SELECTING A BOP CONTRACTOREvelyn C. Carpenter, PE, Co-founder and President

SOLAS Energy Consulting provides consulting services for renewable energy solutions and climate change.  Our expertise spans project development,

business development, sustainable development and climate change policy analysis. 

Fort Collins, Colorado, USA Calgary, Alberta, Canada

Renewable Energy – Project and Business Development – Climate Change

SOLAS ENERGY CONSULTING TEAM

Evelyn Carpenter, PE, MBA, PresidentYears of Experience: 21 yearsTechnical Fields of Competence: Renewable Energy· Project risk assessment· Commercial agreement negotiation· Technology procurement, planning, budgeting and project

due diligence· Negotiation and administration of power purchase and

equity/acquisition agreements· Warranty and maintenance agreements· Transportation contracts· Engineering and construction agreements

Paula McGarrigle, PE, MBA, Managing DirectorYears of Experience: 22 yearsTechnical Fields of Expertise: Renewable Energy· Small- and Large-scale wind prospecting, planning

and development· Equipment procurement· Project management from planning through

construction, operations, and maintenance· Business Development and Market Assessments· Acquisitions, divestitures, joint venture, financial and

technical due diligence· Climate Change Advisory· Advisory services in the areas of policy development,

compliance requirements, and alternatives· Alternative markets for green products

NBNB

Where to find some of our projects:

PROJECT EXPERIENCE

Break down of Services by MW CapacityFinders Services 2,204 Market Assessment 7,442 Preliminary Acquisition Review 11,047 Fatal Flaw Analysis 3,869 Due Diligence 2,999 Commercial Advisory 2,087

EPC RFP Management 1,715 Offtake 244 TSA 1,320

EPC RFP Management

Solar – 300 MWWind – 1,415 MW

NEXT, TELL ME ABOUT YOU!Name?

Company?

You gave up time with family, friends, or your favorite pet to listen to this topic, so what is the single most important thing you want to get out of this?

WHERE DO WE START???

OK, so now we have a real project….

Turbine Supply Agreement (TSA)

SIMPLEST, LOWEST RISK DEVELOPER CONTRACTING STRUCTURE

TWO EXECUTION CONTRACTSEngineering, Procurement, Construction (EPC or BOP)

Turbine Vendor and OwnerTurbine Manufacture (sub-component assembly)

Turbine deliveryWarranties

◦Fit for purpose, parts, and labor◦May include in-and-out◦Typically 95% power curve◦95-97% availability◦Manufacture performs

maintenance and service during warranty

Separate O&M Agreement and/or Warranty Agreement

Owner and BOP ContractorBOP Warranty 1-2 yearsAll equipment (not turbines)Facility design, turbine

receiving and erectionAll BOP construction

including substation and t-line

Turn Key (LSTK) Fixed price, T&M,

Guaranteed Maximum Price

Nah, too easy. Let’s see how much money we can save and contract it some other way…

“I want frickin' sharks with frickin' laser beams

attached to their frickin' heads”

– Dr. Evil

Let’s be our own General Contractor!•TSA•Padmount transformer supply•Substation Transformer Supply•Full engineering, Civil, Collection,

Erection, (Foundations/Geotech)•Substation install•Procure main sub equipment•T-Line materials•T-Line Install•WTG Transportation Agreement•O&M Building Design/Install•…and manage the site!!!

Photo: Milford Wind Corridor, 203.5MW

The Overly Complicated,Difficult-to-do, Theoretically Cheaper (but only if you are perfect), Contracting Structure

TOO COMPLEX!!!***++

Too Complex????

***For the average developer++ Plus, hard to finance

Questions to ask that can cost you big bucks

BOP/TSA Interface Points

Lifting LugsIf project can’t receive WTGS,

where do they go and who pays?How is demurrage handled?What does the manufacturer provide? (slings, rigging, lugs, extra bolts?)

How are shortages handled?How is pre-commissioning handled and whose scope?

Project energization plan?Project turnover plan including training?

Important Commercial Terms

BOP/TSA INTERFACE POINTS

Nacelle RiggingRisk of Loss

◦When do you take risk of loss?

◦How do you cover it?

Insurance◦Construction All Risk/Builder’s All Risk Rigger’s Liability?

◦Contractor GL◦Marine DSU◦Storage Endorsements◦Operational Insurance◦Business Interruption

The three pillars of project execution

SCOPE

SCHEDULEPRICE

SO…HOW DO WE PICK A CONTRACTOR?

IT’S ALMOST LIKE DATING…

TVIG, Inc.

Reed & Reed, Inc.

Both Parties have needs… Step 1 – Identify where you are, what you need

and what you have to give◦ Why should they spend $30-50k to give you pricing?

Step 2 – Identify who can give it to you◦ Contractor qualifications process

Written questionnaire Research/validation

◦ Contractors discussions Gain interest in project Show feasibility

Step 3 – Conduct the RFP ◦ Finalize the Bid List – large enough but small enough◦ Write the package – rationally and completely◦ Manage it – fairly and consistently◦ Evaluate it – without prejudice and methodically

BREAKOUT GROUPS5-10 MINUTES

Team A

You are the Contractor. How are you evaluating this Developer?

Team B

You are the Developer. What are your criteria and qualifications required for developing a bid list?

Contractor’s Perspective GO

◦ Major agreements – PPA, TSA, LGIA?◦ Land all secured?◦ Permits secured?◦ How are they paying for it and guaranteeing their

performance? GET

◦ How many bidders?◦ What is relationship with client?◦ What is our positioning in the market?

DESIRE◦ Is this a strategic play? (Future business?)◦ Do we need this job/do we want this job?◦ Is the developer rational in contract terms?◦ How busy are we and does it fit into the resource

allocation?

Developer’s Perspective◦ Labor profile (union/non-union/local/MBE requirements?)

◦ Technical Experience Specific turbine? Utility experience? Design capabilities – Electrical, SCADA?

◦ Relevant Geographic experience State/local workforce Permitting jurisdictions

◦ Execution Capabilities Demonstrated experience at this project size? Safety record, QA/QC, reporting, scheduling Self perform/Partnering/Subcontractor strategy Proposed execution team

◦ Commercial Capabilities How will they secure their obligations? Will they take the appropriate contract risk? Claims, insurance, warranties

ANY QUESTIONS?Thank you for your attention!

Paula McGarrigle, Managing DirectorSOLAS Energy Consulting Inc.Suite #1192137 - 33 Avenue, Southwest Calgary, Alberta T2T 1Z7 CANADATelephone: 403 454-9463E: pmcgarrigle@solasenergyconsulting.com

Evelyn Carpenter, PresidentSOLAS Energy Consulting US Inc.#3601001A East Harmony RoadFort Collins, Colorado 80525-3354Telephone: 501 438-9463 E: ecarpenter@solasenergyconsulting.com

With experience in renewable energy and climate change since the late l990s, you can be assured SOLAS has the depth and perspectiveto help your business navigate the many issues associated with Climate Change policy andproject development.

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