1. Industrial Internet: Cutting Costs for Energy
Producers by 1 Cent per Kilowatt Hour
October 31, 2014

2. What are the ROI Business Challenges?
1. What are the fleet-wide gearbox failure assessments(“As-Is”)?
• Gearbox replacement planning, fleet/site valuations
• Top worst performers (We see what you can not see)
2. What are the individual gearbox failure risk profile and remaining
useful life (RUL)?
• Component and systems failure profile per asset
3. How to make decisions based on ROI using individual asset life
extension planning and trade-off studies
• Financial impact tradeoffs
• OEM tradeoffs
• Remanufacturing options
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014

3. Business Problem
Financial Data
(Asset Management)
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
ROI
?
Lifing Data
(Engineering)
Service and
Maintenance
Data
(Operations)

4. Business Problem
How do you bring these views together so that the ROI is credible?
Financial Data
Service and
Maintenance
Data
Lifing Data
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
ROI

5. Objective of an Integrated ROI Model
• Scenario planning based on financial data,
operational costs and lifing impact data
• Single and combination service options
• Derate, oil, controls, component replacement, OEM options
• Proactive vs. Reactive
• Plan high cost gearbox change-outs efficiently
• Financial credibility
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014

6. Assumptions
• Financial model is scalable for different asset
types and operational use cases
– Capable of adding new maintenance options and
sites/assets
• Integrated with gearbox performance and
lifing data
– Changes in RUL cause changes in ROI
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014

7. Life Extension Options Affecting ROI
De-rating Options Lubrication Options
Component
Replacement
Uptower
Control Upgrades
PPM Servicing
Schedule
Optimization
Enhanced
CBM/PHM
Capabilities
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Options Capable Through Prognostics

8. Asset-Level ROI Model
Input Variables Calculate ROI ROI Trade-Offs
1) Cost of refurbished gearbox
2) Cost of new gearbox
3) Gearbox change out grouping
4) Investment hurdle rate
5) Revenue per MWh by site
(with tax credits)
6) Contribution margin
7) Cost of oil change alternatives
8) Actual output from wind tables
by turbine (no derate)
9) Derate tables by turbine
10) Costs of other actions
11) Month that action is taken
12) RUL extension by turbine from
Digital Clone Live
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
• Select different life-extension
actions
• Run predictive models
• To generate RUL
extension
What action(s) are
best?

9. Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Sentient Science Assumptions for Single Turbine RUL Extension Decisions
Items in yellow are user inputs
Capital Metrics
Cost of refurbished gearbox replacement $440,000
Investor hurdle rate or firm cost of capital 15%
Monthly hurdle rate or cost of capital 1.250000%
Gearbox Change Out Grouping Costs
Cost of changing out a single gearbox $727,800
Number of gearboxes to be grouped for change out 5
Total gearbox and change out cost per turbine $668,600
Cost of RUL Extension Alternatives
Oil Change Alternatives
1 Clean existing oil $5,000
2 Flush existing oil $7,500
3 Change oil supplier $10,000
Derate Alternatives (Goal Setting)
4 Maximum financial benefit derate See Derate
5 Service target date derate* Tables
Wind Turbine MWh Price and Contribution Margin Assumptions
Net revenue per MWh (specific rate for a site) $76.92
Contribution margin percentage 55%

10. ROI Model  Single Turbine Asset
Sentient Science RUL Extension Alternatives for Wind Turbine #7 as of: 1/26/2014
Cells in green are inputs from Sentient Science Digital Clone Live.
Two interactive user assumptions are required and are shown in yellow.
All other user assumptions are taken from the spreadsheet in the Assumptions tab.
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
RUL Extension
As Is Turbine Change Start Amount (in months) from Incremental
RUL Action Gearbox Month Month of Derate Sentient Science RUL Extension
RUL Extension Alternative** (in months) Required Now? of Action Number (in MW) Digital Clone Live (in months)
Wind Turbine #7 12.00 Yes No
Goal Setting
Maximum financial benefit derate May 5 2,000 24.00 12.00
Service target date derate* Jan 1 2,000 16.00 4.00
Oil Change Alternatives
Clean existing oil March 3 N/A 14.00 2.00
Flush existing oil March 3 N/A 18.00 6.00
Change oil supplier March 3 N/A 24.00 12.00

11. ROI Model  Single Turbine Asset
Sentient Science RUL Extension Alternatives for Wind Turbine #7 as of: 1/26/2014
Cells in green are inputs from Sentient Science Digital Clone Live.
Two interactive user assumptions are required and are shown in yellow.
All other user assumptions are taken from the spreadsheet in the Assumptions tab.
Incremental Cost of Action
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Use this ROI
Incremental Postponed Net FV Benefit ROI Action
MW Hours Cost of Gearbox NPV of Net Cost from (Net Financial Selected
RUL Extension Alternative** Gained Replacement Oil Actions Lost Margin Postponed RUL Extension Gain) by User
Wind Turbine #7
Goal Setting
Maximum financial benefit derate 5,392 $668,600 N/A $15,398 $653,202 $758,207 $105,005
Service target date derate* 1,973 $668,600 N/A $7,588 $661,012 $694,687 $33,675
Oil Change Alternatives
Clean existing oil 1,074 $668,600 $5,000 N/A $663,600 $680,294 $16,694
Flush existing oil 2,965 $668,600 $7,500 N/A $661,100 $712,258 $51,158
Change oil supplier 5,392 $668,600 $10,000 N/A $658,600 $764,473 $105,873 X

12. ROI Decision Making on an Asset-By-Asset Basis
Yes/
/No
Life Extension Options RUL
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Extension
Net Cost
Postponed
Net FV RUL
RUL
Extension
ROI (Net
Financial
Gain)
X Max ROI Derate 24 months $412,056 $555,185 +$115,185
Target Date Derate 6 months $433,014 $466,522 +$26,522
Clean Existing Oil 12 months $435,000 $504,928 +$64,928
Flush, Same Oil 18 months $432,500 $549,875 +$100,875
X Flush, New Oil Supplier 24 months $430,000 $579,361 +$139,361

13. Site-Level ROI Model
Input Variables
1) Seasonal impact on
downtime – high/low wind
season
2) Crane mobilization cost
3) Gearbox replacement
grouping
4) Gained revenue from
reduction in downtime
5) Gearbox supply chain
management
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Calculate ROI
• Site optimization needs
• Model optimization
ROI Trade-Offs
What action(s) are
best?

14. Bearing Predictions for Clipper Gearbox
A good prognostics program allows you to quantify
“what-if” scenarios to extend RUL.
Quantify Impact of:
Lubrication change, auto-lubrication systems, partial de-rating, etc.
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014

15. DigitalCloneTM Live
Asset location and risk
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Most risk to least risk
Drilldown to component
level

16. DigitalCloneTM Live
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
Operation and Maintenance
Options System and Component Level
Trade Off ROI
Results

17. Remanufacturing Impact on ROI
October 31, 2014
B - Failure initiates
C - Failure can be confidently
predicted - PROGNOSIS
A – Asset enters service
Time
Condition
D - functional failure
occurs
Gap between current diagnostic state
D and future prognostic state C.
18
New Gearbox Parts Prognostics: Faulted Gearbox
Contact Surface
Sub-surface
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.

18. Next Generation ROI
How do we know when and how to optimize remanufacturing?
Financial Data
Service and
Maintenance
Data
Remanufacturing
Lifing Data
Industrial Internet: Cutting Costs for Energy Producers by 1 cent per kW hr.
October 31, 2014
ROI

19. Industrial Internet: Cutting Costs for Energy
Producers by 1 Cent per Kilowatt Hour
October 31, 2014