Firms looking to enter the renewable energy sector must tread carefully, says DCT Renewable Energy Projects managing director Bill Shaw
Renewable energy projects currently represent one of the few significant growth opportunities for the civil engineering industry. Even though the prize is there, it will not be won easily.
Both contractors and the developing client base are on a steep learning curve. This is, after all, still a young industry. Renewable energy is a highly politicised industry.
There are major planning issues to address and the social, commercial and environmental impact of a given scheme is often the topic of fierce debate and, not infrequently, of a public inquiry.
“Both contractors and the developing client base are on a steep learning curve. This is, after all, still a young industry.”
Because of the nature of the development, many renewable energy schemes are managed with core skills in high-voltage industry rather than driven by construction-based project management.
During the early stages of a project, project management will be preoccupied with basic issues such as (for a wind farm) the prevailing wind patterns, environmental and community impacts, access to the National Grid and canvassing for high-level political support.
From a long-list of potential projects, the developer will produce a shortlist of the best commercial sites with the highest probability of consent. The developer has still to woo the relevant energy company to obtain a commercial agreement.
Any deal with the energy company will depend on the likely quality of the power supply from the proposed scheme which, in turn, is influenced by the equipment specified.
“Any deal with the energy company will depend on the likely quality of the power supply from the proposed scheme.”
All this involves a great deal of time and money but not until all these issues have been resolved can the developer mitigate the risks of the planning system. The stakes are huge, and much of the detail is set in stone before the construction team is appointed.
Consequently, instead of risks being identified and eliminated at the earliest opportunity, many risks may be built into the project prior to planning consent.
Planning consent, when granted, always comes with a set of conditions. Sometimes these conditions are so onerous as to threaten the viability of the scheme, even after all the preparatory work.
And while all this is going on, the project leaders are unlikely to have given much thought to the practicalities of the project’s realisation - in other words, its constructability.
“Contractors eager to tap into the burgeoning renewables market need to appreciate the processes required.”
If developers want to navigate their way to a successful outcome, they need to access the knowledge held by the construction specialists at the earliest opportunity.
By the same token, contractors eager to tap into the burgeoning renewables market need to appreciate the processes required to take a scheme from concept through to tender stage.
Those contractors who can develop an understanding of the sector will be well equipped to reconcile the many conflicting imperatives that emerge in the planning and execution of a renewable energy project. And they will be the contractors who win the lion’s share of the work.
- Bill Shaw is managing director of specialist civil engineering contractor DCT Renewable Energy Projects.