Rethinking the EPC for Independent Power Producers

Engineer and power line

Independent power producers are a potent and growing force within the electricity generation market. In British Columbia the government has ruled that BC Hydro can no longer commence new clean renewable energy projects, but rather these should be undertaken by independent power producers (IPP). This has opened the way for independent firms to engage in the construction of power generation plants to satiate the growing thirst for electricity and for companies that produce excess electricity as a result of their primary operations to sell their additional capacity back into the grid.

The independent firms in question provide electricity from a variety of different sources, from rural solar and wind projects, to non-storage hydro, biomass, municipal solid waste, storage hydro and energy recovery generation. Companies supplying their excess energy into the grid include mines, oil producers and other companies in the resources extraction industries.

When an independent power producer wishes to bring a new facility online they require the services of engineering, procurement and construction (EPC) specialists, who can design the project, source the materials required and build the installation to the required specifications. Typically, a power producer will begin by contracting the services of an engineering firm to evaluate the project and then propose a design. Once approved, additional firms can be retained to see to the construction phase and the procurement of parts. Often the IPP will attempt to locate an established team of EPC firms who are familiar with one another and have worked on previous successful projects.

However, if an IPP were to approach a procurement specialist as their first port of call in the process, they will find that they can have their facility constructed at a lower overall cost and to a high quality standard. Due to the procurement company’s close links with the manufacturers of the components required for the construction they will be in a position to take advantage of the bulk discounts that the procurement company can negotiate. In turn, they will avoid the mark-up applied by both the engineering and construction firms on the components. This double saving on components can have a significant material effect on the overall cost of a proposed project.

Procurement companies also have a detailed knowledge of the nature of the power production industry and the requirements of the engineering and construction phases. For many, finding engineering and construction companies that have the expertise to undertake a highly specialized power generation project can be difficult. A procurement company can help you put together these teams through an in-depth knowledge of the components used in high-voltage power generation, the specifications of the facilities required to house them, and a well-established network of contacts with the construction and engineering spheres that it can leverage to secure the highest quality services at reasonable prices.

Rather than start the process by approaching an engineering or construction firm, IPPs can begin by discussing their needs with their procurement partner who can reach out to the most appropriate engineering and construction firms in their network to assist with the design and construction based on the project’s components.

Domino Highvoltage bring expert knowledge of turnkey distribution, coupled with established relationships with suppliers, engineering and construction firms to each of our customers. We also have extensive knowledge regarding the construction of power generation facilities which can be brought to bear on projects big and small. To find out how Domino Highvoltage can support your IPP plan and help develop its next power production facility call 1-866-887-8617 or contact us to discuss your needs with one of our representatives.

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