Asset Management Best Practice Guidelines – Version 2

Rationale, aim, and scope A professional and dedicated Asset Management (AM) service package ensures that photovoltaic (PV) plants, individually and as part of a wider portfolio, achieve their maximum potential from both technical and financial perspectives.While the depth of services rendered to owners and investors varies depending on the risk attitude of the stakeholders, good quality service providers should be able to undertake responsibilities covering the business areas summarised in Figure 2. The scope illustrated in Figure 2 is in line with the structure of this document (and the structure of the O&M Best Practice Guidelines) and reflects the experience of the solar industry specifically.

DISCIPLINES TO BE MASTERED BY ASSET MANAGEMENT SERVICE PROVIDERS

Asset Management key targets AM services should consider each solar power plant or Special Purpose Vehicle (SPV) as a stand-alone business, aimed at improving profitability by
increasing revenues and reducing the levelised cost of solar power plant (LCOE).

STEPS TO AGREE STRATEGIC APPROACH TO INCREASED PROFITABILITY

From an operational perspective, there are four pillars which should guide the work of an AM service provider in order to achieve the ultimate goal of increased profitability. These are presented in Figure 4. They apply to both technical and financial services equally, ensuring
that sites are managed in a fully rounded manner.

DRIVERS OF OPERATIONAL ASSET MANAGEMENT SERVICES

Value-added services An asset manager, being the collector of all relevant technical and financial data and documentation related to solar plants and their SPVs, is uniquely positioned to support asset owners in their aim to maximise returns and mitigate risks in their PV portfolios. As indicated in the following figure, in order to achieve this goal, an asset manager should adopt a holistic approach to performance optimisation. This means
it should be able to conduct an overall assessment of the various aspects that contribute to both generating cash flows and ensuring capital protection.

INTEGRATED APPROACH TO MAXIMISE RISK-ADJUSTED RETURNS

Lifecycle project management Asset Managers can be involved in all phases of the
solar power plant’s lifecycle, from development to decommissioning. Most of the content of the Guidelines focuses on Asset Management during the operational phase – the longest phase of the project lifecycle – but this chapter presents an overview of lifecycle Asset Management with roles and tasks in all project phases.

EXAMPLE OF HANDOVER DOCUMENTATION AND PROCESS AT THE START OF THE CONSTRUCTION PHASE

Transition from construction to operations Crucial is to ensure appropriate documentation is
captured at the commissioning and testing stage. Working closely with the clients and Technical Advisor, the Asset Manager will be ensuring the comprehensive management of documentation relating tocommissioning components and capturing issuesemerging from audit to ensure effective triage and timely resolution.

LESSONS LEARNT AND FEEDBACK LOOP PROCESS

Risk management in the operational phase This chapter focuses on the risks emerging from the commercial operation date (COD). Risks associated with the inception phase are discussed in the current version of SolarPower Europe’s EPC Best Practice Guidelines. In this context, particular attention might therefore be given when it comes to the handover of assets as discussed in Chapter 5. At that point, understanding the risk exposures from an EPC perspective is indispensable.

RISK MANAGEMENT STRATEGY CHART

Handover of solar assets The journey of an AM service provider starts with a handover (or on-boarding) process. Whether an asset has just completed its construction phase, as
described in Chapter 3, or has been operational for some time, the handover process is critical to ensure the ongoing management of the asset. While the key steps and responsibilities of an AM service provider during the handover from construction is described in Chapter 3, this chapter will address the importance of the onboarding process when an operational asset is
transferred from an Asset Manager to another or when an Asset Owner decides to internalise the AM services.

Commercial and financial asset management Commercial and Financial Asset Management
encompasses support activities for the best operation of a business. By definition, the scope of Commercial and Financial Asset Management goes from the contact with external entities on behalf of the Asset Owner until the conversion of operational data into useful and understandable financial information. It comprises the activities presented in this chapter.

NEW REQUIREMENTS DRIVEN BY NEW RISK ALLOCATION AND CRITICAL IMPORTANCE
OF DATA MANAGEMENT

Procurement The role of the Asset Manager in the solar sector is crucial in order to identify, select and properly manage the key suppliers involved in the operation of the SPVs and the
plants.

KRALJIC MATRIX OF MAIN SUPPLIERS INVOLVED IN SOLAR POWER PLANT OPERATION

Data management and high-level monitoring Asset Managers have the responsibility of monitoring and overseeing the activities performed by the O&M service providers as well as managing the ongoing obligations of the plant to ensure its longevity and profitability, as detailed .

TRADITIONAL LINEAR ASSET MANAGEMENT APPROACH AND ASSET-CENTRIC INFORMATION-BASED
APPROACH WITH THREE KEY STAKEHOLDERS OF ASSET MANAGEMENT

Contractual framework This section contains a set of considerations for the contractual framework of AM services to be executed with respect to commercial, industrial and utilityscale systems. As a complement to the technical specifications detailed in the previous chapters, the
contractual framework described in this chapter is considered as a best practice.

SCOPE OF THE ASSET MANAGEMENT CONTRACT

The Asset Manager shall perform the services in compliance with the annual business plan provided by the client. In addition to the above, the parties may agree that the Asset Manager will not be entitled to enter into any contract having a value higher than the maximum amount identified in the AM agreement.

Source: SOLAR POWER EUROPE

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