Solar facility construction milestone and payment claim review

Large scale solar construction projects are typically made up of dozens of milestones, outlined in the contract, which need to be met before payments can be made to the contractor.  There are normally at least three parties involved in the processing of these payment claims, and they can cumbersome things to navigate.  This post looks at what the typical milestones in a solar project are and what documentation is important.

But first, a step back. To defining the milestones:

Prior to financial close (where the necessary contracts are executed, and financing is secured) there will likely be a bit of backwards and forwards on what the key project milestones will be, and how much of the overall lump sum contract price will be allocated to each.  The milestone schedule, payment schedule, project programme and financial model are all built and developed in parallel, and changing one may have an impact on the others.  The contractor is interested in making sure that they have healthy cashflow throughout the project.  Procurement activities in particular require a heavy outlay of cash, so they will want to get paid for completed procurement works, which typically take place towards the front end of the programme.  The owner, and lenders, will want to make sure that they are receiving value for these payments, so they will be interested in making sure that the payment amount is fair, given what works have been completed.

Some of the typical milestones (and therefore payment triggers) include the following:

Notice to proceed

This is a mobilisation payment, often made to the contractor upon the award of the contract.  For instance 10% of the contract price.  The evidence required from the contractor is typically a letter from the owner to the contractor confirming that they have permission to go ahead with the works under the contract and that any conditions precedent to them starting works have been met, or waived as required.  It may be accompanied by other documentation showing that the contractor has done all the necessary preparation works, such as securing insurance, accessing bank guarantees, appointing certain key personnel etc.  The level of complexity in assessing this milestone is very much dependent on the contract requirements, but it should not be overly complicated.

Equipment procurement

This shows that the contractor has place the orders for the equipment.  The evidence for these type of milestones is typically in an executed (and often redacted) contract with the equipment supplier.  Additional requirements may include the supplier’s quality management plan, factory acceptance test schedule, delivery plan, and transportation, storage and handling, and installation and operations & maintenance guidelines.  Reviewers should be checking that the specifications of what has been procured matches the contract employer’s requirements.  The product warranties should also match the contract.  Delivery schedules should be in line with the project schedule.  Key components and equipment in a solar facility included as milestones are typically PV modules, structures/trackers and inverters.

Equipment delivery

This is to demonstrate that the equipment procured has been successfully delivered.  These milestones should be accompanied by a lot of documentation.  This can be one of the most onerous milestone types and it’s very important that the contractor has good controls in place to make this easy to review.  For each equipment type, there should be a summary report which links actual equipment to containers or batches.  For instance, PV modules will likely be manufactured in batches.  Each PV module has a serial number, and these serial numbers are grouped together into pallets.  Which are grouped together into containers, which are grouped together into batches.  Which cumulatively make up the entire facility.

There should be documentation and reporting which allows someone to trace each module from the manufacturing line all the way to its delivery to site.  A summary report should be maintained, identifying the position of each container (ex-works, on a ship, at port, on site etc) and a reviewer should be able to identify which containers have been delivered to site.  This summary report should be supported by a myriad of documentation, including packing lists, waybills/bills of lading, serial number lists and delivery notes.  In addition, there should be factory acceptance test reports and any independent factory inspection reports provided, and any applicable certificates from the manufacturer.  The reviewer’s role here is not to go through everything in minute detail, but to carry out spot checks to verify that the contractor’s report is accurate, and that they are implementing proper logistical and document control throughout the whole process.  Site inspections are then often carried out to verify that the equipment is being delivered in good order and that the contractor is complying with the handling and storage guidelines.  It can be a big job, and messy and confusing paperwork makes it a whole lot bigger.

Keeping track of millions of components requires a lot of competent people doing competent people things
Keeping track of millions of components requires a lot of competent people doing competent people things
Construction completion

There are a lot of construction activities that can be considered for payment milestones: mobilisation to site, the completion of the boundary fence, access roads, O&M buildings and substations.  But it’s typically the repetitive activities that get most of the attention, which in the case of solar are largely piling, tracker installation, module installation and inverter (or MV power station) installation.

What’s important here is what is understood by both parties to be a completed construction activity?  On any project there will be some punch list activities that need to be closed out, but what is considered to be reasonable? Does everyone agree?  For electrical equipment, is it enough that the unit is physically in place or should it be connected, with cables plugged in?

How is the facility divided up into sections?  Is a milestone linked to an individual section of the facility?  Or can the contractor claim for a percentage of works completed, regardless of where the works are taking place.  Keep in mind that the first wave of construction activities can be fairly quick to do, but coming back and resolving quality issues, and closing off punch list items can take longer.

Quality documentation is the most important here, and what is inlcuded in the overall payment claim should match the contractor’s progress report, which, in turn, should align with the quality documentation.  Inspection and test plans (ITPs) should be followed, and there should be inspection and test checks that are provided.  Observations during walkarounds on site should align with the contractor’s quality documentation.

Mechanical Completion is often a key construction milestone.  For this, all construction activities should be completed, quality documentation should be available, the punchlist should be manageable, and not affect the facility’s performance or safety, the facility should be ready for commissioning, and all the little construction activities that may not have been included as individual milestones (such as the security system) should be in and ready to be commissioned.

Commissioning

Commissioning milestones may be separated into cold commissioning (commissioning activities that can be carried out before the facility is connected to the grid) and hot commissioning (after grid connection).  It is common that the owner, owner’s representative, independent or lender’s engineer may witness selected commissioning activities, to confirm that the data provided match the observations on site, and to verify that the contractor is following the commissioning plan.  But commissioning milestones are often overshadowed or substituted for major completion milestones, such as practical completion or even commercial operation.  These major milestones are influenced and informed by performance tests and grid compliance tests.

A portion of the contract price, such as 5%, is normally held for these milestones, and the contractor needs to demonstrate the facility’s performance and compliance with the network service provider/regulator/purchaser’s requirements.  The nature of tests to be conducted and paperwork to be provided is determined by the local regulatory requirements.

They will also need to show that the facility is able to perform, by applying the performance ratio (or equivalent) tests outlined in the contract.  Performance data should be provided for review, along with the application of calculations as defined in the contract, and any underperformance may be subject to performance liquidated damages.


I have worked on projects with nearly one hundred milestones, and others with only a few dozen.  What matters most is whether they are clearly defined, and whether the parties have agreed upfront what constitutes the completion of an activity and what information and documentation is required.  I couldn’t overstate the importance of having a session or two right at the beginning of the construction phase to clarify expectations as early as possible.

The complex world of Japanese waste management

I recently got back from a two week holiday in Japan.  The first week was spent snowboarding up north and the second week was in the madness that is Tokyo.  In both, I encountered confusing, and strangely strict, recycling rules that were difficult to follow and seemed to change from region to region.

Ueno_park

In the house that a big group of us had rented at the snow, we were asked to separate our recycling into cans, bottles, food waste and other.  Simple enough.  Around the ski resort bins were separated into ‘combustible’ and ‘other’.  And then when we got down to Tokyo, we had four pages of instructions in the AirBnB welcome pack about what needs to be separated and how to do it.  Rubbish was collected on our street every day, but I couldn’t see any difference in the trucks driving around and they all seemed to lump rubbish bags together without any apparent distinction between bags.  Other than crates of cans and bottles that were loaded up separately.  Who knows where those crates came from.  It was incredibly confusing.

There are a lot of articles out there which go into the complicated nature of recycling in Japan in much more depth than I would be able to having been there for just one week.  I found this one interesting.

But it’s an important topic.  Because there are vending machines dotted (spray-painted) all around the streets of Tokyo.  Everything comes in plastic.  Individually wrapped goodies are ubiquitous, and when you buy a single plasticked thing, it gets placed in a plastic bag.  And having seen what I’ve seen in the Philippines, this was naturally a bit distressing.

The Rockefeller Foundation has two Japanese cities within its 100 Resilient Cities programme; Kyoto and Toyama.  I didn’t visit either, but the Toyama Resilience Strategy is probably reflective of other Japanese city priorities.  They celebrate their existing waste management practices, and point out that individuals take ownership of their role in keeping the city clean.  But from a municipal level they also discuss grander plans and highlight the importance of the development of the city’s waste to energy industry.   “With city incentives, seven different companies now turn “waste” into usable products at the EcoTown Industrial Park, started in 2002. An extensive waste recycling education center increases citizen awareness of the methods and importance of waste recycling.” [Source] . They also point out the importance of incorporating waste reduction and recycling principles into education programmes and messaging.

Layout of Toyama Eco-Town [Source: Toyama Resilience Strategy]
Layout of Toyama Eco-Town [Source: Toyama Resilience Strategy]
What they don’t seem to do is look at reducing the amount of waste generated in the first place.  It all seems to focus on waste management, recycling, combustion, landfill.  There doesn’t seem to be any emphasis on rethinking packaging of products in Japan.  Talking to manufacturers.  Rethinking the need for wrapping up Pocky chocolate sticks (yum) into two separate packets within one single box.

We felt plastic sick by the time we got home.  And considering how much work each individual is expected to do in their day to day household recycling, and the social pressure that seems to be experienced at this domestic level, it’s not clear if any of that pressure is being directed upwards.  Both at the regulators and at the suppliers.

Asia has a lot to answer for with plastic consumption.  And Japan has enough resources to find a suitable response.

The tricky nature of design and construction overlap in solar projects

Design

Solar PV facilities have ever increasing pressure on construction timelines.  In theory they are fairly simple design and construct projects, and one of the major benefits of these facilities is that they can come online in a relatively short space of time, and start generating revenue quickly.

So standard processes and procedures used within the engineering sector may be put under increasing pressure, in order to realise an early commercial operation date.

In an ideal world, the facility design is carried out upfront.  Site investigations are conducted, studies are done, calculations are calculated and all of these feed into the design process.  Design docs are developed, and bundled up into neat and ordered packages, which are handed over to the owner for review and comment.  Once everyone has had their turn to check that the design is in good order, and fully compliant with standards and specs, equipment is procured, and construction management documentation, such as work method statements, are developed.  Controlled.  Organised.  And compliant.

The reality of these projects is vastly different.  Certain things are known from contract negotiation – which modules, mounting system and inverters will be used, what is the overall facility capacity, where are the roads going to be located.  Designs will also be nicked from previous projects, to save time and cost, altered and amended based on local conditions.  Everyone will be watching the procurement of long-lead items with a keen eye along with any other activity under the project’s critical path.

So it’s likely that the design will be put together in clumps and blobs.  Loosely bundled documents, with vague references to geotechnical reports and flood studies, will come through in a piecemeal fashion.  Often before it’s been reviewed internally by the contractor.  There is enormous pressure on the Owner to carry out their reviews and issue comments with no delay, as everyone’s watching the clock.  But this way of submitting documentation is onerous on an owner’s engineer.  It’s difficult to plan and allocate resources when you’re not sure when documents are going to come through.  It can be hard to keep the same people on the job, which means more time spent by your engineers getting up to speed with the contract specs.  And it can mean multiple iterations of your log of comments.  It chaotic, pressured and not a whole lot of fun.

So some things that are important:

  • When documents come through, the contractor should highlight any specific aspects of the design which may have an impact on the overall project schedule.  For instance, tracker system design, which needs to be reviewed against local standards may be important as equipment needs to be ordered.
  • The document register becomes an incredibly important tool.  It should be tracking what the latest version of the document is, what the changes were in this revision, when it was issued and what the current status is (issued for review, approval, construction etc)
  • Document control in general becomes incredibly important.
  • The document management system should be easy to use.  If you need to go into the system to download small bundles of documents frequently, then it needs to be easy to navigate and docs need to be easy to download.  Access should be easy to secure, so that people on the design review team can search for documents themselves.
  • Transmittals should include a list of documents included, along with the location of the document on the document management system, or direct links to the documents.
  • Construction documentation, such as inspection and test plans and work method statements, should be developed in parallel, so that when the design is agreed, the ITPs and WMSs are ready, and there is no delay to construction.
  • For very time constrained reviews, it may be appropriate to focus solely on the observations of non-compliance with either local standards or the contract specs.  Design preferences may need to be dropped.  This is for the owner to decide.  They are paying for the product and it is ultimately their decision as to whether they are going for a gold standard project, or a project that finishes on time.
  • The contract should transfer all design risk to the contractor.  If the owner comes across any non-compliance at any point, the contractor should be required to fix it.  Increased pressure on the design phase should not relieve the contractor of their obligations to deliver a compliant project.
  • The contractor should be fully in control of construction quality.  So that the owner can see that the facility is being built to spec, and that accelerated works have not resulted in a poor quality product.

It’s difficult.  There are competing pressures, multiple activities taking place at the same time, and all parties may have limited resources at their disposal.

Back in the business – the Australian energy business

GDay

I am coming up for air after a crazy and intense year of maternity leave.  Thanks to all who have kept in touch and apologies to those who were expecting the newsletters to continue.

My big news is that four months ago I started working for an engineering firm in Melbourne, in their renewable energy team.  I am back in the world of consulting, working as technical advisor on a number of solar projects around Australia.  It’s very similar to the work I was doing back in South Africa so it’s familiar ground.

This market is booming at the moment, and there are a lot of little interesting topics floating around that could use a bit of discussion.  What’s of clear interest to me is the number of South Africans moving over here with experience in renewables.  The slow down of the REIPPP programme in SA has had many people looking further afield for work.  Not including myself I can think of five people who were consulting in Cape Town while I was there, who are now based in Australia.  And that’s just within consulting.  There will be a whole heap more working for the other project players.

I’m slowly getting my head around the grid connection space.  It’s complicated, with uncertainties that seem to be driving developers around the bend.  Marginal and Distributed Loss Factors deserve their own youtube channel, and the Generator Performance Standards are tying people in knots.

Each state has its own planning rules.  The country is enormous with long tentacled electrical infrastructure.  The politics is political and the leaders love to leave.

It’s a big mish mash and a bit wishy washy.  And it’s a lot to get your head around.

So watch this space.  Perhaps all that I can promise is that you learn along the way with me.

Melaka – one of Rockefeller’s 100 Resilient Cities

In August 2016 we left Singapore by bus and landed in Johor Bahru, a city that seems to exist solely for the purpose of supplying Singapore with goods by truck.  We spent one night there before heading to Melaka (also sometimes referred to as Malacca.)  Here we found a small city rich in history, diversity, personality, beauty and with a lot of character.

Part of its history is that it was under Dutch occupation or control for a long time, and there is evidence of this throughout the city.  In the architecture and the way things are named (like the Stadthuys or city hall in the middle of town.)   I found myself wondering if this is the part of the world that so many Cape Malay people in South Africa can trace their heritage back to.  And it turns out that there were slaves sent from Melaka to Cape Town.  I found the experience that much more personal to think on it; that there was such a distant and yet very real link between this city that I had stumbled upon, and my home town.

melaka_10

The 100 Resilient Cities initiative lists the following as Melaka’s resilience challenges:

  • Coastal flooding
  • Cyber attack
  • Declining or ageing population
  • Disease outbreak
  • Landslide
  • Overtaxed/ under developed/unreliable transportation system
  • Poor air quality/pollution
  • Rainfall flooding
  • Rising sea level and coastal erosion

Coastal flooding/Rising sea level and coastal erosion/Rainfall flooding

These concerns are easy to understand.  The city is centred around the Melaka river, which winds its way around the city and flows out to the ocean.  It flows right through the heart of the touristy section of the city, and buildings and infrastructure are built right up to the water’s edge.

There is clearly a lot of history connected to the river.  A beautiful water wheel, ship exhibition, and tourist attractions and activities are set up around the river.  It is therefore not hard to imagine that the city is vulnerable to the effects of flood and sea level rise.

melaka_1 melaka_2 melaka_3 melaka_4melaka_11 melaka_5

Overtaxed/ under developed/unreliable transportation system

We stayed in the city centre.  We had arrived by bus from Johor Bahru and had used a bus to get from the main bus terminal to the hotel where we were staying.  This worked well and was very cheap.  But that is as far as our experience of the public transportation system went.  For the rest of our time, we walked around the city.  We didn’t brave the brightly coloured and adorned tourist tricycles.  But it’s not hard to imagine that the transport system is stretched and stressed.

melaka_7melaka_6melaka_8 melaka_9

Disease outbreak

I’m not really sure what diseases they are referring to with this, but this was one of my favourite signs in Melaka.  My guess is that they’re more worried about non-STD related diseases, but still, play safe folks.

Melaka

Bangkok – one of Rockefeller’s 100 Resilient Cities

Bangkok is an incredible monster of a city.  We spent ten days there at the beginning of 2016 and saw a tiny fraction of it.  A friend of ours was staying in an apartment block where the roof was accessible on the 45th floor, with panoramic views of the city.  It goes on and on and on.  High rises as far as you can see.  Shining lights, the constant buzz of traffic.

bangkok_night_er

bangkok_night_er_1

The 100 Resilient Cities initiative describes Bangkok’s resilience pictures as the following:

“In addition to a bustling tourism industry, Thailand’s capital city is home to 10 million residents within 1,500 square kilometres. Nearly half the population comes from other provinces and countries, seeking better opportunities, and many are considered poor and vulnerable. In 2011, Bangkok experienced a severe flood with estimated damages of $45 billion to global supply chain, out of which only $10 billion were insured. This sparked the development of a manual for flood management that includes lessons for resilience building. However, technical expertise and financial resources for creating and executing resilience strategies remain limited.

Resilience Challenges:

  • Ageing infrastructure
  • Coastal flooding
  • Drought
  • Overtaxed/ under developed/unreliable transportation system
  • Pollution or environmental degradation
  • Poor transportation system
  • Rainfall flooding
  • Riot or civil unrest”

Sounds like a lot of cities.  Here is what I found, in my short stay there.

Ageing infrastructure:

The smell of Bangkok is not for the faint of heart or nose.  On one particularly smelly day, we walked over a stormwater drainage line and it smelled like an open sewer.  There are a number of channels running through the city and they also smell.  I’m not sure if this is linked to the age of the infrastructure, but it seemed to me that the city was not adequately equipped to manage its wastewater or its stormwater.  There is water all around and through Bangkok.  It is not hard to imagine that flooding can happen quickly and that its impact could be quite severe.

bangkok_channel_er

As with a number of Asian cities, the electrical and communications infrastructure looks like a real challenge.  A bird’s nest or spider’s web of cables.

Thailand is not poor though.  There was a stark contrast between Bangkok and the cities in Vietnam and the Philippines that we had just been in.  We experienced one power outage while I was there, but that appeared to be from maintenance work on the local grid.  Not from capacity issues.
bangkok_elec_er

Transportation

We stayed in Chit Lom.  It’s an easy, if a bit long, train journey from the airport into the city centre.  Our apartment was within easy walking distance to the train station, and the elevated walkways that link one shopping centre with another (shopping is not taken lightly in Bangkok…)  On one particularly touristy day, we took the train to the water’s edge, and then caught a boat to one of the temples.  That was my experience of Bangkok’s public transport.  Fast, regular, air-conditioned and predictable trains, and boats.

 

bangkok_skytrain_mrt_routemap

On one day we tried to take a taxi from Chit Lom to a neighbouring suburb, but the driver turned us away, and recommended taking the train as it would be faster.  On another day we took a taxi to their secondary airport, to go to Chang Mai, and we crawled through the traffic.  From this one taxi ride, and from our walking around the city, it’s clear that traffic is an issue.  I am not sure what the public transport system is like once you are out of the city centre.  There are a number of bus routes operating, some of which run all night but the city is enormous, with millions of people needing to move around every day, all day.

So when 100RC lists poor transportation as a challenge, I can understand why.  The train system is set up for people to move from the airport to major hubs easily.  It can’t possibly handle 10 million people. It’s monstrous infrastructure running through the city.  It can’t have been easy or cheap to build, and any expansion to it must be a gigantic undertaking.  The city is hot, and it’s not easy or comfortable to walk around.

The city is hot, and it’s not easy or comfortable to walk around.

Skytrain
Taxis, cars, trains, buses and tuk-tuks. Bangkok has it all.

bangkok_trains_er

Bangkok_waterway_ER_1

Pollution/environmental degradation

Plastic is the tragedy of Asian cities (with Singapore the major exclusion – possibly Seoul too, but I’m yet to go there).  It’s everywhere and it’s heartbreaking.  No stretch of road, or expanse of water, is free from it.

Bangkok_waterway_ER_2

The air quality was also not great.  Our friends who live there have commented that at times they have to stay indoors because the air quality is too bad to be outside, particularly as they have a young child.

The SkyTrain is built above roadways, and this infrastructure naturally traps vehicle exhaust fumes.  I was four months pregnant while we were there and it made me feel quite conscious of what air I was breathing in.

Riot/Civil unrest

This was not our first time in Bangkok.  We spent a day there in December 2013.  It was around the time of civil riots in the city, and we were quite conscious of this as we made our plans for the day.  In August 2015, the Erwaran Shrine, located within the city centre, and a short ten-minute walk from where we were staying in Chit Lom in 2016, was bombed.

Then in October 2016 the national monarch, King Bhumibol Adulyadej, died at the age of 88, after reigning for 70 years.  This has led to more concerns regarding civil unrest in the country.

For all of these threats and the knowledge in the back of our minds that the country, and therefore its capital, was experiencing this discontent, we never came face to face with it.  We were conscious while we were there that it’s recommended that tourists avoid talking about the king, the military junta or politics in general with local Thai people.  It’s difficult to get a sense of what local people are struggling with, or living with if you aren’t really able to talk to them about it openly.  That says a lot itself I suppose.

bangkok_golf_er

Other experiences

While we were in the Philippines I saw a sign which broke my heart a little bit.  It was in a public lavatory, and said something to the effect of ‘Our children are precious, please protect them’ and made reference to child trafficking.  I was reminded of that sign when walking around Bangkok.  Old white males sitting at tables being served by young, beautiful Thai women or men dressed as women.  Viagra (or a cheap knock-off) for sale by street vendors.  The sex industry seems to be alive and well in Bangkok.

It’s hard to see this and not feel that local Thai people are being exploited by wealthy westerners.  Surely this has an impact on a place’s resilience?  If your people are objectified and targeted by a certain demographic of tourist, it must have a knock-on effect.

Rockefeller’s 100 Resilient Cities – a personal journey

Last week I went to a talk hosted by Melbourne Conversations and the Resilient Melbourne Initiative.  The president of Rockefeller Foundation’s 100 Resilient Cities (100RC) programme was the main speaker, and it led to an interesting discussion on the challenges that Melbourne is facing.

I was involved in the development of the Cities Resilience Index (CRI) when I was in Cape Town and I’ve written a bit about this before.  The CRI is a tool that can be used to assess a city’s resilience, and help to highlight where they may be vulnerable, and it was a project that was running in parallel to the 100RC programme.  So this is close to my heart.

Melbourne in all its sunny glory
Melbourne in all its sunny wintery glory

It became even more personal this morning when I had a look through the 100RCs and realised that I had been to 15 of them.  So over the next while I will be casting my mind back to these 15 cities, talking about my experience (where I can remember them) and what kind of resilience priorities these cities have.

Once this is done, perhaps I will carry on, and look at some of the cities I haven’t yet been to.  Maybe starting with cities where those close to me have travelled.

So far, my travels have taken me to these cities looking to improve their resilience:

  1. Bangkok
  2. Barcelona
  3. Belgrade
  4. Cape Town (yay)
  5. Da Nang
  6. Durban
  7. London
  8. Melaka
  9. Melbourne
  10. Montreal
  11. New York City
  12. Singapore
  13. Sydney
  14. Thessaloniki
  15. Toronto

You can see the full list of cities here.

What could possibly go wrong on a Solar PV project during construction? – Part 3

This post is the last (for now at least) in a three part series looking at some of the things that can go wrong during the construction of a solar PV facility. Part 1 of this topic looked at design, programme, labour and environmental conditions that could impact construction.  Part 2 focused on the importance of effective onsite management, including quality control, equipment management, housekeeping and safety.

External conditions/events

“The best laid plans of mice and men often go awry.”  No matter how carefully planned out a project is, progress will always be at the mercy of external events, outside the control of project teams.  Some events are possible to predict, and contingency plans, or mitigating plans can be created.  Other events come out of the blue, are totally unforeseen.

The contractor should be responsible for completing the project to the extent that they are able to control, or perhaps even influence, what is taking place.  But contracts will have ‘force majeure’ clauses included, to address what happens if something happens which is totally outside of the contractor’s control.

Regardless of who is responsible, works need to get back on track, and repair works or accelerated catch-up works may be required.

Weather conditions, like floods, heavy winds, lightning and hail, can lead to facility and equipment damage.  Material or equipment supply chain hold ups or shortages may occur (by way of example, a project that I worked on had their steel supplier’s factory burn down).  Permission to connect to the electrical grid can be delayed, through no fault of the contractor or employer.  Third party works may need to take place (for instance transmission lines, substations or access roads).  Third party inspections and/or approvals may be required.

Storm water management/drainage

This is closely linked to external events – as heavy rain is clearly a weather event.  And it is linked to the appropriateness of the design (which is discussed in Part 1.  But it’s important enough to merit its own mention.  Solar facilities are covered with impermeable, smooth, titled panels.  They act like a roof, without a gutter.  Rain runs off them easily, and, over time, this leaves little grooves in the ground beneath the bottom edge.  This water accumulates and then runs downhill.  Depending on the ground type (permeability), the facility slope and the amount of rain received, stormwater management can become an issue.  Moving water can erode away at ground, roads and earth surrounding the mounting structure base.  This is clearly an issue over the life of the plant, but the management of stormwater can also be a problem during construction if water rushes into trenches, washes away civil works, or affects other aspects of work.

It’s therefore important that the contractor is aware of rainfall patterns, and considers how stormwater will behave onsite.  Plans should be in place to manage the water, and drainage designs should consider protecting the facility both during construction, and over its operational life.

Access road degradation

For any equipment, people or materials to reach the site, it is naturally important that the facility can be accessed.  There is typically a portion of road, of varying length, linking public roads to the facility’s boundary.  It’s important that the responsibility for building and maintaining this road is clearly defined.  But regardless of who is responsible, this road will take quite a beating over the course of construction.  Trucks carrying modules, mounting structures, inverters, switchgear, concrete, and other components and materials will be travelling backwards and forwards for months.

If the road isn’t built properly, it will end up being heavily corrugated and can turn into a swamp with heavy rains.  This then affects the delivery of components and materials, and the accessibility of the site for people working there.  Because it’s outside of the site boundary, it can be overlooked, but can result in a logistical nightmare if it’s not built properly.

Connection quality

A problem for a number of projects in South Africa was in the power quality at the point of export.  Different countries have different connection requirements, which will be set out in the relevant codes, regulations and standards.  Equipment may be brought in from other countries, and designs carried out by foreign engineering professionals.  This can result in the facility not complying with the specified requirements.  Design adjustments, equipment tweaking or reprogramming and/or possible additional equipment may be required, and these may end up delaying the project.

It’s therefore clearly important that the designers are aware of local conditions and requirements, and design the facility appropriately.  Sufficient time for testing is also required, in case there are hiccups along the way.

Ground risk

The contract should define whether or not the contractor is liable for any sneaky surprises that may be lurking underground.  They will be develop their design according to the conditions that they have observed onsite.  The mounting structures, electrical equipment housing units and cable routing designs will all have been selected and developed accordingly.  If the actual conditions are different from than what was expected it can have an impact on the suitability of the design.  It’s therefore incredibly important that a thorough geotechnical assessment is carried out.

What could possibly go wrong on a Solar PV project during construction? – Part 2

Solar PV facilities should be fairly easy to build; the technology is not overly complicated, and the installation process should be a series of lego-like assembly.  So why does so much go wrong?  Part 1 of this topic looked at design, programme, labour and environmental conditions that could impact construction.  This post will look at the importance of effective onsite management.

Quality inspections / quality control

What should be included in the contractor’s contract is that all works are to be done to an acceptable level of quality, and that the contractor should be implementing a comprehensive quality assurance plan.  But PV facilities are made up of millions of components being installed, in addition to vast stretches of trenching being dug and filled, and other civil works taking place.  LV, MV and HV electrical works are on the go, and multiple teams are all working simultaneously, often within the same zone.  If the contractor doesn’t have their proverbial ducks in a row, construction works can be done sloppily, and without due care.

Step one is to ensure that before an activity begins the contractor makes sure that everyone has the right information.  Documentation control is incredibly important.  Have drawings and method statements been reviewed?  Is the document register updated?  Do all sub-contractors have the right plans?  Does everyone know what they’re supposed to do and how they’re supposed to do it?

If this important control is not in place, and people are working to the wrong plans or designs, trenches can go in the wrong place, concrete pours may need to be redone, modules may need to be removed and replaced, and so on.  An entire site can spiral into chaos if people don’t know what they’re meant to be doing.

But let’s assume that people have the right information.  There should then be detailed inspections and checks by the contractor’s quality team to make sure that the works delivered match the design.  Have cables been securely fastened?  Are bolts tightened?  Have all components been installed in accordance with the original equipment manufacturers’ requirements?  Are the pyranometers facing the right direction?

All of these tiny checks add up to two big important questions – is the facility safe to operate and can it operate as intended?

There should be a whole room full of files containing evidence of inspections.  Well, not quite, but the evidence should be there.  If the contractor isn’t recording their inspections and test results, it’s very difficult to be confident that they’re really in control of the facility’s overall quality.

If the employer is dissatisfied with the facility presented to them it can impact on whether milestone payments are made to the contractor, or whether the contractor can achieve practical completion (or whatever completion milestone is defined in the contract.)

This impacts on the project’s completion date, and if quality issues are not identified and then resolved, it can affect the facility’s operational efficiency and safety.  Not good.

Storage and handling of equipment

Some components, of the millions of components being used, will have requirements relating to the handling of equipment that could impact their warranties or how they perform in operation.  The importance of complying with these requirements cannot be overstated.

Equipment should be transported correctly, unloaded and then stored correctly.  It should be packaged suitably, and then, when the time comes to install it, it should be installed properly.  The facility design should ensure that the operational or environmental conditions will be within a range considered acceptable by the manufacturer.

If the contractor isn’t aware of these requirements, they won’t handle the equipment correctly and they run the risk of voiding warranties and affecting facility operation.  They also run the risk of damaging equipment so that replacements need to be ordered.  Some of the components on a PV site, especially made-to-order items, can have a very long lead time.

This can throw the project schedule off course.

General housekeeping

The condition of the site in general can be a good indicator of the contractor’s overall control of onsite activities.  Rubbish and litter lying around, concrete splatters, broken glass and piles of sand and rocks all provide an indication that small, but important, controls are not in place.  Inadequate housekeeping can also raise flags for the environmental officer or manager, who should be monitoring construction activities in accordance with the relevant environmental authorisation and/or environmental management plan.  Non-compliance with the EMP can result in onsite activities being stopped until the issue is corrected.

Safety

The contractor’s level of control of onsite activities will also have an impact on the safety of all persons working there.  There are multiple ways in which someone could really hurt themselves, or others.

  • PV modules sitting in the sun will be live.  Any person fiddling with the module, or with connectors, who may not know what they are doing could really injure themselves.
  • The same risk exists with other electrical equipment being used throughout the facility.
  • Heavy drilling and trenching machines may be operating and these naturally have the potential to injure someone quite seriously.
  • Anyone working near loud machinery should be wearing ear protection.
  • Fire is a concern on any PV facility.  Electrical fires or bush fires (particularly in drier climates) can occur.
  • Then there is a risk of other accidents happening.  People dropping equipment or material, or falling in holes, or misusing a tool, or even sunburn or heatstroke.

Injury or even death is a real risk, and it is up to the contractor to ensure that

  • safety considerations are emphasised during toolbox talks,
  • emergency procedures are in place and emergency equipment (like fire extinguishers) are available,
  • access controls are in place to prevent unauthorised persons from entering electrically active zones and
  • all workers are adequately trained before carrying out any activities.

There should be an appointed health and safety control officer, who is tasked with developing and implementing H&S procedures.  Any incidents or non-compliances should be taken seriously, and it’s important that safety is instilled within the site culture from the start of construction activities.

What could possibly go wrong on a Solar PV project during construction?

I gave a talk on EPC contracts at the All-Energy conference in Melbourne earlier this month.  The other speakers talked on the role of the lender’s independent engineer, the commercial & industrial solar PV sector and the transition from fossil fuels to renewables from an environmental management perspective.

One of the questions that was asked of us all right at the end was to do with large scale solar PV installations.  If solar PV facilities are effectively like large assemblies of lego pieces, what could possibly go wrong during construction?

It’s true, they should be fairly straight forward to construct, so why is it that some facilities are completed so much later than planned?

Design suitability

Solar PV facilities aren’t complicated to design for, but if the design is inappropriate, there are a myriad of issues that can result.  For example:

  • Overcomplicated mounting structures can be difficult to assemble, and may not handle slopes or undulations in the ground very well
  • Lightning may be more frequent and more severe than the electrical design allowed for
  • Geological conditions may make trenching and piling activities more difficult than expected
  • Electrical equipment selection may not comply with grid connection/code requirements

Programme of works – sequencing of activities

Constructing a PV facility means tracking and controlling the movement of millions of components, and managing the activity of hundreds of workers.  If the programme of works, or project schedule, is not well thought out, logical and comprehensive, the project risks onsite activities descending into chaos.

The project schedule should result in the efficient flow of components and equipment; be that the delivery of goods and machinery to site, the order and layout of any storage or laydown areas, and the timing of movement of components from storage to installation zones.

Installation activities should also be carried out efficiently, and in the right order.  Modules cannot be installed by the module installation teams if the mounting structure assembly teams have not completed their works.  If the mounting assembly teams are not working efficiently, the module installation teams will be sitting on their hands.  Modules (or other sensitive equipment) should not be installed if there are heavy duty civil works still to be done (like trenching) in the nearby areas.

Trenching activities can only be done if the trenching machines are available.  The availability of machinery becomes very important in sticking with the project programme.  And if there are lots of projects going on at the same time, in fairly remote areas, the availability of such equipment is not necessarily a given.

Labour management

Where is your contractor from?  Are they originally a foreign organisation who ran out of work in their home country so came to your shores seeking more opportunity?  And if so, have they hired local people to work on your project?

Each country, and indeed each region within each country, has its own labour environment, bringing its own set of issues and challenges.  If the contractor doesn’t have local capacity, they may not have a good understanding of what these issues and challenges are, or how to overcome disputes if they arise.

Strikes, go-slows or the downing of tools has an enormous impact on project execution, and the contractor needs to know how to find a resolution to labour issues as soon as possible.

Also, there may be expectations as to local working conditions, or assumptions around working practices that may not necessarily be written anywhere, but which the contractor may be expected to know.  The contractor could very well go through nasty culture shock on site, and throwing hands up in the air and stomping away from the workforce won’t really get things done.

Local knowledge and capacity is critical.

Compliance with environmental authorisations/management plan

Depending on the size of the facility, there is likely to be some form of environmental permit or authorisation, which is the result of an environmental impact assessment.  This permit may outline constraints that apply to the project (such as no-go areas around wetlands or areas of heritage significance) and it will likely require the project to have an environmental management plan that is implemented as the project progresses.

Compliance with the permit and the associated EMP is very important.  Non-compliance may result in delays, or perhaps even the withdrawal of granted permits.

Any new site findings can throw a real spanner in the project works.  Unearthing a burial site, for instance, can close down an entire section of a facility.

Watch this space – Part 2 coming soon.