Spare Parts Management

Spare Parts Management

This chapter focuses on the crucial distinction between consumables and spare parts in maintenance operations. It also highlights the importance of effective spare parts management, covering key aspects such as stocking, storage, replenishment, ownership, and responsibility. Finally, this chapter addresses best practices for maintaining proper stock levels, and ensuring the right storage conditions to support smooth and efficient operations.

It is important to differentiate between Consumables and Spare Parts.

Consumables are items which are intended to be depleted or worn out relatively quickly and then replaced. They are necessary for the regular operation of the solar PV power plant and O&M service providers should always have consumables on stock and maintenance crews should carry consumables with them, together with the relevant tools.

Spare Parts are all the items (materials and equipment such as modules or inverters) listed on the Spare Parts List, not in use or incorporated in the solar PV power plant, intended to replace similar items in the solar PV power plant.

Spare Parts Management is an inherent and substantial part of O&M that should ensure that spare parts are available in a timely manner for Corrective Maintenance to minimise the downtime of (part of) a solar PV power plant. to the following considerations have to be made in Spare Parts Management:

Ownership and responsibility of insurance

Stocking level

Location of storage

Proximity to the plant

Security

Environmental conditions

Although it is best practice for the O&M service provider to be responsible for replenishing the spare parts stock, it is not necessarily responsible for the full cost of doing so. Some Asset Owners require O&M service providers to be fully responsible for the cost of all spare parts within the O&M fee, however, the more cost-effective approach is to agree a set of Included Spare Parts and Excluded Spare Parts. Similarly, a financial limit for Included Spare Parts can be negotiated.

Included Spare Parts are those which the O&M service provider is to be responsible for within the O&M fee. Excluded Spare Parts are those which the Asset Owner is responsible for the cost of replenishing and do not fall within the O&M service provider’s O&M fee. This is a flexible approach allowing the Asset Owner and O&M service provider to agree which spare parts fall into which category. It enables both parties to have a level of cost certainty whilst balancing this with the Asset Owner's appetite for risk. The contract should contain provisions on who is liable in the event that a spare part is unavailable. The various parties are responsible for their replenishment and bear the associated production loss.

Ownership of spares is often with the Asset Owner from delivery to site or placement in the spares stock. In the case of excluded spare parts, ownership transfers to the Asset Owner from the date that the O&M service provider receives payment for the same.

Maintenance, storage, and replenishment are the responsibility of the O&M service provider. Besides ownership matters, it is very important to make sure, upon mutual agreement, that one of the parties undertakes the responsibility of insuring the spares: as a recommendation spare parts stored on-site should be insured by the Asset Owner and spare parts stored off-site should be insured by the O&M service provider.

For a new solar PV power plant, the initial spare parts for two years from COD are procured by the Asset Owner, or the EPC service provider on behalf of the Asset Owner. However, it is best practice for the EPC and O&M service providers to have agreed upon the list. The O&M service provider should, as a best practice, recommend additional spares that they deem them necessary to meet the contractual obligations (e.g. availability guarantees).

Generally, it is not economically feasible to stock spare parts for every possible failure in the plant. Therefore, the O&M service provider together with the Asset Owner should define the stocking level of specific spare parts that make economic sense (Cost-Benefit Analysis). For example, if a specific part in a solar PV power plant has a frequency of failure at least of once every year or more and the loss of revenues due to such failure is greater than the spare part cost, it is important to have such a spare part kept available. This can also apply for parts with a long replenishment period. Similarly, one must consider the management risk that a fault can cause. For example, if a component of a SCADA system stops working, there is no resultant power loss. However, there is a risk of not being able to detect future power loss if this part is not replaced. Some very large O&M service providers now propose using the spare parts in their different warehouses in place of, or in addition to the Asset Owner’s spares stock. Since they operate many sites, they limit the shortage of unusual spare parts by maintaining a small stock.

Regarding the stocking level, due to the very different configurations and sizes of solar solar PV power plants, it is very difficult to define a hard number for stocking specific spare parts, however 0.2% of total module quantity is often found in commercial contracts. Furthermore, the regional portfolio of the O&M service provider might also influence this and, as mentioned above, the determination of spare items and quantity is also driven by the O&M service provider’s contractual commitments and guarantees. To define the stocking levels of Spare Parts and Consumables, the following parameters should be taken into consideration:

Frequency of failure

Impact of failure

Cost of Spare Part

Degradation over time

Possibility of consignment stock with the manufacturer

Equipment reliability

Replenishment time

Management risk

However, for any given utility scale solar solar PV system there are certain spare parts that could be considered as essential to have – no matter the cost.

Table 8 below summarises a minimum list. This list is not exhaustive and system requirements and technology developments can lead to this list being updated following discussion with manufacturers, amongst others.

Regarding the storage and warehousing, this should be done in locations where the spare parts cannot be damaged (e.g., by humidity or high temperature variations) and are easily identifiable as being owned by the Asset Owner. Additionally, the storage sites should have appropriate security measures.

The decision to have either an on-site or an off-site warehouse facility or just an agreement with the suppliers to provide the spare parts, depends on many factors, including the kind of part, the commercial agreement, and the facilitation of the service provision. If the spare parts owned by the Asset Owner are stored off-site, such spares should be stored separately and be clearly identified as the property of the Asset Owner. If the O&M service provider exchanges spare parts, an agreement should be drawn up with the supplier that ensures the warranty is not voided.

While proximity to the plant is a parameter that needs to be evaluated on a case-by-case basis, security and environmental conditions are very important as they could lead to a loss of property either through thefts or damage.