Procurement structures

As the industry matures, ways of procuring and managing the wide range of high value contracts required in delivering an offshore wind farm evolves. Choices depend on the capability and financial strength of the project developer and supply chain and the method of financing the project. Two key variants are explored below.

Multi-contracting

What is it?

  • Typically about nine main contracts are awarded covering the key elements of the wind farm
  • Supply and install packages are often awarded to different companies
  • Some packages can be split or combined depending on developer needs and supply chain capabilities

Who uses it?

  • The most experienced developers including E.ON, Equinor, Innogy, ├śrsted, ScottishPower and Vattenfall tend to multi-contract, particularly if the project is balance sheet funded
  • They invest in the technical / management skills internally as they prefer to take risk rather than pay EPCI contractors to take it

Pros and cons

+ Offers chance of lowest outturn cost

+ Gives owner most understanding and control of their assets and the chance to best optimise

- Requires larger in-house technical and management teams

- Higher financial risk, depending on details of contracting

 

EPCI