OPEX Financial Modelling and Through-Life Risk Assessment for a US Utility

2022-2023

We supported the client through a comprehensive OPEX financial modelling and risk management exercise across its wind portfolio, aimed at improving long-term cost visibility and supporting strategic decision-making.

Our work included a detailed risk assessment of the operating portfolio, combined with a review of how operational and maintenance costs were being managed, capitalized and depreciated. We developed a dedicated OPEX financial model extending the business case to 30, 35 and 40 years, allowing for a more realistic representation of long-term operational costs beyond standard accounting horizons.

The analysis incorporated failure risk assessments for both existing and planned wind farms, together with a review of cost structures, asset lifetime assumptions and long-term maintenance strategies. Particular attention was paid to the treatment of non-tangible operational expenditures, capitalization practices and their impact on financial projections.

We also assessed alternative O&M strategies and demonstrated that in-house maintenance could reduce maintenance costs by approximately 30-40% compared to outsourced models, under defined operational conditions.

Following the study, several workshops were held with the client and key stakeholders to discuss findings and strategic options. While the client ultimately decided to divest part of its assets, the project provided a robust, risk-informed financial framework to support that decision process.