Battery Procurement Supplier

Regulatory Requirements:

• At the beginning of the project in January 2010 the project team learned that the turbine could not be purchased, a loan could not be executed, and the PPA could not be signed until the environment assessment (EA) was approved by NRCan and AANDC.  We had budgeted six months work for an EA on about two acres of farm land and expected it to be completed by September 2010.  However, the EA was not signed until March 2011, which delayed the purchase of all equipment until after March 2011. 
• In addition, NAV Canada initially did not approve of the project because the turbine was near the flight path of one of the runways at the Regina Airport, although it was 14 km from the airport.  After providing NAV Canada more details about the site, we received a letter approving the site.  Note that approvals from NAV Canada and Transport Canada for the turbine and anemometer, as well as the environmental assessment and financing arrangements were required by the turbine manufacturer, the financial institution, and the utility before the project could proceed.  In total, the EA put the project one year behind schedule because it affected procurement of all equipment which ultimately increased project costs.

Major Procurement:

• A diligent procurement process was important to reduce the technical risk associated with this leading edge project. The following metrics, in no particular order, were used to select the best supplier for the battery and turbine:
  1. Company maturity
  2. Financial stability of supplier
  3. Ability to deliver
  4. Technical performance
  5. Maintenance service and availability of parts
  6. Price

• The selection of the turbine was relatively simple as few products were available and in the end Enercon stood out due to company maturity, product maturity, and maintenance services. Enercon was also diligent on the process and required proof of the following prior to sale: 1) financing, 2) geotechnical assessment, 3) environmental assessment, 4) power purchase agreement, and 5) NAV Canada and Transport Canada approval which showed their strength and experience in the area. The result was very positive as we received a very good product and great support throughout the project.
• The battery procurement was more complex and had higher risk because battery storage technology is still immature on the utility scale. A request for quotation (RFQ) with detailed specifications was released and an in-depth review was undertaken of each battery supplier. The diligence paid off as the battery chosen performed quite well and met all the technical needs of the project. Several risks were avoided with other suppliers, one of which went bankrupt and another that had to restructure. The lesson here shows the importance of having a detailed RFQ and diligent review process when requesting external services.