Offshore wind turbines intertwined with financial and partnership symbols.

Offshore Wind Power: Balancing Profits and Partnerships for a Sustainable Future

Theo Raines in Climate & Environment December 2025 • 4 min read.

"Navigating conflicts of interest between wind farm owners and maintenance suppliers for a greener tomorrow."

Wind energy is booming as a crucial source of renewable power. Offshore wind farms, in particular, are gaining traction due to their efficiency and capacity. However, these massive projects come with significant maintenance costs, often outsourced to specialized suppliers. This arrangement can lead to conflicts of interest, where the owner's desire for uptime clashes with the supplier's profit margins.

Imagine a scenario: A wind farm owner wants turbines running at peak performance to maximize energy generation and revenue. On the other hand, the maintenance supplier might benefit more from frequent repairs and part replacements, creating a financial incentive for more downtime. How can these competing interests be balanced to ensure both profitability and sustainability?

This article dives into a groundbreaking techno-economic model designed to navigate these murky waters. We'll explore how aligning incentives, setting clear performance standards, and fostering collaboration can unlock the full potential of offshore wind energy, making it a win-win for owners, suppliers, and the planet.

The Conflict: When Uptime Meets the Bottom Line

Offshore wind turbines intertwined with financial and partnership symbols.

The heart of the issue lies in performance-based contracts (PBCs). PBCs are designed to incentivize maintenance suppliers to keep wind farms running smoothly. Instead of paying for each repair, owners pay based on the overall availability of the turbines. Sounds good in theory, but as research from “Renewable and Sustainable Energy Reviews” shows, manufacturers don't always have incentive to increase the availability of the WTs.

The initial material-based contracts encouraged the exact scenario that was to be avoided. This lead to a conflict of interest because maintenance, repair, and overhaul activities generated significant revenue for the manufacturer and suppliers. To solve this a performance-based contract was the goal.

Availability Guarantees: Contracts must clearly define availability thresholds. If the wind farm isn't performing up to par, the supplier faces penalties.
Incentive Structures: Conversely, exceeding availability targets should trigger rewards, motivating suppliers to go the extra mile.
Resource Allocation: The number of technicians, spare parts inventory, and access to specialized equipment all play a role in maintaining uptime. Contracts should address these resources.

The study showed that Reliability is improved by 25% to 40% under PBC compared with material-based contracting. That being said, the cost of maintenance has to be analyzed and set in place.

Sealing the Deal: Contracts That Work for Everyone

The transition to renewable energy requires more than just technological advancements; it demands innovative business models that align the interests of all stakeholders. By embracing techno-economic models and prioritizing collaboration, the offshore wind industry can unlock its full potential, delivering clean energy and economic prosperity for generations to come.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.1016/j.rser.2022.112753,

Title: A Techno-Economic Model For Avoiding Conflicts Of Interest Between Owners Of Offshore Wind Farms And Maintenance Suppliers

Subject: cs.gt cs.sy econ.gn eess.sy q-fin.ec

Authors: Alberto Pliego Marugán, Fausto Pedro García Márquez, Jesús María Pinar Pérez

Published: 16-01-2024

Everything You Need To Know

What is the primary conflict of interest that arises in offshore wind farm maintenance contracts?

The primary conflict arises between the wind farm owner's interest in maximizing turbine uptime for energy generation and revenue, and the maintenance supplier's potential to profit from frequent repairs and part replacements, creating a financial incentive for increased downtime. This is primarily addressed through performance-based contracts. This contrasts with initial material-based contracts that unfortunately encouraged increased maintenance, repair, and overhaul activities as they generated more revenue for manufacturers and suppliers, counteracting the goal of maximizing uptime.

How do performance-based contracts (PBCs) attempt to resolve conflicts of interest between wind farm owners and maintenance suppliers?

Performance-based contracts (PBCs) aim to align the interests of wind farm owners and maintenance suppliers by shifting the payment structure from a per-repair basis to one based on the overall availability and performance of the turbines. Instead of paying for each individual repair, the owner pays based on the turbines' uptime. Penalties are incurred if availability thresholds aren't met, and rewards are given for exceeding targets, which creates an incentive for suppliers to maximize uptime. This contrasts with material-based contracts.

Besides availability guarantees and incentive structures, what other contractual elements are crucial for successful offshore wind farm maintenance?

Beyond availability guarantees and incentive structures, resource allocation is critical. Contracts should explicitly address the number of technicians available, the inventory of spare parts, and access to specialized equipment. Having these resources readily available is important for maintaining uptime and ensuring the wind farm performs optimally. Without these resources uptime will be negatively affected.

What are the potential benefits of implementing techno-economic models and collaborative business practices in the offshore wind industry?

By embracing techno-economic models and prioritizing collaboration, the offshore wind industry can unlock its full potential, delivering clean energy and economic prosperity. These models align the interests of all stakeholders, ensuring that both profitability and sustainability are achieved. The increase of reliability of 25% to 40% can be achieved under performance-based contracts compared to material-based ones. This also requires innovative business models that align the interests of all stakeholders.

Why were material-based contracts initially problematic for offshore wind farm maintenance, and what was the intended solution?

Material-based contracts inadvertently incentivized maintenance suppliers to perform more repairs and replacements, as their revenue was directly tied to these activities. This conflicted with the wind farm owners' goal of maximizing turbine uptime and energy generation. To address this conflict, the industry aimed to transition to performance-based contracts (PBCs), where payments are tied to turbine availability and performance rather than the volume of repairs. However, the cost of maintenance must be carefully analyzed and set in place for PBCs to be effective.