DOE OFFICE OF INDIAN ENERGY
Step 4: Project Implementation
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2
1Potential
3Refinement
5Operations & Maintenance
2Options
4Implementation
4Implementation
Potential Options Refinement ImplementationOperations
& Maintenanc
e
Step 4: Implementation
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Purpose: Contract for, realize physical construction of project
Tasks:• Finalize project agreements • Finalize vendor contracting process • Finalize preconstruction tasks• Realize construction and equipment installation• Realize interconnection • Realize project commissioning leading to commercial
operations
Output: Completed project (operation)
Step 4: Implementation
1. Financial closing (if applicable)2. Contract execution3. Construction of project
Contract oversight/quality control Change control
4. Commissioning Testing and verificationInterconnection verification (utility)
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Variable effort relative to project scale
1. Financial Closing (if applicable)
The process of completing all project-related financial transactions, finalizing and closing the project financial accounts, disposing of project assets, and releasing the work site.
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A few key steps:• Establish and communicate final date for all financial
transactions and account closings well before closing
• Verify all items from the Statement of Work have been completed before disbursing final payments
• Collect all financial records and verify all financial obligations have been satisfied
• Close all financial accounts• Transfer or dispose of assets according to the
acquisition plan
2. Contract Execution
• Verify contract documentation• Obtain contract approvals• Book the contract• Transfer project responsibility to
project manager
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3. Construction of Project
• Project developer orders equipment and begins construction or installation
• Construction manager coordinates work of various trades
• Close coordination with tenants if building is occupied
• Frequent communication between all parties to minimize possible issues
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4. Commissioning
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Planning
• Determine objectives and strategies• Assemble project team• Compile and review building and equipment documentation
Investigati
on
• Conduct site assessment• Develop functional test and monitoring plans• Analyze test results• Compile master list of deficiencies and recommend improvements
Implementation
• Accepted recommendations are put in place• Repairs and improvements• Retesting and re-monitoring• Fine-tuning
Hand-off and
Integratio
n
• Final documentation of commissioning effort is presented• Develop and present plan for future commissioning efforts including
recommended procedures for specific equipment, frequency of testing, analysis of results, periodic reporting, key players, and budget requirements
Potential Options Refinement ImplementationOperations
& Maintenanc
e
Step 4: Hypothetical Community Example – Outputs
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Photo from Byers and Renier Construction, NREL 18221
Completed and operating project New ownership organization completed (if needed)
Project Implementation
Success
• Project generating electricity
• Project developed within budget
Project Risk – Facility-Scale Post Step 4
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Risks Risk Assessment Post Step 4
Development
Loss/waste of development resourcesMedium; now with more assurance of success
Site
Improper orientation or project affected by shade
Low; some may be assumed by host
Inadequate foundation or structural integrity Low; developer assessed
Site control for challenges for safety/security purposes
Low; some assumed by host
PermittingTribe-adopted codes and permitting challenges
Low; permitting completed
Utility interconnection challenges None
FinanceCapital constraints None; project constructed/commissioned
Incentive unavailability or insufficiency Low to none; allocated to developer
Construction/Completion
Engineering, procurement, and construction difficulties
None; EPC complete
Cost overruns None; construction complete
Schedule overruns None; construction complete
Operating Output shortfall from expected Low; allocated to owner
Technology O&M failure Low; allocated to owner or O&M contractor
Sources: Adapted from Holland & Hart, RE Project Development & Finance & Infocast, Advanced RE Project Finance & Analysis
NOTE: Underlining signifies that the risk assessment outcome changes during the step at hand.
Project Risk – Community-Scale Post Step 4
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Risks Risk Assessment Post Step 4
Development
• Poor or no renewable energy resource assessment
• Not identifying all possible costs
• Unrealistic estimation of all costs
• Incorrect estimation of long-term “community” energy use
• Utility rules and ability to offset use with centralized production
Low; site picked Low; detailed model Low; detailed model Low; final projection
None; executed
Site• Structural (e.g. rooftop solar, wind loading, soil conditions)
• Installation safety (e.g., wind tower, hazard for adjacent sites)
• Site control for safety/security purposes
None; addressed None; addressed Low; site secure
Permitting• Tribe-adopted codes and permitting requirements
• Utility interconnection requirements
Low; complete None; complete
Finance• Capital availability
• Incentive availability risk
None; finalized
None ; finalized
Construction/Completion
• EPC difficulties
• Cost overruns
• Schedule
None; contracted None; construction complete
Operating • Output shortfall from expected
• Technology O&M
Assumed low, mitigable or allocatable
Sources: Adapted from Holland & Hart, RE Project Development & Finance & Infocast, Advanced RE Project Finance & Analysis *NOTE: Underlining signifies that the risk assessment outcome changes during the step at hand.