Presentations - Scottish Renewables

10/06/2015
Best Practice Tendering for
Offshore Wind
9 June 2015
In association with
Welcome & Chair
Hannah Smith
Scottish Renewables
1
10/06/2015
Project Procurement
Perspectives
Stephen Baker, Beatrice Offshore Wind Limited
David Sweenie, Neart Na Gaoithe
Scott Graham, Inch Cape
Mark Winfield, East Anglia One
Stephen Baker
Beatrice Offshore Wind
Limited
2
10/06/2015
Evolution of Beatrice Procurement
LF000005-TEM-004
•
•
•
•
Beatrice Contracting History
Contracting Strategy Revisit
Procurement challenges
Future opportunities
3
10/06/2015
Beatrice Contracting Strategy History
Max
EPIC
Less Management Resource
EPIC +
Co
st
/
Risk Transfer
SSE
Model
MW
Multi
Contract
Min
Min
Number of Subcontracts
Max
More Management Resource
Traditional EPIC
EPIC + Nominated Suppliers / Subcontractors
Proposed SSE Model
Multiple Contract 25+
Advantages of Alliance Strategy
(Based on a pipeline at 2010)
• Cost reductions though standardisation and manufacturing at
scale
• Greater level of visibility and control over the key elements
• Early project engagement with supply chain to improve project
definition and value
• More effective control of the FEED
• Potential reduction in the overall Capex
• Potential to be more agile and proactive in supply chain
management.
• Interface with bodies that can support the supply chain, e.g.
Crown Estate, Scottish & Local Enterprise Organisations, and
Port Authorities
• Potential to support external sources of funding and inward
investment which may in turn support the preferred supply chain
4
10/06/2015
Alliance Base Case
DESIGN
SUPPLY
FOUNDATIONS & SUBSTRUCTURES
DESIGN
SUPPLY
OSP, POWER SYSTEMS, ELECTRICAL BOP
DESIGN
SUPPLY
ARRAY CABLES
DESIGN
SUPPLY
EXPORT CABLES
DESIGN
SUPPLY
MARINE COORDINATION & INSTALLATION
WTGs
PACKAGE INTERFACE MANAGEMENT
PACKAGES ‐ EXISTING ALLIANCE STRUCTURE
INSTALL
Contracting Strategy Revisit
• De-risking BOWL exposure to execution
contract risk and interface risk
• Assessed a number of options from EPC to
multi-contract
• Impact of Project Finance & new shareholder
5
10/06/2015
3 Lots EPCI Packages
Procurement Challenges
Early
Contractor
Involvement
Investment
Contract or
CfD
Local Supply
Chain
Market
Capability
Project
Finance
Competition
Market
Standard
Ts&Cs
EPCI
Contracts
Government
considerations
6
10/06/2015
Future opportunities?
13
David Sweenie
Neart Na Gaoithe
7
10/06/2015
Neart na Gaoithe
“Strength of the Wind”
David Sweenie
Project Manager
Overview of Neart na Gaoithe Project
● Mainstream was awarded exclusive rights to develop the site by The Crown Estate in February 2009
● Project capacity is 450 MW
● Located 13‐30km off the Fife coast and covers an area of approximately 105km2
● Water depths of 45‐55m
● Grid connection secured ● Onshore consent awarded in June 2013
● First phase of detailed borehole data acquired summer 2014
● Consent awarded 10th October 2014
● Awarded CfD Contract 2015
8
10/06/2015
Technical Overview – Based on Proposed Strategy
Up to 75
Turbines
Jacket
Foundations
HVAC
Substation(s)
Up to 200 km of cable
2*220 kV Export
Cable
33 kV Inter Array
12.3 km of
Cable
Onshore Cable
220 kV to 400
kV Substation
FLIDAR
9
10/06/2015
Offshore Transformer Module
●
●
●
●
Neart na Gaoithe will deploy Siemens new Offshore Transformer Module (OTM)
Refined and optimised Offshore Substation
Deployed on a turbine foundation
Integrated with a turbine
Construction Process
●
Pile Installation Strategy – to be confirmed with final geotech
●
●
●
●
Jacket Installation
●
●
●
Drilled over a portion of site Drive – Drill – Drive installation of piles using a template
Onshore pile test will be conducted in 2015 (validation and optimisation of technique)
Installed on pre‐installed piles
Approximately 75m high structure (50m below water + 25m above)
Offshore substation(s) installation
●
Offshore Transformer Modules
● Stand alone ● Integrated with turbine
●
Cable installation
●
●
●
●
●
Turbine installation
Commissioning and Handover
Environmental Monitoring
Health and Safety
Marine Logistics
●
Onshore infrastructure installed in parallel
●
●
●
●
●
Array and Export
Onshore Substation
Onshore Cable
Directional Drills
Transition Bay
10
10/06/2015
Procurement and Decisions
● Construction Port Facilities – to be confirmed
●
●
●
●
●
Turbines
Foundations
Cables
Piles
Offshore Substation
● Electrical Transmission Sub‐Suppliers
● OFTO Assets – Offshore Substation to Grid
● Foundation Fabricator
● Offshore Substation Fabricator
● O&M Strategy
● Vessel Strategy
● Port Facility
Contractor Engagement for NNG
11
10/06/2015
Scope Split
Schedule Development
12
10/06/2015
O&M Strategy
● Onshore Based Workboat strategy with helicopter support for unplanned troubleshooting
● Dedicated Base port facility to be constructed by NNG ● Shortlist of ports ● All shortlisted have been assessed as suitable for activities.
● SPV asset management with 3 main sub‐contracts: SAA, BoP, EBoP (HV)
O&M Contract Structure
NNG Asset Management
SAA
Fixed price
contract with
Siemens
Service UK
EBoP BOP (HV)
Fixed and
Framework cost
contract
Owner SPV
Structure
comprising
management,
engineering and
project staff
Fixed and
Framework cost
contract STDL
13
10/06/2015
Asset Management Structure
● SPV management team comprising of ~50 personnel
● Personnel to cover –
●
●
●
●
●
●
Management functions Contracts management
Engineering Logistics management
Ports Management HSE management. ● Role over of key personnel from Construction management to provide continuity
Supply Chain Plan – Typical Assessment Criteria
● Health, Safety and Environmental (10%);
● Maintaining the health and safety at work of Mainstream’s staff and any contractors and taking care of the environment are core values of Mainstream.
● Technical (25%);
● Mainstream encouraged innovative technical proposals from (A) turbine suppliers to provide maximised power delivery, whilst at the same time complying with consent conditions and meeting strict delivery timetables, and (B) EPC contractors to provide effective foundation solutions to overcome challenges associated with water depths (c.50m) and sea‐bed conditions.
● Bankability (30%);
● The ability to raise project finance is dependent on the use of proven/certified components, techniques and designs in the construction of the wind farm (e.g. a requirement for any selected turbine was to be compliant with the IEC 61400 series of Wind Turbine Standards and to have demonstrated certification). The higher the bankability score, the lower the overall cost of project debt, a key driver in achieving a lower cost of energy.
● Local Content and Sustainability (15%); and
● Local content, with particular emphasis on Scotland, was established as an important element of all contracts to be awarded for the Project.
● Indicative Cost (20%).
● Detailed pricing proposals were requested from all contractors and provided in a format which enabled Mainstream to determine sub‐categories of work, anticipated margins, contingency requirements, as well as areas for future improvement and cost‐down initiatives.
14
10/06/2015
Supply Chain Engagement Events
● 3 targeted supply chain events with the operator and main contractors
●
●
●
●
●
Mainstream Renewable Power
Siemens Wind
GeoSea
STDL
Prysmian
● Locations to be finalised, although likely to be in:
● Dundee
● Fife
● East Lothian
● 2 additional skills based events in Fife
● Diversification of local industries
● Providing opportunities to personnel exited, or exiting, the military
Supply Chain Engagement
● http://www.nngsupplierdatabase.com/
15
10/06/2015
Thank You
[email protected]
[email protected]
Scott Graham
Inch Cape
16
10/06/2015
INCH CAPE OFFSHORE WIND FARM
Scottish Renewables
Best Practice Tendering for
Offshore Wind
Scott Graham, Procurement Manager
©
INCH CAPE PROJECT
 Scottish Territorial Waters Site
 Located 15 - 22km off the Angus
coast
 Development water depth 40 - 57m
 Area of 150km2
 Grid connection at Cockenzie
available in 2017
©
34
17
10/06/2015
PROGRESS
● Offshore Consent Granted 2014
● Onshore Planning Permission in Principle Granted 2014
● Conceptual Design nearing completion
● WTG Selection nearing completion
● First phase of offshore detailed geotechnical survey complete
● Onshore site investigation complete
● Wind resource assessment campaign installed…
35
©
MET MAST & LiDAR
©
36
18
10/06/2015
PRE-CONSTRUCTION PHASES
PROCUREMENT
37
©
PROJECT PACKAGES
Wind Turbine
Generators
Wind Farm
Transmission
Works
Manufacture
& Supply
WTG’s
Shipping
Transport &
Installation
WTG
T&I
BOP EPCIOffshore SE +
Foundations &
Substructures + Array
cables
Export Cable
+ Onshore SE
WTG’s
O&M
O&M LOGISTICS
© Repsol. Repsol Nuevas Energias UK Ltd. June 2015.
38
19
10/06/2015
PROJECT PACKAGES
● Windfarm EPC
● Transmission Works EPC (OFTO)
● WTG Manufacture & Supply
© Repsol. Repsol Nuevas Energias UK Ltd. - June 2015.
39
PROGRAMME KEY DATES
● Request for Proposals issued in 2014
● Received preliminary bids late 2014
● Currently evaluating the proposals and award of
contracts Q4 2015
● Preferred WTG supplier selected in July 2015
● Commence Refinement Phase in Q4 2015
©
40
20
10/06/2015
JOBS & UK CONTENT
● The Project will widely promote and undertake robust, transparent and competitive
procurement processes, delivering an estimated Gross Value Added of £1,078M
and 5,500 direct job years to the UK economy over the project life
● The Project will aim to deliver at least 50% UK content through the CAPEX phase
increasing to 70% UK content through the Operational phase
● The Project will utilise available port facilities on the east coast of the UK, working
with port owners to facilitate co-investment.
41
©
INNOVATION
● The Project will deploy ‘next generation’ WTGs in the 6 to 8 MW range.
● The Project will utilise either deep water jacket, gravity based designs, or an ICOL
bespokle hybrid design for foundations and substructures with average water depth
of 50m, leading the way for deeper water technology in the UK.
● Working with industry and academic groups the Project will lead the development of
improved techniques for environmental mitigation and monitoring.
©
42
21
10/06/2015
CHALLENGES FOR
SUPPLY CHAIN
● Engagement with Inch Cape contractors and other supply
chain specialist technology providers
● Delivery of Inch Cape Supply Chain Plan commitments
● Working to achieve acceptable LCoE
43
©
HOW TO GET INVOLVED
● Visit our website (www.inchcapewind.com)
©
44
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10/06/2015
HOW TO GET INVOLVED
45
©
HOW TO GET INVOLVED
● Visit our website (www.inchcapewind.com) for:
● Project news updates
● Supplier registration (follow link to Repsol Group)
● Details of tenderers for major contracts
©
46
23
10/06/2015
HOW TO GET INVOLVED
● www.inchcapewind.com (follow link to Repsol Group registration) or
google search “Repsol Becoming a Supplier” and complete the initial
questionnaire
● Come and visit us at Scottish Renewables Conferences/Exhibitions and
Meet the Buyer Events
● Speak to Scott Graham, Luis Seco or Richard Copeland afterwards
47
©
THANK YOU
©
24
10/06/2015
Mark Winfield
East Anglia One
Best Practice Tendering
Scottish Renewables Conference
Mark Winfield
Deputy Head of Contracts, UK
Scottish Power Renewables
R
09/06/2015
25
10/06/2015
Index
• SPR – Offshore portfolio
• EA1 Project Overview
• Project timeline
• Contract Strategy development process
• External influences to Contracting Strategy
• Delivery strategy
• Multi Contract Vs EPC ?
• Bespoke or amended standard forms of Contract?
• Which form of Contract to use ?
• Package Clustering
• Supply Chain Engagement
51
Offshore: A growing global portfolio
West of Duddon Sands
389 MW
Operational October 2014
50% JV with DONG
Wikinger
350 MW
Construction begins 2015
100% SPR
Saint Brieuc
500 MW
Planning application 2015
70% JV with Eole RES
East Anglia ONE
714 MW
Consented June 2014
CfD awarded February 2015
Four projects in three key markets
26
10/06/2015
East Anglia ONE Offshore Windfarm Overview
•
UK Round 3 Zone, total Zone
capacity 7.2 GW
•
Consent awarded for first project in
June 2014
•
CfD contract award in February 2015
- up to 714 MW
•
East coast of England – 45 km
southeast of Lowestoft
•
Area of 300 km2
•
Water depths range between 30 and
55 m
•
Jacket foundations
East Anglia ONE
Offshore Windfarm
Project Timeline
Consent • Mar 15 Design
• On / Offshore Jan 15 – Aug 17 Procure
• Onshore Jan 15 –Mar 16
• Offshore Jan 15 – Mar 16
Manufacture • On/Offshore Q4 2016 ‐ Q1 2019
Construct
• Onshore Jan 17 ‐ Jan 19
• Offshore Aug 18 – Jun 20
Asset Transfer
• Onshore OFTO – Jun 19
• Offshore Mar 19 ‐ Jun 20 O&M
• MAR 19 ‐
54
27
10/06/2015
Contract Strategy Development - Process
• Establish time frame for step change in support regime IC
• Identify optimal generation time frame
• Clarify project funding route
Identify
Support Regime
Draft
Programme
Contract Strategy
Review Business
Model
Procurement
programme
Establish defined stage gates Principle of optimising return on investment
Establish high level timelines for each package of work
•
•
Review supplier availability & Package Cluster Strategy Review Contract Conditions and risk exposure with suppliers
Establish LD levels required at Contract negotiation
Level of FEED progress needs to be ascertained before ITT
•
•
• Review Contract Conditions and risk exposure with suppliers
• Generation time frames
• Revision to supplier timeframes Review
Business Model
Budget Forecast
& Risk Register
•
•
•
Project
Organisation
•
Establish project organisation to align with procurement timelines
• Engage PQQ Process • Draft ITT Schedules
Commence
Tender Process
55
External Influences to Contract Strategy
•
•
•
•
• Balance sheet / debt / equity project finance
• Influence on Contract Strategy Segregation of Costs Warranty provisions
Package clustering
Transparency of tendering process
•
•
Influence on package budgets
Contract Strategies OFTO Project Finance
Government Policy Supply Chain •
•
•
Contractor & Vessel Availability Commodity Prices Technology maturity 56
28
10/06/2015
Which Contracting Strategy ?
EPC
Alliancing
Multi Contracting
Price Certainty CRTF Recommended
Appeals to larger market of Contractors
Client Low Risk
Group Pain / Gain share Principle
Liability apportioned accordingly
Limited Contractor Appeal Protracted negotiation
Increased interface management 57
Analysis EPC Vs Multi Contract - SWOT
INTERNAL
HELPFUL
EXTERNAL
.
HARMFUL
STRENGTHS
WEAKNESSES
•
•
• Duration –total construction time may be prolonged by required FEED→ EPC sequence
• Less visibility of cost‐breakdown through supply chain
• Independently proven Contractors, however collective management strategy may be weak.
• Consortiums capacity to engage on a Joint and Several Liability arrangement is limited
• Capacity/competition –few contractors have the balance sheet capacity to accept (and bond) the risk of large • Procurement negotiations may become protracted.
•
•
•
Minimises interface points. Contractor bears greater proportion of supply chain insolvency risk.
The contractor bears the risk of integrating the performance of all package contractors, including designers.
Administrative burdens on the owner are minimised; may require smaller project team
Remedies (such as LDs), liability caps and bond amounts are all sized relative to the total cost of the works and thus likely to cover a significant proportion of the project losses
OPPORTUNITIES
THREATS
•
• Cost –contractors will add a substantial risk premium to the price
• Control –the contractor controls the detailed design and construction process
• Quality –the contractor will aim for the minimum compliant standard
• Claims –contractors are motivated to make claims to alleviate risk transfer
• Caps –EPC risk transfer is in reality limited by express liability limits and by balance sheet and bonding limitations of contractors
•
•
•
The transfer of other construction risks is maximised relative to other procurement methods
The documentation is relatively simple and standardised
EPCI procurement is widely used and understood and is the most "bankable" procurement method
Economies of scale may result in better value for money based on larger contracts. 58
29
10/06/2015
Bespoke or amended standard form?
FIDIC – Suite of Contracts
• Principle of adapting on ‘on shore’ Contract for offshore use • Obligations of the parties under Contract is clear
• Requires significant Legal Technical & Commercial input to be fit for purpose
LOGIC – Suite of Contracts
• Oil & Gas industry based form of Contract
• Aligned more to fabrication and installation of offshore platforms
• Requires significant adaptation for other packages of work. BIMCO
• Vessel Charter Contract
• Significant risk apportionment to Client NEC
• Onshore civils based from contract
• Difficult to adapt to Offshore scope 59
East Anglia ONE Indicative Package Clustering
OFTO
WTG
Foundations
Array
Cables
Export
Cable
Offshore
Substation
Onshore
Cable
Onshore
Substation
Fabrication
Fabrication
Installation
Installation
Number of
contracts
TBC
Number of
contracts
TBC
Number of
contracts TBC
Detail
Engineering
Supply
Fabrication
Installation
O&M
Installation
O&M
Ports and Logistics –
(1) Construction, Monitoring and Management Port
(2) WTG Pre Assembly Port
(3) O&M Base Port
(4) Foundations Marshalling
60
30
10/06/2015
Supply Chain Stakeholder Engagement
• Competition
• Innovation
• Skills
Item What
1 Aspiration 50% UK
content target over life of
windfarm
How
• Suppliers to indicate UK content as part of ITT and
report post contract
2
Improved Supplier
communications



Share Fare - East Anglia 2015
Updating the website. Contact registered suppliers.
Filtering registered suppliers to provide to Tier 1s
3
BIS/ UKTI engagement

Keeping BIS & UKTI informed of the parties involved in
ITT
4
Supplier Supply Chain

Plan request from shortlist
Request a Supply Chain Plan from each shortlisted
supplier.
5
Sharing lessons learned
with suppliers

Optimising work packages through challenge and
shared learning
61
Questions?
hanks
• Register – www.eastanglia1.co.uk
• Details stored & shared with Tier 1 suppliers, updates
on project status, alerts to future Share Fair events
31
10/06/2015
Q&A
Supplier Perspectives
Alexander Bradshaw, Siemens
Ken Taylor, Found Ocean
Kirstin Barr, Babcock International
32
10/06/2015
Alexander Bradshaw
Siemens
9 June 2015
Supply Chain Perspective
Best Practice Tendering for Offshore Wind
Confidential © Siemens AG 2015 All rights reserved.
siemens.com/answers
33
10/06/2015
Introduction
• Alex Bradshaw
• Technical Sales Manager
• Siemens Wind Power Offshore
• 6 Years in Wind
• 3½ in Offshore Sales
• Projects
• Neart Na Gaoithe
• Moray Firth
• Inch Cape
• Rampion
• Navitus Bay
• Responsible for pre-sales through
to negotiation and contract signature.
Page 67
WP ST OF
Confidential © Siemens AG 2014 All rights reserved.
My Experience
• Customer focus
• Flexible and dynamic
• Business case awareness
• Focus on LCOE reduction
• Understand financing model
• Key driver CAPEX/OPEX
Page 68
WP ST OF
•
Confidential © Siemens AG 2014 All rights reserved.
34
10/06/2015
Good Practice (My View)
Timely Decision Making
Collaboration
Project Optimisation
Improved Business Case
Page 69
WP ST OF
Confidential © Siemens AG 2014 All rights reserved.
WP ST OF
Confidential © Siemens AG 2014 All rights reserved.
Future View
Page 70
35
10/06/2015
Ken Taylor
Found Ocean
Experience of Tendering For
Offshore Wind Projects
[email protected]
36
10/06/2015
First Observation
Everything is tendered
Our Activities
FoundOcean is a subsea and
offshore grouting specialist for the
global energy construction
industries.
Our primary area of expertise is
fixing structures to the sea bed by
foundation grouting.
We also provide structural repair
services for subsea and offshore
structures, as well as pipeline &
cable support & protection.
37
10/06/2015
Moray
Inch Cape
Butendiek
Fife Energy Park
Amrumbank
Ormonde
NOAH
Walney II
Walney
Gwynt y Môr
Nordsee Ost
WoDS
Borkum West II
Humber Gateway
Thornton Bank II
Haliade Test Turbine
Thornton Bank III
FO in the supply chain
Investor
Developer
Transport and Installation Contractor
Piling
Lifting
GROUTING
Our Supply Chain
38
10/06/2015
FO Contact Points In The OW Market
• Installation contractors
• Developers
• Foundation designers
• Turbine manufacturers
• Fabricators
• Vessel operators & brokers
• Certification authorities
• “Fluid” consortia of the above
Suggestions for getting involved
•
Track your existing customers
•
Participate actively in conferences
•
SE, SDI, SR can accelerate efforts
•
Look for monopolies
•
Look for one-offs:
• What are their plans?
• Opportunities for joint approach?
• Scottish Renewables “Offshore Wind &
Supply Chain”, January, Aberdeen
• Well informed, well connected, keen to
help
• People like choice
• Articulate your unique value
• Prototypes, metmasts, demonstrators,
substations
39
10/06/2015
First Observation
Everything is tendered
• Have a strategy for communicating
value and differentiators
• Don’t rely on the tender to win work
Second Observation
Tendering far in advance of final
specification
Therefore multiple iterations and
revisions to be managed
40
10/06/2015
Third Observation
Tendering far in
advance of revenue
•
•
Therefore consider
inflation risk
…..And exchange
rate risk
Tendering process challenges
WF1
T&I contractor 3



T&I contractor 4

T&I contractor 5

T&I contractor 1
T&I contractor 2
• Plus scenario options within each
• Plus subsequent revisions
41
10/06/2015
Fourth Observation
Have a process for efficient
production, quick turnaround, and
version tracking
Tendering process challenges
CfD Auctions
WF1
WF2
WF3
WF4
WF5
T&I contractor 3















T&I contractor 4





T&I contractor 5





T&I contractor 1
T&I contractor 2
• Plus scenario options within each
• Plus subsequent revisions
42
10/06/2015
Fifth Observation
It’s not 25 opportunities!
Manage impact on revenue
forecasting and “hit rate” metrics
Contracting & Procurement Challenges
• Vision
• Engineering & project teams
decide, based on:
• Merits of solution
• Risk identification and mitigation
• Expertise and experience
• Big picture vision when determining
value
• Reality
• Procurement team calls the shots
• Death by spreadsheet
43
10/06/2015
Moray
Inch Cape
Butendiek
Fife Energy Park
Amrumbank
Ormonde
NOAH
Walney II
Walney
Gwynt y Môr
Nordsee Ost
WoDS
Borkum West II
Humber Gateway
Thornton Bank II
Haliade Test Turbine
Thornton Bank III
FoundOcean
[email protected]
+44 (0) 7740 248 864
44
10/06/2015
Kirstin Barr
Babcock International
Babcock Renewable Energy
45
10/06/2015
Strictly Private and Confidential
Babcock
International
Group
The UK’s Largest
engineering support
services organisation
FTSE 100
£3bn turnover
Emergency
Services
27,000 people
worldwide
Training
Defence &
Security
Energy
National
Infrastructure
Education
www.babcockinternational.com
Oil & Gas
Renewables
Nuclear
Main presentation title
can sit on two lines
With a further description underneath
Commercial
Marine
46
10/06/2015
Strictly Private and Confidential
Targeting Offshore Substations
Strategy
development
Active engagement
with the market
• Desktop analysis –
explore
opportunities and
identify value add
• Key stakeholder
engagement at all
levels
• Networking events
• Heavily bidding
over last 12
months
• Understand the
market
• Exhibitions and
conferences
• Learning from
feedback
• EPC/B2P OSPs
• Industry
workgroups
• Preferred approach
collaboration - EPC
• UK focus initially
• 6 month refresh evolving market
•
Bidding activity
• All UK
opportunities
Industry workshops
• Tier 1/tier 2
dependant on
contracting method
www.babcockinternational.com
93
Strictly Private and Confidential
The Rampion OWF
Developer/client: EON Climate and Renewables
Location: English channel, 13 km off the coast of Sussex
Scale of zone: The zone extends approximately 28 km in an east to west
direction and approximately 10 km in the north to south direction.
Scope of Supply:
• Engineering, procurement, fabrication, construction.
• Integration of LV equipment
• Onshore commissioning of LV equipment
• Load out on Transportation Vessel
94
www.babcockinternational.com
47
10/06/2015
Strictly Private and Confidential
Tendering process
Clarification
period
Nov 14 – Jan 15
PQQ
submission
June 14
ITT
submission
Oct 14
BAFO
submission
Jan 15
Contract sign
mid May 15
Contract negotiation
period
Jan 15 – April 15
How did we succeed?
•
We understood the market
•
We understood the client and their key drivers through early engagement with the client
•
We had been tracking the opportunity
•
We had a formal and structured approach to delivering a customer focussed bid response
•
We followed best practice and robust governance throughout the business winning cycle
•
We worked collaboratively and openly with the client
•
Wider stakeholder engagement
www.babcockinternational.com
95
Strictly Private and Confidential
Key challenges in tendering
96
Challenge
Approach
Internal readiness to
respond
(bid timings)
•
•
Engaged with relevant internal stakeholders as early as
possible
Pipeline reviews/6month look ahead
Timescales to
turnaround bid
•
•
•
Had team identified
Operated under clear governance
Bid strategy/plan
Resource constraints
•
•
•
Clear roles
Daily morning stand up meetings
Use of Subject Matter Experts across functions
Investment
•
•
•
•
Ensuring a targeted approach
Knowing where to invest
Certainty of projects
Pipeline of opportunities
Access to information
•
Significant variations in quality and level of information
Competition
•
•
Understand competition
Ensure compelling offering
www.babcockinternational.com
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10/06/2015
Strictly Private and Confidential
Delivery
Complete
Manufacturing
Q2 2016
Contract sign
mid Q2 2015
Early Engineering
works
Q1 2015
Commence
Manufacturing
Q3 2015
Delivery to
offshore site
Q4 2016
Load out Q4 2016
Key to successful delivery:
• Interface management
• Collaboration
• Efficient build method
• Early engagement
• Effective make vs buy approach
97
www.babcockinternational.com
98
www.babcockinternational.com
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Q&A
Understanding Risk
Sam Millard, Codan
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10/06/2015
Sam Millard
9th June 2015
There ain't no mountain high enough,
Ain't no valley low enough,
Ain't no river wide enough
To keep us from getting
to you…….
Introduction
to the
underwriting world of
Offshore Wind
- Scottish Renewables
101
102
AGENDA
Introduction of Codan’s offshore wind team
Introduction to THB
General underwriting concerns
Q &A
Wrap up and close
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10/06/2015
INTRODUCING RSA & CODAN
RSA AND CODAN HAS
A STRONG AND WELLBALANCED
PORTFOLIO WITH
MAJOR OPERATIONS
ACROSS THE GLOBE
MARKETLEADING
UNDERWRITING
Strong reputation
for technical
excellence.
HERITAGE
FTSE100 listed general
insurer and a leading
provider of commercial
insurance for more than
300 years.
CREDIT
RATING
RSA is financially
strong. S&P rated: A.
STRONG
GLOBAL
PORTFOLIO
UK & Western Europe,
Canada, Scandinavia,
Latin America and the
Middle East.
CORPORATE
SOCIAL
RESPONSIBILITY
The first
carbon neutral
insurer.
SCALE
17 million customers in
more than 140
territories; approx
20,000 employees.
CUSTOMER-LED
SERVICE
DELIVERY
Knowledge and
understanding of
customer need tailors our
service.
FOLLOWING OUR CLIENTS… WHEREVER THEY GO
First offshore wind
project in the world
First onshore
wind park
First floating
turbine
First offshore
grid/cluster
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10/06/2015
PROVIDING CAPACITY TO 80 % OF THE WORLDS OFFSHORE WINDFARMS
1. West of Dudden Sands (389 MW)
20. Horns Rev II (209 MW)
39. Vindeby
2. Gwynt Y môr (576 MW)
21. Rhyl Flats (90 MW)
40. Bockstiegen
3. Global Tech I (400 MW)
22. Robin Rigg (180MW)
41. Nysted / Rødsand (166 MW)
4. Dan Tysk (288 MW)
23. Rødsand II (207 MW)
42. North Hoyle (60 MW)
5. Baltic II (288 MW)
24. Wave Hub
43. Lynn & Inner Dowsing (194 MW)
6. Riffgat (108 MW)
25. Samsø
44. Scroby Sands (60 MW)
7. Meerwind (288 MW)
26. Hywind
45. Blythe
8. Butendiek (288MW)
27. Horns Rev I (160 MW)
46. Northwind (272 MW)
9. Karehamn (48 MW)
28.Lillgrund (110 MW)
47. Amrunbank (288MW)
10. Humber Gateway (220 MW)
29. Borkum West II (200 MW)
48. Q10 (129 MW)
11. Teesside (62 MW)
30. C-Power Phase II+III (295 MW)
49. BorWin 1 & 2
12. Baltic I (48MW)
31. Alpha Ventus (60 MW)
50. SylWin 1
13. Robin Rigg (180MW)
32. Nordsee Ost (288 MW)
51. HelWin 1 & 2
14. Barrow (90 MW)
33. Sheringham Shoal (315 MW)
52. DolWin 1 & 2
15. Burbo Bank (90 MW)
34. Ormonde (150 MW)
53. Fukushima Recovery Project phase 1
16. Kentish Flats (90 MW)
35. London Array Phase I (630 MW)
54. Gemini Offshore Wind Farm (600MW)
17. Greater Gabbard (504 MW)
36. Lincs (270 MW)
55. Wikinger
18. Thanet (300 MW)
37. Utgrunden
56. Nordsee One
19. Lillgrund (110 MW)
38. Ytre Stengrund
57. WindFloat
Market leading experience in Offshore projects
YOUR OFFSHORE RENEWABLE ENERGY TEAM
Offshore underwriting
Sam Millard, Int. Manager
Henrik Møller, Chief UW
Jan Petersen, Senior UW
Tom D. Kristiansen, Trading UW
Michael Schlüter, UW Germany
Jonas Dalsgaard, UW UK market
Marine Warranty Surveyors
Søren Pedersen, Master Mariner
Lars Krauthammer, Nav. Architect
Preben S.Jørgensen, Marine Eng
Louise Windelboe, Master Mariner
Jesper Perge, Nav. Architect, M.sc.
Hans Henrik Krogh, Nav. Architect
Offshore Risk Engineering
Truels Kjer, Chief Risk Engineer
Finn Thyrring, Manager, B.sc.
Jeppe Lyngaae, B.sc.
Jan Mikkelsen, B.sc.
Peter Krarup, Sr. Risk Engineer
Claims
Torben Larsen, Manager, B.sc.
Claus Hein, Engineer B.sc
Jens Ove Nielsen, B.sc
Marcus Wassini, B.sc.
Betina Olsen, Sr. claims handler
Jason Webb, UK Offshore Wind
Senior management
Brendan M. Reed, Nordic Director
Client team tailored to service our individual clients and brokers
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10/06/2015
STRATEGIC DIRECTION OF CODAN OFFSHORE WIND
• Maintain leading posítion in offshore wind
insurance business
• Build stable, long-term relationships with
key customers e.g. via Captive Fronting
solutions
• Openly communicate with clients & brokers
to share our risk management expertise and
sector experience – lessons from losses etc
• Stay on top of and support industry
developments
• Claims protocols in place to minimise the
chances of delay in the claims process
Sharing knowledge
108
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10/06/2015
Codan philosophy
“In order to support successful execution of our clients´ projects during planning
and construction, we aim to make our knowledge available to the project team;
sharing insights gained from vast experience with offshore
construction projects throughout the past +20 years.”
109
CLAIMS OVERVIEW AS OF DECEMBER 31st 2014
Facts / 2003-2014
• Total claims in #: 572
• Total claims cost : 158mEUR
• 6 dedicated claims adjusters
• 5 wind risk management engineers
Take away message
110
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CLEAR TENDENCY IN CLAIMS AND COSTS
111
CABLE CLAIMS – ROOT CAUSES
112
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10/06/2015
Underwriting
concerns
113
FACTORS TO ASSESS PROJECT RISKS
Technology risks
Proven technologies
Costs to repair
Vessel costs, long term charter
Insurance
Terms and conditions
Deductibles
Defects exclusions
Series losses
Sublimits
Delay in startup
Warranties & extended
maintenance periods
Physical factors
Distance from shore
Sea & geography
Water depth,
Contractors
Experience
Tools and equipment
Installation methodology
and timeline
114
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WIND ENERGY EVOLUTION
115
FOUNDATIONS
116
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10/06/2015
THE ROLE OF THE MARINE WARRANTY SURVEYOR
• MWS - scope for offshore installation of major constructions
• MWS - scope for subsea cable installations
117
YOUR STABLE AND LONG TERM PARTNER
Codan has insured wind turbine
projects from the very beginning
....and we have kept this business
even through the very bad times
….we are here for you now
….and we will be here in the future
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10/06/2015
THANK YOU
&
QUESTIONS
119
Tendering Support
Colette McBride, Scottish Enterprise
Kateryna McKinnon, Highlands & Islands Enterprise
Leonore Frame, Scottish Development International
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10/06/2015
Colette McBride
Scottish Enterprise
Best Practice Tendering
for Offshore Wind
Scottish Enterprise (SE)
Support
Colette McBride
Scottish Enterprise
9 June 2015
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10/06/2015
Government Commitment to Offshore Wind
Both the UK and Scottish Governments are committed to exploiting the
potential of offshore wind, which will help the UK to meet its binding
EU target to source 15% of all energy from renewables by 2020.
Offshore wind is an integral part of the Scottish Government’s plan to
transition Scotland to low carbon economy; it will be essential for
meeting Scotland’s ambitious targets to:
• Meet 30% of energy demand from renewables by 2020.
• Meet 100% of electricity demand from renewables by 2020.
• Reduce greenhouse gas emissions by 42% (from 1990 levels)
by 2020 and 80% by 2050.
• Achieve 50g CO2/kWh of electricity generation by 2030.
Strategic Approach
Scottish Enterprise is working with HIE and SDI
towards five strategic objectives for offshore wind:

Inward investment – Secure large scale offshore
wind manufacturing facility in Scotland.

Supply Chain - Support the development of the
domestic supply chain through internationalisation,
collaboration and diversification.

Port Infrastructure - Maximise the potential of
existing infrastructure and invest in new deep water
capacity.

R&D, Innovation and T&D - Provide support for
targeted R&D, innovation and test & demonstration
to secure the industry in Scotland.

Investment - Identify opportunities for financial
investment that will deliver economic impact in
Scotland.
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10/06/2015
Team Scotland Approach
Created in conjunction with offshore wind developers, industry, public sector
and other key stakeholders, the Scottish Government’s Scotland’s Offshore
Wind Route Map sets out the opportunities, challenges and the priorities for
action.
The Scottish Government, SE, HIE, SDI and other public sector bodies are
working with industry to:
•
•
•
•
•
•
Develop key infrastructure for manufacturing, assembly, installation and O&M.
Develop sites for onshore and offshore test & demonstration.
Facilitate investment in R&D, innovation and prototyping to drive technology
development and reduce project costs.
Identify the scale and nature of investment required and facilitating the
development of solutions.
Leverage applicable skills and best practice from the oil & gas sector.
Develop a globally competitive offshore wind supply chain through the growth
and diversification of indigenous companies and attraction of inward investors.
UK Context
Beatrice
664MW
Beatrice Demo
10MW
Moray Firth
Hywind
1116MW 30MW
EOWDC 100MW
Kincardine Firth of Forth 50MW
(Phase 1) 1050MW
Islay
690MW
Robin Rigg
180MW
Energy Park Fife 7MW
Firth of Forth (Phase 2 & 3) 2415MW
2B Energy Neart na
Test
Gaoithe
12MW 448MW
Inch Cape 784M
W
DECC forecasts 8-15GW of UK
offshore wind by 2020, with a 10GW
central scenario.
The UK currently has:

24 operational projects (4GW)

3 under construction (1GW)

7 with a CfD (4.3GW)

17 consented (11.8GW)

3 in planning (5.2GW)
Scotland currently has:

3 operational projects (197MW)

2 with a CfD (1.1GW)

4 consented (3GW)
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10/06/2015
Scotland’s Offshore Wind
Sites
Scotland currently has:

o
o
o

o
o

o
o
o
o

o
o
o
o
o
Beatrice
Hunterston
3 operational projects
E.ON - Robin Rigg
SSE / Talisman – Beatrice Demo
Samsung – Energy Park Fife Demo
2 projects with CfDs
SSE / RWE / CIP – Beatrice
Mainstream – Neart na Gaoithe
4 consented projects (3GW)
Repsol / EDPR – Inch Cape
EDPR / Repsol – Moray Firth
SSE / Fluor – Seagreen A&B
Vattenfall / AREG – EOWDC
5 proposed projects
SSE – Islay
SSE / Fluor – Seagreen C - G
Statoil – Hywind Scotland
Pilot – Kincardine
2B Energy – 2B Test Site
Robin Rigg
(Photos of existing Wind activities in Scotland)
Methil
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10/06/2015
Building the Supply Chain
SE provides a range of support designed to build Scottish offshore
wind supply chain:
•
•
•
•
•
•
•
Market Intelligence: www.offshorewindscotland.gov.uk
Supply Chain Workshops: Exploring opportunities and information in
the offshore wind supply chain
Meet the Buyer: Tailored events with leading and Developers and Tier
Ones.
Expert Support: Two days of one-to-one support to build
diversification strategies.
SMAS: Expert advice in the areas of process improvement, lean
manufacturing and innovation.
Proactive Engagement: Targeted engagement with Developers and
Tier 1 suppliers to understand their procurement strategies, timescales
and supply chain requirements.
England Based?: http://www.growoffshorewind.com/
Offshore Wind Supply Chain Directory
www.offshorewindscotland.org.uk
•
Created by SE, HIE, SG and
Scottish Renewables
•
Details hundreds of Scottish
companies
with
offshore
renewables capabilities
•
Enables Developers/Tier 1s to
search for specific capabilities
•
Provides
an
excellent
opportunity for supply chain
companies to promote their
company’s capability
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10/06/2015
Offshore Wind Expert Support Programme
•
•
•
•
•
•
•
•
•
Scotland-wide – up to 2 days’ one to one support from an Offshore Wind
specialist – 100% funded by SE
Market entry requirements
Appraising your company’s current capabilities (e.g. skills, processes)
and
your “fit” in relation to current and anticipated Offshore Wind
opportunities
Suitability of a specific product or service to the sector
Advice on market / supply chain positioning
Advice on supply chain contacts
Culminating in the production of a company specific action plan
Current Programme ends October 2015
“Drop In Surgeries” end August 2015 – Aberdeen, Inverness, Fife,
Glasgow and Edinburgh contact [email protected]
Thank You!
Colette McBride
Scottish Enterprise
60 Gresham Street
London
EC2V 7BB
0300 013 2803
07786 682275
[email protected]
www.scottish-enterprise.com
www.sdi.co.uk
www.offshorewindscotland.org.uk
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10/06/2015
Kateryna McKinnon
Highlands & Islands
Enterprise
OFFSHORE WIND SUPPORT
9th June 2015, Best Practice Tendering for Offshore Wind
Kateryna McKinnon
Highlands and Islands Enterprise
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10/06/2015
Highlands and Islands of Scotland
The region is home to – The world’s first deep water offshore project –
Talisman Beatrice Demonstrator
Key infrastructure sites, ports and harbours
Supply chain companies active in development, demonstration, construction, operation and maintenance of renewable energy technologies Support Services – Team Scotland
• Direct business support
• Programmes such as SMAS, Innovation, Leadership
development etc
• Infrastructure provision
• Offshore Wind Expert Support Programme
• Offshore Renewables Supply Chain Directory
• Meet the Buyer events
• Trade and Investment
• Finance
• Skills
• Communication – www.offshorewindscotland.org.uk
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Team Scotland
Offshore Wind Industry Group
GOVERNMENT
INDUSTRY
DEVELOPERS
SUPPLIERS
GOV.UK
Offshore Wind Route Map
Sets out the opportunities, challenges and the priority
recommendations for action to realise Scotland’s offshore
wind potential
Supply Chain
Communication
Innovation
FOCUS OVER THE NEXT 12‐24 MONTHS
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10/06/2015
OWIG – Supply Chain
Aim – to focus efforts on specific areas of the supply chain where
Scotland has comparative advantages and where key capability already
exists, in order to deliver real and tangible outputs to strengthen
Scotland’s supply chain offering in the offshore wind market.
Key actions over the next 12-24 months:
•
•
•
Identify key barriers for Scottish suppliers in terms of
competitiveness and attractiveness – through engagement with
developers and their key contractors
Facilitate collaboration between suppliers to strengthen the Scottish
supply chain offering (particularly in fabrication space)
Focus on developing key infrastructure hubs for construction and
O&M activity
OWIG – Supply Chain
Developer and Supplier Workshop – Tier One/Two level
To identify barriers for Scottish suppliers in terms of competitiveness
and attractiveness in the offshore wind market.
•
•
•
•
•
Open 1-2-1 feedback sessions between project developers and the
Scottish supply chain
To bottom out the reasons why and where the suppliers fall short on
being shortlisted to tender and / or ultimately fail to win contracts
To identify ways in which the suppliers can enhance their offer in
order to bid for contracts competitively
Select number of Tier One/Two suppliers (identified by the
developers)
Facilitated by SE/HIE staff in order to fully understand the barriers
to competitiveness that need addressed, and inform public sector
support
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THANK YOU!
Leonore Frame
Scottish Development
International
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10/06/2015
Global Support
•
43 offices in
21 countries
•
Local staff
working with
SE/HIE
•
Globalscot
network
“We stand on the brink worldwide
of a renewable energy revolution.”
Nicola Surgeon, First Minister
•
UK TI partner
in Scotland
www.sdi.co.uk
International ambitions
General Trade Support
Offshore Wind Specific Support
•
Talk to an Export Adviser and get tailored advice on market
opportunities and support on strategy planning, market entry,
logistics and payment advice.
•
•
Attend year-round workshops, forums and events for insight
into the best opportunities overseas for your business.
Offshore Wind Expert Support Programme
Take advantage of up to two full days of free, one-to-one
advice and guidance about diversifying your business for
the offshore wind sector.
•
•
Attend Trade Missions and Exhibitions with subsidised stand
space on Scottish Pavilions , speaker slots and tailored meeting
arrangements.
International Technology and Renewable Energy Zone
(ITREZ)
Bringing business and academia together by stimulating colocation, innovation, and investment in Scotland’s offshore
renewable energy sector.
•
Receive Financial support to hire an International Manager or a
consultant to conduct in-house training.
•
•
Fully serviced incubation offices overseas.
•
Receive up to £5,000 to develop or refine a product to export with
the Make it to Market Grant.
Offshore Wind Supply Chain Development
Identifying and match making service linking Scottish
suppliers, developers, and tier one customers in the UK
and
“We stand on the brink Overseas.
of a renewable energy •
Get access to bespoke market research reports as well as
experts worldwide and their knowledge, contacts and language
skills.
•
Partner identification, EU tender alerts and application support
through Scotland Europa, Enterprise Network Europe and the
Scottish EU Funding Portal.
•
revolution.”
Offshore Renewable
Supply Chain Directory and
Nicola Surgeon, First Minister
Scottish Capability
Statement
Profile your company on the Scottish directory and
capability statement.
www.sdi.co.uk
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10/06/2015
Call us
•
Find out more at: www.scottish-enterprise.com or www.hie.co.uk
•
Contact Scottish Enterprise by calling 0845 607 8787 or email
[email protected]
•
Contact Highlands and Islands Enterprise (HIE) by
calling 01463 234 171 or
“We stand on the brink of a renewable energy email [email protected]
revolution.”
Nicola Surgeon, First Minister
www.sdi.co.uk
Event Close
In association with
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