Energy consultancy Xodus Group and legal advisors Shepherd and Wedderburn have joined forces to urge the wind industry to move towards standardised contracts to help reduce risk and save project time. And Xodus has developed a web-based risk management tool to help companies maps out the likelihood, severity and cost implications of project risk.
At the Offshore Wind 2010 event, which opened today in Liverpool, the two companies — both have renewable business streams and wide experience of delivering projects in the energy sector — are urging offshore wind developers to start a dialogue towards standardisation similar to that used by the oil and gas industry.
“Developing a new standardised form of contracts for the offshore wind industry would slash time on negotiations between developers and the supply chain and save money," said Richard Cockburn, Partner in the Energy Group at Shepherd and Wedderburn. "The industry should develop a bespoke contracts system for offshore wind that allocates technical and commercial risks in a fair and appropriate manner and is project finance friendly.”
And Eric Doyle, Alternative Energy Manager at the Aberdeen-based Xodus Group is also warning offshore wind developers to take a ‘long sighted’ approach or risk losing some of their supply chain to oil and gas projects as the industry picks up over the coming two years.
Bottlenecks impact on project time
“Both industries share many of the same suppliers such as manufacturing, engineering consultancy and suppliers of cabling, so there is a real risk of creating a bottleneck, which could impact on project time," said Doyle. "There has been a lot of consolidation recently of small and medium-size oil and gas operators, which is giving a renewed boost to offshore orders, which could mean that the wind industry risks losing out if it does not plan for the longer term.”
Xodus Group's new XRISK web-based risk management tool to the energy market, which is on display at Offshore Wind 2010, is aimed primarily at Project & HSEQ engineers and managers, who need to understand how risk needs to be managed in order to deliver succes. Xodus developed the software to provide visibility on project risks and their effective management.
Doyle added: “The offshore wind industry should not underestimate the cost of risks and planning ahead with standard contracts can help to minimise some of those liability issues from the start of a project. We have developed XRISK in response to the need for a single, securely shared risk register which allows managers anywhere in the world to build plans and track and manage actions in real time. It can even consider reputational damage and sends direct alerts by email or SMS if action is not followed up.”
