Monthly Archives: May 2017

Acronyms in wind farms construction

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I’ve been informed by one of my most affectionate reader that some acronyms that I’m using in the blog are not immediately clear.

Therefore I’ve started a first list of the most used ones - special thanks to Janos for helping expanding the list:

AEPAnnual energy production.
BoPBalance of plant. All civil (roads, foundations, crane pads) and electrical works (cables, substation, etc.) in the wind farm.
CapExCapital Expenditures
CODCommercial operation date
COECost of energy
EISEnvironmental impact sudy
EPCEngineering procurement and construction. A type of contract (also known as "turnkey")
FIDICInternational Federation of Consulting Engineers  (Fédération Internationale Des Ingénieurs-Conseils)
HSHealth and safety
HVHigh voltage
IPPIndependent power producer
IRRInternal Return Rate
LDLiquidates damages
MLAMechanical Load Assessment
MVMedium voltage
MWMegawatt
O&MOperation and maintenance
OEMOriginal equipment manufacturer. Here, the company producing the wind turbine.
OMAOperation and Maintenance Agreement (sames as SMA)
OpExOperation expenditures
PCCPoint of common coupling
PPAPower purchase agreement
RoWRight of way. The legal right to use a certain route.
S&ISupply and installation
S/SSubstation
SCADASupervisory control and data acquisition
SMAService and Maintenance Agreement (same as OMA)
SoWScope of work
TSATurbine supply agreement. The contract between the wind turbine manufacturer and the wind farm developer.
W&SWind and site. Usually, either the assessment of the wind farm (W&S study) or the department doing it.
WFWind farm
WTGWind turbine generator

Chinese wind turbines - are they coming?

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Well, apparently the answer to this question is "not yet".
I've been through an interesting article from Bloomberg - the  images of this post are taken from the same source.
As you can see, in addition to a new reshuffle in the top 3 (Vestas up again, together with GE), there is another important piece of information: Goldwind (and other Chinese companies such as Guodian United Power) are big but they are selling mainly in China.
European manufacturers have not been able to penetrate the Chinese market, but also the opposite is true.
Nevertheless, maybe the wind is changing: for instance, Envision has been recently awarded 4 wind farms in Argentina.

 

Wind site assessment

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The wind site assessment (or "wind and site" assessment) is one of the most important steps in the development of a wind farm.

Basically is a in depth analysis of the site conditions of the area where a wind farm could be built.

Purpose of this assessment is calculate energy production and suitability of a specific WTG model to the local conditions.

Such study is usually performed by different stakeholders – external consultancies (possibly on behalf of financial institutions), wind turbines manufacturers and even developers (if they are big enough to have a wind & site department in house).

The inputs for the site assessment are:

  • Wind data
  • Topography & Roughness conditions
  • Other environmental conditions

Wind data includes usually raw data from one or more met masts. Measurement period should be sufficiently long, ideally several years. Key data are the wind rose (from where the wind is blowing), the distribution of the wind speeds (it follows a Weibull distribution) and the normal and extreme wind speeds.

Topography & Roughness conditions have an impact on turbulence, flow inclination and local speed up effects that can be key in the selection of the correct wind turbine.

Other environmental conditions include parameters such as temperature (both very high and very low temperature will need a special “package” and usually leads to decreased energy production), air density (will change the loads, and if very high or low could lead to a derating) and seismic actions (will the tower withstand earthquakes?).

All this data is cross checked against standard wind classes. These classes have been defined by the IEC, an international committee of experts, and are often used to categorize a wind turbine model. For instance, wind turbine A could be certified for wind class I (strong wind) while wind turbine II could be certified for wind class III (weak wind).

It’s important to highlight that usually there is uncertainty on one or more parameters. Therefore different assumptions are made by the wind & site engineers. The interesting part of the story is that, depending on where you are working, you will be interested in “twisting a bit” the numbers in a different direction.

For instance, an external consultant will usually be more conservative when analysing energy production (as he doesn’t want to be blamed if the actual production is lower).

Conversely, a WTG manufacturer could possibly give you higher number when calculating energy production. This is good for 2 reasons: because more production means more money for the prospective customer, and because considering higher loads put the engineer on the safe side when assessing expected life of the key components of the wind turbine.

Land lease and site access: 5 usual mistakes

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You would be surprised to discover the amount of problems that are generated by missing, uncomplete or wrongly defined land lease and site access agreement.

Land lease contracts must be negotiated by the project company (that is, the developer of the wind farm) with the landowners.

It’s extremely rare to have the whole wind farm built on the land of a single owner. Usually, wind farms are built in agricultural areas – therefore these contacts must be negotiated with several counterparts.

The most usual problem connected with such contracts are:

  • Incomplete land acquisition. I’ve frequently seen layout changes at the very last minute because the project company couldn’t close one (or more) leasing agreement. The consequence is that roads, crane pads and/or wind turbines have to be repositioned.
  • Wrongly defined land occupation. A classic situation – it could happen for instance that the developer has a contract granting few meter of width to build a road. The problem is that to build a 5 meters wide road, you will need much more space to move with construction equipment, to store materials, to have space for embankment, etc.
  • Right of way wrongly defined. This is a classic as well – developers are sometime not aware of the amount of space needed to move the blades. This might force you to touch wall, trees or other properties not included in the agreement.
  • Social conflicts due to different payment terms. In some situations, a conflict may occur if neighbors are getting paid different amount of money for the same land lease agreement. Correct strategy here is to offer a fixed sum to all.
  • “Aerial” rights. I’m not sure about the terminology. However, I’ve worked on a project where, when the WTG was orientated in a certain way, the blades were rotating over a land plot without a land lease. Guess what? Yes, we had to move the turbine.

Split EPC contracts

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As you probably will be aware of if you are reading this blog, an EPC is a typology of contract where a company agree to develop the engineering, procurement and construction of a facility (in this blog, a wind farm) for a fixed, “lump sum” amount.

The key advantage of this type of contract is the existence of a single point of responsibility.

This improves in some situation the bankability of the project, as it puts the investors in a simpler position - if somethings go wrong, they have only one counterpart to deal with and there is no room for common discussions like “it has been built correctly but the engineering is wrong” or “I was on schedule, but this other subcontractor is late”.

However, sometimes the EPC contract is split. This word can be used with different meanings.

If it is referred to the contract between the wind farm developer and the main EPC contractor, it usually means that 2 different contracts are created, one for the onshore construction and another for the offshore supply. This is normally done for taxes purposes.

The second meaning refers to the fact that 2 different contracts are created – one for the supply of the wind turbines and another for the balance of plant. In this case, there are 3 parties involved: the developer of the wind farm, the wind turbines supplier and the construction company.

With this setup, a third agreement is needed to deliver a single point of responsibility despite the split. This third agreement will “wrap-around” the other 2 contracts defining coordination, interfaces and guarantees. Obviously, the lender will try to keep the other 2 parties jointly liable as much as possible.

The third meaning arise from the main contractor perspective. In this case, splitting a contract means dividing the task between 2 or more subcontractors (usually one for the civil works and another for the electrical works).

For instance, the main EPC contractor (for example, the wind turbines manufacturer) could be interested in closing 2 other EPCs – one for the civil works and another for the electrical works. Usually, splitting contracts will reduce cost and increase the risk and complexity of the project.