IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i17p7232-d408564.html
   My bibliography  Save this article

Analysis of Contracts to Build Energy Infrastructures to Optimize the OPEX

Author

Listed:
  • Jesus Javier Losada-Maseda

    (LNG Regasification Terminal of Delimara, Reganosa Servicios SL, 15620 Mugardos, Spain)

  • Laura Castro-Santos

    (Department of Naval and Industrial Engineer, Escuela Politécnica Superior, University of A Coruña, 15403 Ferrol, Spain)

  • Manuel Ángel Graña-López

    (Department of Industrial Engineer, Escuela Universitaria Politécnica, University of A Coruña, 15405 Ferrol, Spain)

  • Ana Isabel García-Diez

    (Department of Naval and Industrial Engineer, Escuela Politécnica Superior, University of A Coruña, 15403 Ferrol, Spain)

  • Almudena Filgueira-Vizoso

    (Department of Chemistry, Escuela Politécnica Superior, University of A Coruña, 15403 Ferrol, Spain)

Abstract

The employer (owner) of the project wants to obtain the maximum profit for the money invested and the consultant (contractor) will try to give less for that money. The regulation of their relationship is based on the contractual agreement, which in the energy sector is mainly based on the engineering, procurement, and construction (EPC) model. The objective of this work was to evaluate which factors should be included in the drafting of contracts, to minimize problems between the parties, and thus minimize execution costs and optimize operation and maintenance costs. Information and data on the integration of operability and maintainability criteria in contracts for 158 projects, with a total contract value of close to €40,000M, were analyzed. Several of those projects corresponded to wind, solar, and hydroelectric plants. The information collected the perception of the agents involved, and was classified according to the experience of the agents consulted in the operation and maintenance areas. Finally, the proposed criteria were prioritized. In general, the owner is willing to introduce these criteria in his contracts if they reduce the operation and maintenance cost by around 1–5%, while the contractor is interested in increasing his probability to be selected by 1–3%.

Suggested Citation

  • Jesus Javier Losada-Maseda & Laura Castro-Santos & Manuel Ángel Graña-López & Ana Isabel García-Diez & Almudena Filgueira-Vizoso, 2020. "Analysis of Contracts to Build Energy Infrastructures to Optimize the OPEX," Sustainability, MDPI, vol. 12(17), pages 1-17, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:17:p:7232-:d:408564
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/17/7232/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/17/7232/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Raufdeen Rameezdeen & Chamil Rajapakse, 2007. "Contract interpretation: the impact of readability," Construction Management and Economics, Taylor & Francis Journals, vol. 25(7), pages 729-737.
    2. Jiyong Ding & Chen Chen & Xiaowei An & Na Wang & Wujuan Zhai & Chenhao Jin, 2018. "Study on Added-Value Sharing Ratio of Large EPC Hydropower Project Based on Target Cost Contract: A Perspective from China," Sustainability, MDPI, vol. 10(10), pages 1-19, September.
    3. Myung-Hun Kim & Eul-Bum Lee & Han-Suk Choi, 2019. "A Forecast and Mitigation Model of Construction Performance by Assessing Detailed Engineering Maturity at Key Milestones for Offshore EPC Mega-Projects," Sustainability, MDPI, vol. 11(5), pages 1-21, February.
    4. Myung-Hun Kim & Eul-Bum Lee & Han-Suk Choi, 2018. "Detail Engineering Completion Rating Index System (DECRIS) for Optimal Initiation of Construction Works to Improve Contractors’ Schedule-Cost Performance for Offshore Oil and Gas EPC Projects," Sustainability, MDPI, vol. 10(7), pages 1-31, July.
    5. Brookes, Naomi J. & Locatelli, Giorgio, 2015. "Power plants as megaprojects: Using empirics to shape policy, planning, and construction management," Utilities Policy, Elsevier, vol. 36(C), pages 57-66.
    6. Qingzhen Zhang & Wenzhe Tang & Jersey Liu & Colin F. Duffiel & Felix Kin Peng Hui & Lihai Zhang & Xuteng Zhang, 2018. "Improving Design Performance by Alliance between Contractors and Designers in International Hydropower EPC Projects from the Perspective of Chinese Construction Companies," Sustainability, MDPI, vol. 10(4), pages 1-24, April.
    7. Muñoz-Cerón, E. & Lomas, J.C. & Aguilera, J. & de la Casa, J., 2018. "Influence of Operation and Maintenance expenditures in the feasibility of photovoltaic projects: The case of a tracking pv plant in Spain," Energy Policy, Elsevier, vol. 121(C), pages 506-518.
    8. Colin M. Rose & Julia A. Stegemann, 2018. "From Waste Management to Component Management in the Construction Industry," Sustainability, MDPI, vol. 10(1), pages 1-21, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlos Araújo-Rey & Miguel A. Sebastián, 2021. "An Approach to the Analysis of Causes of Delays in Industrial Construction Projects through Planning and Statistical Computing," Sustainability, MDPI, vol. 13(7), pages 1-21, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Byung-Yun Son & Eul-Bum Lee, 2019. "Using Text Mining to Estimate Schedule Delay Risk of 13 Offshore Oil and Gas EPC Case Studies During the Bidding Process," Energies, MDPI, vol. 12(10), pages 1-25, May.
    2. Myung-Hun Kim & Eul-Bum Lee, 2019. "A Forecast Model for the Level of Engineering Maturity Impact on Contractor’s Procurement and Construction Costs for Offshore EPC Megaprojects," Energies, MDPI, vol. 12(12), pages 1-18, June.
    3. Zhang, Zumeng & Ding, Liping & Wang, Chaofan & Dai, Qiyao & Shi, Yin & Zhao, Yujia & Zhu, Yuxuan, 2022. "Do operation and maintenance contracts help photovoltaic poverty alleviation power stations perform better?," Energy, Elsevier, vol. 259(C).
    4. D'Agostino, D. & Minelli, F. & D'Urso, M. & Minichiello, F., 2022. "Fixed and tracking PV systems for Net Zero Energy Buildings: Comparison between yearly and monthly energy balance," Renewable Energy, Elsevier, vol. 195(C), pages 809-824.
    5. Johan Ninan & Stewart Clegg & Steve Burdon & John Clay, 2023. "Reimagining Infrastructure Megaproject Delivery: An Australia—New Zealand Perspective," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    6. Federico Minelli & Diana D’Agostino & Maria Migliozzi & Francesco Minichiello & Pierpaolo D’Agostino, 2023. "PhloVer: A Modular and Integrated Tracking Photovoltaic Shading Device for Sustainable Large Urban Spaces—Preliminary Study and Prototyping," Energies, MDPI, vol. 16(15), pages 1-35, August.
    7. Espinoza, R. & Muñoz-Cerón, E. & Aguilera, J. & de la Casa, J., 2019. "Feasibility evaluation of residential photovoltaic self-consumption projects in Peru," Renewable Energy, Elsevier, vol. 136(C), pages 414-427.
    8. Teti, Emanuele & Tului, Stefano, 2020. "Do mergers and acquisitions create shareholder value in the infrastructure and utility sectors? Analysis of market perceptions," Utilities Policy, Elsevier, vol. 64(C).
    9. Ke Xing & Ki Pyung Kim & David Ness, 2020. "Cloud-BIM Enabled Cyber-Physical Data and Service Platforms for Building Component Reuse," Sustainability, MDPI, vol. 12(24), pages 1-22, December.
    10. Chih-Chun Kung & Bruce A. McCarl, 2018. "Sustainable Energy Development under Climate Change," Sustainability, MDPI, vol. 10(9), pages 1-4, September.
    11. Rosaria E.C. Amaral & Joel Brito & Matt Buckman & Elicia Drake & Esther Ilatova & Paige Rice & Carlos Sabbagh & Sergei Voronkin & Yewande S. Abraham, 2020. "Waste Management and Operational Energy for Sustainable Buildings: A Review," Sustainability, MDPI, vol. 12(13), pages 1-21, July.
    12. Locatelli, Giorgio & Invernizzi, Diletta Colette & Brookes, Naomi J., 2017. "Project characteristics and performance in Europe: An empirical analysis for large transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 98(C), pages 108-122.
    13. Ulrik Kohl & John Andersen, 2022. "Copenhagen’s Struggle to Become the World’s First Carbon Neutral Capital: How Corporatist Power Beats Sustainability," Urban Planning, Cogitatio Press, vol. 7(3), pages 230-241.
    14. Hui-Ping Tserng & I-Cheng Cho & Chun-Hung Chen & Yu-Fan Liu, 2021. "Developing a Risk Management Process for Infrastructure Projects Using IDEF0," Sustainability, MDPI, vol. 13(12), pages 1-22, June.
    15. Nicole Anderson & Gayan Wedawatta & Ishara Rathnayake & Niluka Domingo & Zahirah Azizi, 2022. "Embodied Energy Consumption in the Residential Sector: A Case Study of Affordable Housing," Sustainability, MDPI, vol. 14(9), pages 1-18, April.
    16. Min-Ji Park & Eul-Bum Lee & Seung-Yeab Lee & Jong-Hyun Kim, 2021. "A Digitalized Design Risk Analysis Tool with Machine-Learning Algorithm for EPC Contractor’s Technical Specifications Assessment on Bidding," Energies, MDPI, vol. 14(18), pages 1-31, September.
    17. Hui Zhao & Jing Gao & Xian Cheng, 2023. "Electric Vehicle Solar Charging Station Siting Study Based on GIS and Multi-Criteria Decision-Making: A Case Study of China," Sustainability, MDPI, vol. 15(14), pages 1-23, July.
    18. Talavera, D.L. & Muñoz-Cerón, Emilio & Ferrer-Rodríguez, J.P. & Pérez-Higueras, Pedro J., 2019. "Assessment of cost-competitiveness and profitability of fixed and tracking photovoltaic systems: The case of five specific sites," Renewable Energy, Elsevier, vol. 134(C), pages 902-913.
    19. Ceric Anita & Sertic Josip, 2019. "The Engineering Project Organization Society and megaprojects: literature analysis using keywords," Organization, Technology and Management in Construction, Sciendo, vol. 11(1), pages 1968-1974, February.
    20. Invernizzi, Diletta Colette & Locatelli, Giorgio & Brookes, Naomi & Davis, Allison, 2020. "Qualitative comparative analysis as a method for project studies: The case of energy infrastructure," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:17:p:7232-:d:408564. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.