A Real Options Optimization Model to Meet Availability Requirements for Offshore Wind Turbines

This paper provides an optimization model based on Real Options (RO) and stochastic dynamic programming for the availability maximization of an offshore wind farm with prognostic capabilities. Alternative energy sources such as offshore wind turbines are promising technologies, but they are capital intensive projects, and the economics of the project depend heavily on the wind resources, and the availability of the turbines. Prognostics and health management (PHM) is an enabling technology that potentially allows for reduced life cycle cost through a transition from cycle or time based to demand-based maintenance, performance based logistics, and condition-based maintenance. This is especially important for offshore wind farms that require nontraditional resources for maintenance, and are often located in sites that are not always accessible. The proposed model uses information from the PHM system in order to allocate appropriate investments in maintenance while maintaining a specified availability requirement. The RO theory provides promising means to address the economic aspects of PHM after prognostic indication, and assessing the cost required for meeting availability requirements.