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.