Page 353 - Fluid Power Engineering

Planning and Execution of W ind Projects 313

risks from the perspective of the financier will assist a developer to
avoid rejections or significant rework:

Revenue risk. Since PPA is the main source of cash flow, it is

closely scrutinized. Details of PPA are presented in Chapter
13. Some of the items in the PPA that are of concern are: Cur-
tailment clauses, penalties related to inaccuracy of day-ahead
forecasts, cost of providing reactive power, and penalties re-
lated to delay in commissioning. Note that all these may not
apply to a project at hand.
On time completion risk. This risk pertains to ensuring that the

project is completed on time or worse, not abandoned mid-
stream because of insurmountable hurdles. A financier will
ensure that all the permits have been obtained and there are
no serious hurdles to overcome. In addition, a financier will
scrutinize the EPC contract with the goal of eliminating ambi-
guities in scope, roles, and responsibilities, and link payments
to milestones or completed work.
Operational risk. This risk pertains to ability to generate the

projected amount of energy in order to meet the cash flow
needs. This is typically accomplished through performance
warranties, and operations and maintenance contracts; the fi-
nancing entity will therefore scrutinize these contracts to en-
sure that high availability is built into the contract.

Construction, Installation, and Commissioning
In this phase of the project, construction, erection and commission-
ing of the wind project are performed. For convenience, this phase is
divided into four stages, as illustrated in Fig. 14-3:

FIGURE 14-3 Typical timeline for construction and installation. Months are
indicated as M1, M2, . . . . The total duration depends on number of turbines.