshore wind industry, which is expected to triple in size in the next 5 years is one clear example of this.
For asset owners these challenges pose a major threat as they lead to:
- Increased costs
- Production losses
- Risks
- Human capital needs
So, success for asset owners would be to mitigate all these threats in the most cost-effective way.
Technology is a key enabler to help our customers achieve success and the backbone of the technology we employ is A3I. This is a term we coined in reference to the intelligence we deliver to our customers: A3I stands for Artificial, Automated and Augmented Intelligence. Briefly the technology works as follows:
- Artificial intelligence learns the behaviour of each individual asset in a scalable manner
- Automated intelligence runs all the algorithms and checks across the entire portfolio without manual intervention
- Augmented intelligence increases the skills and capabilities of the asset owner’s team with knowledge from across the industry
Learn more about A3I by reading our blog post.
Apart from technology, the second key ingredient in the recipe for success is close interaction with the customers. While the technology allows us to manage our customers in a scalable way, it continuously needs to be fed with customer input to grow. This is achieved via a structured process, underlying tools and a best-in-class Customer Success team.
The Customer Success Team is composed of experts that bring together domain knowledge, data science expertise and user experience fluency. Initial assessment of the plant is completed using historical data and discussions with the customer to understand what each of the assets have “lived” through, their current state and the key business drivers of the asset owner.
This assessment is followed by monthly recurring meetings, where the Customer Success Team ensures the platform is used to the full extent. This is also the venue for ensuring effective know-how exchange is taking place. It is no wonder one of our clients referred to these meetings when he said, “My team learns something new from every session we have with the Customer Success Team”. The interaction is not limited to these meetings. Very often the insights generated by Kavaken open a new area that requires deeper analysis. This is where the Customer Success Team works closely with the customer and undertakes a study that delivers what the client needs. This study is then internalised, automated and embedded into the Kavaken platform, thereby increasing the capabilities of the platform and all of the customers using Kavaken. The cycle goes on and on, creating and delivering value to more users every day.
To summarise;
- Renewable energy asset owners are facing unprecedented challenges which lead to increase in costs, revenue loss, risks and human capital needs
- Technology that is built with the customer in mind can be a key tool in overcoming these challenges and mitigating their impact
- A structured approach to customer success with the right tools and people is the other crucial ingredient for the recipe of success
1) 2018 IHS Markit Wind O&M Benchmarking in North America: Aging Turbines, Rising Costs. https://www.spglobal.com/commodityinsights/en/ci/research-analysis/north-america-wind industry faces rising costs.html
2) https://descartesunderwriting.com/wind/, IEA, 2019
3) https://www.globalxetfs.com/offshore-wind-power-industry-gaining-momentum/
