Risk & Contract Management

Transcription

1 OWE Europe 2016 construction & installation track Risk & Contract Management 22 Nov. 2016

2 Contents Company profile Risk and contract management for OWPs How we do it 2

3 Company profile

4 Introduction to Eneco Group Independent Dutch energy company Established in 1995 Roots in municipal utilities, (Rotterdam, The Hague, Dordrecht) 2.2 million clients in NL and Belgium employees Since 2007, committed to Sustainable energy for everyone 4

5 Eneco Group key figures Turnover (meur) 4,590 5,251 Net result

6 6

7 Offshore wind portfolio

8 Prinses Amalia Wind Park

9 Eneco Luchterduinen

10 Risk & contract management OWPs

11 OWP project development schedule DG 1 DG 2 DG 3 (FC) Contracting Location Lay-out & Yield Assess ment Environmental Impact Assessment Permitting Project Financing Execution Stakeholder Engagement Financial Modelling & Business Case review 11

12 > DG2 contracting approach EPCI(C) FIDIC yellow book-based Conditions of Contract multi -contracting? e.g. Eneco Luchterduinen Lot A: Wind turbines Lot B1: Wind turbine foundations Lot B2: Electrical infrastructure Lot C: Onshore Cable 12

13 Eneco Luchterduinen Van Oord: design, procurement and installation of foundations, IACs, OHVS and export cables; supply of WTG-installation vessel MHI Vestas Offshore: supply WTGs, installation and commissioning Joulz: land cable TenneT: grid connection 13

14 FIDIC yellow book Advantages from an owner s point of view Avoid expense of tailor-fit contract Limited number of clauses; standardized terms Contractors are well-equipped to gauge risks associated with contract Easy incorporation of Particular Conditions on top of General Conditions Clear hierarchy of contract documents Allows for back-to-back contracts 14 Typical structure A. Contract Agreement B. Particular Conditions C. General Conditions D. Employer s Requirements E. Schedules F. Contractor s Specifications

15 In the earlier days Fixed support level Developer s efforts focused on making sure you qualified for the support mechanism before it ran out or got abandoned. DEVEX risk Post award of support-mechanism, minimise Employer risks at FC. For LSTK offshore wind projects, risks have never been carried unconditionally by the Contractors. Over time, risks have become more known and understood; and more risks have become known. 15

16 Auction-based tenders in NL Race is for the lowest price / bid. Before any contracting can be done, you first have to win. To win, you have to quantify risks For Borssele I+II tender, Eneco participated in Blauwwind consortium. pre-agreements in place between future owner / operator and construction partner in consortium. We were not lowest bidder 16 Post-bid evaluation did not lead to different approach for Borssele III+IV Main risk evaluation showed: schedule risks, interface risks, quality risks all remain to be covered by party who is best capable of carrying it. Otherwise you will pay a premium, without reducing the risk.

17 Risk quantification ~200 risks Categorized into Risk Assesment Matrix (RAM) Each risk has o construction contingency budget impact value o construction schedule impact value Combined, this leads to a risk quantification The impact of the primary delay on e.g. end date of the project and pre-completion revenues can then be calculated Including knock-on effects 17

18 NL offshore wind typical risk categories Caps on liability Construction risk (supply, transport, installation) Decommissioning Defects post DNP Force majeure Grid connection Interest rate/ debt Long-term power prices / floor price O&M contract duration Permit risk /change of law PPA Soil conditions Weather Yield 18

19 IMPACT Risk Assessment Matrix PROBABILITY 0-5% 5-20% 20-50% 50-80% % Construction Capex Operating costs (O&M, interest, tax) Revenue (yield) Construction schedule Finance (pre-fc impacts) 1 (VL) 2 (L) 3 (M) 4 (H) 5 (VH) More than XX MEUR Capex More than XX MEUR/yr Opex More than XX MEUR/yr Revenue More than XX months of construction schedule impact More than XX percentage points IRR change 5 (VH) CRITICAL XX MEUR Capex XX MEUR/yr Opex XX MEUR/yr Revenue XX months of construction schedule impact XX percentage points IRR change 4 (H) SEVERE XX MEUR Capex XX MEUR/yr Opex XX MEUR/yr Revenue Between XX weeks and XX months of construction schedule impact XX percentage points IRR change 3 (M) MATERIAL XX MEUR Capex XX MEUR/yr Opex XX MEUR/yr Revenue XX weeks of construction schedule impact XX percentage points IRR change 2 (L) SMALL 19 Less than XX Less than XX Less than XX Less than XX MEUR weeks of Less than XX Capex MEUR/yr Opex MEUR/yr Revenue construction percentage points 1 (VL) IRR change schedule impact

20