Lost production compensation and the importance of transparency

“…and to finish with some very happy news, we were able to settle a claim on lost production compensation thanks to your professional analysis and precise calculation ….”

This is the kind of feedback we really appreciate, given by our customer EnergieKontor at the end of one of our recent monthly review meetings.

Downtime at a wind farm can be caused by a variety of issues, environmental, technical and balance-of-plant related. In some cases, the owner of the wind turbine may be able to claim compensation for the resulting lost production. In practice, agreeing liability for incurred losses and the calculation of the level of compensation is often complex, and for relatively small claims the effort can exceed the value of the claim itself. So as for many of the cases that we see in wind turbine operations, it is important to be efficient and pragmatic, if we are to create value.

In this specific case, a substation power cable was accidentally damaged during road works, completely cutting off the power supply to the whole wind farm. Not only could the turbines no longer produce power, but all communications were also lost, meaning no SCADA data was available for the period of downtime. A claim was submitted to the insurer for compensation, but the lack of data led to problems in agreeing the amount of lost production.

i4SEE has developed a methodology for the calculation of lost production, based on the IEC61400-26 standard but with some modifications to deal with the complexities of cases where data is lost for the turbines in question. The method is relatively simple and pragmatic, fully transparent and delivers results with good accuracy and a quantified level of uncertainty.

This method was applied to calculate lost production for the case described above, and all parties were able to quickly agree on a fair level of compensation, leading to a successful and well-executed insurance claim.

“i4SEE provided us with a professional lost production calculation which all parties found trustworthy, and the insurer agreed to compensate us for the lost revenue. This is a good example of where our cooperation with i4SEE has resulted in clear added value for our operations,”

Juliane Selle, Team Leader OCC, EnergieKontor AG.