Caught in the Crosswinds: Navigating the Surge in Wind Energy Disputes – Part III: Turbine Supply, Operation and Maintenance Disputes

The wind power industry has a key role to play in the future of energy. But it has experienced well-documented growing pains over the past few years.

Our article series “Caught in the Crosswinds: Navigating the Surge in Wind Energy Disputes” addresses common types of disputes on wind power projects in the current economic climate, and offers practical tips on how to avoid and manage them effectively.

This article addresses Turbine Supply and O&M Disputes.

What you need to know

• Turbine supply, operation and maintenance lies at the heart of wind project value, but also project risk
• Disputes arise around common pinch points like taking-over, defects, performance and availability

What you need to do

• Take heed of the practical lessons in this article for avoiding and managing these disputes
• Be proactive in implementing these lessons in your future turbine supply and O&M agreements to improve outcomes for future wind developments

In our previous article on construction disputes, we noted that wind turbine generator (WTG) supply (and installation) agreements (TSAs) and associated operation and maintenance (O&M) arrangements warranted separate treatment. WTG supply and O&M arrangements sit at the heart of project value, but also project risk. Disputes are common, including over issues like the timing and effect of taking‑over, quality and defect liabilities, scope of services, and performance and availability guarantees. These issues are magnified by disaggregated procurement (especially in offshore wind), squeezed margins, rapid design iteration, and a globalised supply chain in which logistics shocks and regulatory change reverberate quickly.

The distinction between TSAs and O&M agreements

Before turning to the common disputes which arise, what do these agreements cover?

Critically, the TSA and O&M agreement must be carefully coordinated. Misalignment between the two is a common source of disputes. The table below provides a side‑by‑side comparison of the key obligations, typical terms and risk management features of each agreement.

Key dispute themes and their drivers

Several structural and market features drive disputes under TSAs and O&M agreements. We consider the key dispute themes we are seeing, together with the dynamics that produce them.

1. Taking‑over: Taking-over is one of, if not the, most important milestones of any wind project. Whether by WTG, strings/clusters, or whole‑of‑farm, the date of taking-over often determines the commencement of DLPs and O&M obligations, the possibility of starting revenue generation and, if there are delays, LD exposure (both of the employer under offtake agreements and the WTG supplier under the TSA). Disputes over such a significant milestone are almost inevitable. Three particular themes have emerged in our cases. One is the question of whether the specified technical requirements of taking-over have been achieved. This often turns on technical expert evidence about whether an identified issue is sufficiently serious to prevent taking-over (e.g. because of its impact on safety, design life or energy production). If not, can it be classified as a minor "punch list item" that can be resolved after taking-over? Another contentious issue is whether the WTG supplier is entitled to an extension of time to the relevant taking-over deadline, which turns on fairly typical delay analysis. The third question is around the operation of "deemed taking-over" provisions, and in particular whether taking-over is deemed to have occurred because, for example, there has been owner prevention (e.g. by the failure of the owner to provide grid connection) or the owner has failed to respond to a request for a taking-over certificate within a defined period (a surprisingly common occurrence).
2. Defects liability and TSA/O&M boundary disputes: Defects have been a regular feature of our TSA and O&M disputes. Much turns on the negotiated allocation of risk. Owners typically seek broad defect definitions, protection for serial defects and extended DLPs reflecting the operational reality of latent issues emerging over time. WTG suppliers typically seek strict two-year DLPs, to exclude or limit latent and serial defect liability, and to avoid liability in specified circumstances. Examples of this are where the WTGs are operated by the owner other than through the WTG supplier and/or other than in accordance with the WTG supplier's directions and manuals. Whatever the allocation of risk, defects are factually and technically complex issues to resolve. Disputes tend to escalate, not necessarily because of uncommercial stances taken by the parties, but because of genuine uncertainty and disagreement over cause, including how operation and maintenance practices may have contributed to the evolution of a defect, or how it was mismanaged. Poor drafting creates gaps or blurred lines between TSA and O&M regimes and there can be uncertainty as to which agreement responds to a given failure.
3. Local content requirements: Various jurisdictions impose local content requirements on wind project developers, which are routinely passed down to WTG suppliers and O&M contractors. Disputes typically arise around the scope of the obligation to comply with local content requirements (e.g. whether it is absolute or more akin to a reasonable endeavours obligation). The scope and application of exceptions to those obligations (e.g. for insolvency of local subcontractors, or quality or delay issues in local supply that are outside the control of the main contractor but which jeopardise the project) may also be contentious. Other issues include the scope of obligations to mitigate any unavoidable local content deviations, and the calculation of liquidated damages if local content obligations are not met (including the application of caps on liability).
4. Scope of O&M services: O&M scopes typically divide into scheduled maintenance, unscheduled maintenance and additional services. We have seen disputes arise when essential works sit in "additional" buckets with no obligation to perform, or where exclusivity provisions prevent owners from engaging third parties despite performance concerns. This is acute for offshore projects, where exclusive access rights may conflict with the owner's need for rapid response during narrow weather windows. Owners should interrogate whether the boundary between unscheduled and additional services is drawn by cost thresholds, component categories, or root cause.
5. Availability warranties and exclusions: Availability warranties are the commercial centrepiece of O&M agreements, with significant financial consequences attached to them. Bonuses can be on offer for measured average availability above the warranted average availability. Conversely, liquidated damages may be levied for measured average availability below the warranted availability. These financial consequences create friction. Key flashpoints include: disagreement as to start dates for calculating availability liquidated damages (often tied to disputes about the date of taking-over); baselining assumptions (particularly where actual wind conditions diverge from test studies); the scope of "deemed" or "assumed" availability events which boost the measured average availability calculation (e.g. force majeure, failure in balance of plant works, adverse site conditions or safety issues or grid curtailment); and the interpretation of caps on liability and consequences of reaching them (especially if linked to termination rights).

Practical tips for avoiding and managing these disputes

1. Be deliberate about taking-over mechanics: Avoiding taking-over disputes ultimately comes down to clearly drafted and objectively verifiable conditions for taking-over that leave little room for debate. Vague wording here is in no-one's interest. The technical nature of many of these disputes (especially regarding what constitutes "minor" punch list items) means they are ripe for early (even if non-binding) input from independent experts (whether ad hoc or as part of formal expert determination procedures). Deemed taking-over provisions should be identified with flashing lights in any contract management planning (especially by the employer). .
2. Nail the interface on defects: To avoid the risk of gaps or blurred lines between TSAs and O&M agreements, draft a matrix specifying which agreement responds to which failure modes during which period. Such a matrix forces a conversation on a notoriously neglected interface issue, whether or not included in the agreements themselves. It promotes clearer allocation of risk and responsibility across these agreements. Also consider back-to-back warranties and cross-default provisions (especially where different entities sign the TSA and O&M agreement).
3. Plan for local content compliance: Draft local content obligations with precision: specify whether the obligation is absolute or qualified (e.g., reasonable endeavours). Define clear exceptions for circumstances outside the contractor's control such as insolvency of local subcontractors or quality and delay issues in local supply chains. Include realistic mitigation obligations requiring the contractor to identify alternative local suppliers or seek regulatory relief before claiming an exception. Ensure any liquidated damages regime for non-compliance is calibrated to reflect the actual consequences of deviation, with clear caps on liability and carve-outs for excusable shortfalls.
4. Write an O&M scope that matches operational reality: Draft service schedules with granular task lists rather than generic descriptions. Ensure no essential works sit in optional buckets. Clearly allocate major component replacement. Consider a limited owner step-in right where: the contractor fails to respond, material safety risks arise, mitigation of damages so requires, or availability falls below the threshold for consecutive measurement periods. For offshore projects, address vessel scheduling, logistics and seasonal access constraints explicitly. Scrutinise exclusivity provisions to ensure they do not prevent owners from engaging third parties where the O&M contractor underperforms.
5. Build availability regimes on transparent rules: Draft a closed and clearly defined list of deemed availability events. Agree baselining assumptions that reflect realistic wind conditions, not optimistic test studies. Include quarterly reconciliation, SCADA audit rights and a streamlined dispute mechanism for contested availability calculations. Clearly define liability caps and any associated termination triggers.

Ashurst has extensive experience advising on wind (and other renewable energy) disputes, including helping clients reach negotiated solutions as well as acting as advocates in formal proceedings. We work as a single cross-border team and alongside our transactional energy lawyers to provide a seamless and informed service to clients. Our experience and industry knowledge ensures we avoid, mitigate, manage and resolve our clients' disputes in the most efficient, commercial and cost-effective manner possible. For more detail on our experience and global capabilities see our international arbitration page. You can find previous articles in this series here and here.

Want to know more?

• Caught in the Crosswinds: Capacity Reservation and Early Works Disputes, 30 September 2025
• Caught in the Crosswinds: Construction Disputes, 12 December 2025

Other author: Yoshi McGeary, Associate.