October 2016

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Due to my education as a Civil Engineer there I already wrote a substantial number of posts regarding cost of the civil BoP.

However I do not want to neglect the electrical side, which as you might already know is usually accountable for approximately 50% of the total cost  of the balance of plant of a wind farm.

I went through the cost of several projects I’ve worked at in the last 6 or 7 year together with a very good friend that I’ve left in Madrid to see if it was possible to find a recurring pattern in the numbers.

Unfortunately, the Electrical Works costs are much more fragmented than the Civil Works, where few “usual suspect” such as concrete, steel and earthworks dominate the scene and are the key cost drivers.

If you are working in the wind business you will be probably thinking  that the most expensive items will be the main transformer.

This is not always the case: in project where we had to quote a long overhead line, it absorbed up to 40% of the electrical budget, quite an impressive figure. Even shorter overhead lines could easily end in the 10% to 20% range, that in a multimillion project  is obviously a big number.

The second item competing with the transformer in the Top 3 is the medium voltage cabling system.

Obviously is extremely difficult to give a number because it will depend on the layout of the wind farm (will it be a row of WTGs or a “cloud” of scattered positions?). Nevertheless, numbers in the 3 to 4 million USD are not unusual even for medium size wind farms.

Then you have the transformer, the last of the Top 3 items. This is the easiest item to quote, usually somewhere around 1 million USD.

Last but not least we have “the rest”. This include everything from the switchgears to the high voltage equipment to the capacitor banks, substation facility and other fancy equipment in the substations.

The impact of all this item can be huge, from 30% all the way up to 70%. Obviously, with such fragmentation it becomes clear that from the cost structure point of view Civil Works and Electrical Works are totally different.

There are several recurring questions that I normally hear at least 3 or 4 time each year.
Some are variants of things like “How much does it cost 1 Km of road in Brazil?” - this was asked by my ex colleague Pau many, many years ago but it’s still a classic for me, and a reminder of the fact that in the wind industry BoP is something ancillary to the core business and not really understood by the majority of the colleagues.

Other questions are more interesting (or at least, it is possible to try to answer them in a more elaborate and complete way).
This is the case of the question “What is more expensive, EBoP or CBoP?”
If you are reading this blog you will probably know the meaning of the acronyms:

EBoP: Electrical Balance of Plant – that is substation, medium voltage cables, step up transformers (if any) and in some cases overhead line.

CBoP: Civil Balance of Plant that is roads, WTGs foundations, crane pads, trenches and other fancy stuff that could be requested by the specific customer/project.

And the answer is… it depends.

In some project, you are requested to build 2 or more substations: one or more windfarm substation to collect the energy plus a substation to evacuate the energy to the grid. This type of layout will also need several Km of overhead line, in single or double circuit.
In situations like this, EBoP is usually more expensive – above all if you don’t need special foundations and earthworks are not particularly complicated (e.g. a flat country, like Uruguay).

The opposite case would be a situation where the EBoP is easy (maybe because there is an existing overhead line crossing the wind farm, or an even more lucky situation where you simply have to connect to an existing substation).
In this cases, if you also have expensive civil works CBoP will be clearly more expensive. This happened for instance in some project I’ve the pleasure to work at in Chile and Honduras.

You can see 2 examples in the pie chart at the beginning of the post.

By the way, if you really need to answer the question of Pau (“How much does it cost 1 Km of road in the country XYZ?”) the best answer that you can give is 100.000 euros.
If it’s a road in an expensive country, remote location, in the mountain, etc. increase the figure (150K – 200K euros), while if it’s in a cheap place it would cost around 80K.

Some days ago I’ve had the opportunity to spend an afternoon at the EWEA summit, the European Wind Energy Association main event.
It was held in Hamburg, city where I have the pleasure to live since December 2015, and it was simply HUGE.

This year, both onshore and offshore were held together, resulting in an impressive amount of stands.
Unfortunately, I wasn’t able to meet too many new company specialized in onshore EPC (my main business).

However, I was able to enlarge the list of contact in engineering companies – coming from several years in Madrid I know fairly well who is who in southern Europe, while I still have to familiarize more with northern Europe consultancies (mainly Danish, but also German or French).

All in all, it was a very interesting experience and a great occasion to meet a couple of old friends.