| Wind Farm Construction, What Does it Take? Location: New York Author: Mark Burlingame Date: Thursday, April 30, 2009 Many readers are probably aware that last year, the United States overtook Germany as the holder of the world's largest installed capacity of electricity from wind generation. This new and exciting part of our industry added 8,558 MW of generation in 2008 alone (American Wind Energy Association, "Annual Wind Industry Report, 2008"). So, what is involved with building a wind farm? In this IssueAlert article, UtiliPoint International interviews Jesper Hensen, Director of Sales— USA for KR Wind, an international crane company that specializes in the installation of wind turbines. KR Wind was established and incorporated in March 2002 as a joint venture between heavy lift giant, Mammoet, and construction and engineering group, A. Enggaard. KR Wind's original business approach was to provide crane solutions to the wind industry worldwide. In addition to KR Wind's core business the company has become a turnkey logistics provider, with a line of services directed towards the Wind Farm Construction supply chain for on shore wind projects. Safety comes before everything else and KR Wind is OHSAS 18001 certified. KR Wind operates globally with offices and operations in Denmark, the USA, Canada, Germany, Australia and the United Kingdom. Today the company employs more than 389 staff worldwide. KR Wind's North American office locations are in Dallas, TX; Oshawa, ON; Quebec; and Calgary, AB. KR Wind covers the rest of the world via Mammoet's 60 branch offices distributed all over the world. UtiliPoint: How long has KR Wind been in North America? Jesper Hensen: Since 2005 UtiliPoint: What does KR Wind do? Mr. Hensen: KR Wind supports development and construction of onshore wind farms by providing logistics solutions including road transport, ocean shipping, crane erection, installation, and service and maintenance for any wind turbine type of large MW size. We have partnerships that allow us to support and offer Balance of Plant operations as needed by our clients. KR Wind also provides our clients with many services including: * Operations and Scheduled Maintenance * Service and Repair * Component change out * Site Surveillance and * Troubleshooting UtiliPoint: What effects on the Wind Generation business does KR Wind foresee in the current recession? Mr. Hensen: Close to 50% reduction in Wind Farm projects from 2008 to 2009. UtiliPoint: What are the challenges of doing business in the US? Mr. Hensen: Research and understanding of each individual local market is essential for cost efficiency. KR Wind has had experience in many markets around the world including Italy, Spain, China, Australia and Germany, therefore we have had relatively few surprises here in the United States. Although KR Wind's fleet of cranes opened the door to new business here, we have realized the need to adapt our scope of services to better serve new segments of clients. Markets are ever-changing in North America requiring us to adapt to services that suit these market developments. Every region in the United States presents different opportunities and challenges to provide cost efficient solutions to our clients. UtiliPoint: What unexpected challenges has KR Wind faced in the US? Mr. Hensen: The United States market structure differs from that of Europe and other markets around the world. The U.S. wind market is extremely competitive and has high barriers to entry due to the commercialization of the wind market and the profitability therein. Originally, in Europe, we were a company in a niche market working directly for manufacturers and expanding our relations in that regard. North America however, is structured differently where client segments are more highly diversified, and Wind Farm developers have an important influence on the construction of the Wind Farms themselves. KR Wind has moved from being a leader in a niche industry to a much expanded role in the renewable energy industry. UtiliPoint: What are the challenges of doing business in the EU? What would Americans or Canadians find different? Mr. Hensen: In Europe, every country has a different way of doing business and there are policy changes and regulations to follow depending on where the work is being performed. This has given us the ability to adapt to local market conditions across the world in the global wind construction market UtiliPoint: What kind of equipment does KR Wind use for Wind Farm construction? Mr. Hensen: KR Wind leads the world in wind industry erection cranes, owning and operating close to 30 lattice boom cranes in the 400-600 ton range. Our crane fleet is strategically selected to fit local wind farm conditions so to prevent any unnecessary delays, optimize our client's time, and minimize overall cost of the wind project. We own several Narrow Track crawler cranes that allow our clients to save costs on road construction. The CC2800-1NT and/or LR1300W(NT) can crawl fully boomed between turbines, and only require 18 ft of road width allowing crawling up to a 17% longitudinal inclination. We also own a fleet of truck mounted lattice boom cranes that are very suitable in complicated areas with mountain conditions or obstacles. These LG1550's and/or TC2800's offer savings compared to other main erection wind farm cranes, and only require road widths similar to transport equipment delivering the turbine components. KR Wind owns several standard crawler cranes. These standard crawlers are the best option for flat site areas with limited complications and are the most frequently used main erection cranes in North America. All of our equipment has specific advantages that will suit certain wind farm conditions. KR Wind advises our clients on what we feel are the best options for their wind farms to reduce overall construction costs. UtiliPoint: Walk us through a wind farm installation process. What are the steps and associated challenges? Mr. Hensen: KR Wind's projects can utilize hundreds of truckloads, railcars, and several ships. We schedule and coordinate between manufacturers and the various transportation companies involved in each project. This ensures safe and complete transportation for our clients' wind turbines to each site or location. Once on site KR Wind provides specification of site roads and crane pads in order to ensure optimal setup for each wind turbine. KR Wind works with our clients to organize site warehousing for Wind Turbine Generator (WTG) parts and supplies at a centrally located project yard. Once the WTG parts are on site we are able to safely transport the separate parts to each pad site. We then determine the specification of all major equipment to strategically erect the wind turbines on an accelerated basis. We provide the mechanical erection under direct project supervision, document control, onsite safety officers and procurement of each WTG. KR Wind has a group of project and site managers, supervisors, and small installation teams trained in the erection of WTG's of all specifications, including mechanical and electrical completion processes. KR Wind is able to install the tower sections, nacelle, and rotor based on the technical requirements that our clients provide. After the mechanical completion, KR Wind has a team of electricians to perform all tower wiring in accordance with the requirements of each WTG's installation manual. KR Wind is ISO 9001/14001 Certified, which ensures a high quality level. The Project team assigned to each project is responsible for running the projects according to written agreement, and according to internal procedures. These responsibilities include: * Development of project execution schedules prior to commencement * Development of site organizational charts, and key personnel * Establishment and maintenance of project budgets and schedules * Definition of tasks and sequencing of the schedule for optimizing the work scope * Assurance of scheduled activities for the project with a realistic duration and performance logic * Monitoring and assessing performance. * Development, implementation and management of corrective actions, as necessary * Proactive problem solving and risk evaluation * Informing management of significant issues / challenges related to performance of project. * Identifying potential technical risks and effective use of risk management tools * Assurance that the scope of work is accomplished according to the Frame Agreement UtiliPoint: Walk us through a wind installation in Europe? Mr. Hensen: The main difference in the wind installation in Europe compared to the United States is the scope of work in Europe has been narrower compared to here in the United States. UtiliPoint: Where in North America have you been most active? Mr. Hensen: KR Wind has been very active in Texas, Oregon, Washington, Minnesota, North Dakota, Kansas, Oklahoma, Pennsylvania, Iowa, Ontario, New Brunswick and Nova Scotia. UtiliPoint: Where do you foresee future wind installations in North America, e.g., the Great Plains, the Eastern Seaboard, the Pacific Northwest, etc.? Mr. Hensen: Moving forward as more wind projects come to fruition we foresee future projects coming from all regions. The one region that has not been very active is the southeastern corner of the United States but as the demand for renewable power increases over the coming years, we certainly hope that this region becomes a place to provide our services and develop its unharnessed wind potential. UtiliPoint: As a provider to the wind market what sets KR Wind apart from its competition? Mr. Hensen: We feel that coupling KR Wind's powerful crane fleet with our global experience and expertise in the wind market provides cost efficient solutions and services to our clients quickly and accurately for any scope of work required. KR Wind's experts are devoted to discovering new ways to be more resourceful. Our knowledgeable and experienced sales and project teams work as a cohesive unit to optimize the transparency between our company and clients to fully provide our clients the highest levels of satisfaction for our services provided. UtiliPoint's IssueAlert® articles are compiled based on the independent analysis of UtiliPoint consultants. The opinions expressed in UtiliPoint's® IssueAlert® articles are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. UtiliPoint's sole purpose in publishing its IssueAlert articles is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. © 2008, UtiliPoint® International, Inc. All rights reserved. To subscribe or visit go to: www.utilipoint.com |