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Research on equipment and material supply management of photovoltaic EPC project

The ground-based centralized photovoltaic power station project has the characteristics of short construction period, high proportion of equipment and material procurement costs, and scattered on-site operation areas, which brings great difficulties and challenges to the management of equipment and material supply for such projects. How to effectively guarantee the timely and reliable supply of equipment and materials is the key to the success of such projects. Taking the implementation cases of several photovoltaic EPC projects in Chengdu Institute as examples, through experience summarization and induction, the equipment and material management methods of photovoltaic EPC projects are studied and some ideas and suggestions are put forward.

1. Overview

Worldwide, the installed capacity of new energy power generation projects is maintaining a rapid growth trend, and the market prospect is broad. Among new energy power generation projects, photovoltaic power generation projects and wind power generation projects account for a relatively high proportion and grow rapidly; In terms of domestic photovoltaic power generation projects, in 2017, the newly installed capacity of domestic photovoltaic power generation was about 53GW, and the cumulative installed capacity was 130.25GW, with a year-on-year increase of 53.45%; In 2018, the cumulative installed capacity of photovoltaic power generation exceeded 170GW, with a year-on-year increase of 34%, accounting for more than 9% of the total installed capacity of power supply, with a significant growth trend. Photovoltaic power generation projects include ground-based centralized photovoltaic power generation projects and distributed photovoltaic power generation projects. The ground centralized photovoltaic power station is often constructed in the mode of EPC project general contracting. This mode can fully mobilize the enthusiasm of the project contractor, which is conducive to the overall allocation of resources, reasonable arrangement of construction period nodes, and optimization of cost control, and is conducive to the overall control of the project construction by the owner. At the same time, the receiving date: August 1, 2020 also puts forward higher requirements for the overall project management ability of the EPC contractor. Generally, the construction period of the photovoltaic power station is about 4 to 6 months, but there are also individual projects that will be further shortened, or even less than 2 months, due to various reasons. In this case, the timely supply of equipment and materials becomes the key to ensure the orderly construction of the project. Taking several PV EPC project implementation cases of Chengdu Institute as examples, the author studied the equipment and material management methods of PV EPC project through experience summary and induction, and put forward some ideas and suggestions.

Photovoltaic project

2. Key points and difficulties of equipment and materials supply for PV EPC project

2.1 Key points of equipment and material supply for PV EPC project. For the ground centralized photovoltaic power station construction project, on the premise of ensuring the project quality and safe production, the timely grid connection of the project is the top priority of the project’s success or failure. Due to the particularity of the photovoltaic industry, the government departments will usually formulate corresponding electricity price policies and specify the grid connection time for the photovoltaic construction projects approved each year, such as June 30 or December 30; At the same time, as the electricity price of photovoltaic power generation is reduced year by year, if the actual grid connection time of the project is later than the specified node time, the project grid electricity price will be subject to the new standard, which will seriously affect the investment rate of the project and damage the interests of the investors. Therefore, the on-schedule grid connection of the project is the key to the success of the project construction. In the total investment cost of photovoltaic power stations, the procurement cost of equipment and materials accounts for about 70% to 80% of the total project cost, which accounts for a high proportion. Therefore, the importance of equipment and materials supply is self-evident. In order to ensure the smooth implementation of the project installation work, the focus of equipment and material supply is on timeliness and reliability. Timeliness mainly means that equipment and materials need to arrive on time according to the specified construction schedule to avoid economic losses caused by slowdown, and more importantly, to avoid the delay of precious construction period and endanger the grid connection time; Reliability is mainly to ensure the quality of equipment and materials supply. In the case of tight project duration, if rework or electrical accidents occur due to product quality problems, it will have a serious impact on the project duration.

(1) The procurement cycle is tight. According to the construction sequence of general photovoltaic power stations, after the project is mobilized and started, after a short period of field leveling, drilling and other preliminary procedures, the equipment and materials in the array area, such as photovoltaic support, photovoltaic module and other materials, need to be timely arrived to carry out the subsequent support and module installation work, while the electrical equipment in the booster station needs to determine the product model and production drawings as soon as possible due to its long installation process and related to the civil design work, Therefore, after the formal commencement of the project, it is often necessary to complete the procurement work within 1 to 2 months. However, according to the conventional procurement process, it is difficult to complete the bidding and contract signing in such a short time.

(2) The manufacturing cycle is short. Most of the equipment and materials required for the construction of photovoltaic projects need a certain period of material preparation, production and manufacturing. However, in the process of project implementation, it is often necessary to complete the production and supply in a short time, which brings great pressure to the supply of equipment and materials. For example, the photovoltaic support in the array area is the first equipment and materials required to enter the site during the installation process of the array area equipment. The first batch of materials are often required to be supplied to the site within one month after the project starts. In such a short time, it is very difficult to complete the whole process of design scheme determination, raw material procurement, steel structure fabrication, welding, galvanizing, Etc; If the steel is made of special materials, it will take 20~30 days from the steel plant to the factory. Similarly, among the booster station equipment, the production and manufacturing cycle of the main transformer, GIS, SVG and other equipment is relatively long. Most high-voltage equipment manufacturers need a regular production and manufacturing cycle of 2 to 3 months. However, in order to meet the construction schedule of photovoltaic projects, it is often necessary to control the production and manufacturing time of these equipment within 1 to 2 months, which requires high production organization work.

(3) Supplier capacity bottleneck. In view of the fact that the approval of photovoltaic projects is often carried out in batches, it is easy to cause the projects to be piled up and launched, and the situation of “630” and “1230” is concentrated, such as the “630” rush to install in China in 2017 and 2018, and the “630” rush to install in Vietnam in 2019. Due to the limited capacity of equipment and materials in the domestic photovoltaic industry, under the background of nationwide “630” construction period, major suppliers in the industry will inevitably have production difficulties and difficulties in delivering goods on schedule, and the production capacity bottleneck is an inevitable phenomenon.

(4) Difficulty in logistics and transportation. The transportation volume of equipment and materials for photovoltaic projects is large, and the manufacturers are all over the country. A project often has hundreds of vehicles of goods to be transported to the construction site. For a photovoltaic project, any vehicle of goods is essential. If any vehicle of goods fails to arrive at the project site on schedule, it may cause incalculable losses to the project. However, the location of PV projects is often located in remote areas, especially in western China. PV projects are usually built in high mountains and high altitudes. The transportation route needs to pass through a large number of mountain roads, and the transportation conditions are poor. In addition, it is easy to be affected by secondary geological disasters during the transportation process, resulting in route interruption and transportation stagnation. For example, at the end of 2018, during the implementation of a photovoltaic project in the Changdu region of Tibet by our company, the mountain collapsed and formed a barrier lake at the peak of the project construction, resulting in the interruption of the national highway; By November, the Sichuan-Tibet Railway and the Qinghai-Tibet Railway were experiencing severe snowstorm and extreme weather. The roads were frozen and heavy vehicles could not pass, causing serious difficulties to the logistics organization.

3. Research on countermeasures

In view of the above problems, it is necessary to adopt reasonable and feasible measures and means to control the entire supply process of equipment and materials, and effectively manage the whole cycle of equipment and materials supply based on the concept of supply chain control, so as to ensure the timeliness and reliability of equipment and materials supply. Based on the project management and control experience gained by our company in recent years, the author believes that the main measures that can be taken are:

(1) plan first and carry out the work as a whole. Procurement planning is a prerequisite for the orderly implementation of procurement work. First of all, focus on following up the EPC project in a targeted way, and carry out targeted planning work at the bidding stage of the project, including preparing the procurement planning scheme, defining the division of bid sections, basic technical requirements of equipment, and selection grade; After winning the bid, make full use of the time before the official mobilization of the project, carry out the work in an integrated way, change the idea of single-line promotion, and carry out all procurement preparations in parallel. For example, for conventional projects, after the formal contract is signed, the project department will submit the bid division planning scheme and the procurement project initiation plan, and then carry out the preparation, review and bidding of the procurement documents for the subsequent specific bid sections. According to the special situation of photovoltaic projects, the project procurement planning scheme can be defined at the project bidding stage. After the project is awarded, if there is no major scheme adjustment, the follow-up work can be carried out quickly. The procurement project initiation work and the procurement document preparation and review work can be carried out simultaneously.

(2) Flexible use of procurement methods to shorten the procurement cycle. Generally, the procurement of bulk equipment and materials is mainly carried out by means of bidding, which has the advantages of fairness, transparency, strong competitiveness and good compliance; The disadvantage is that the procurement cycle is long. In addition to bidding procurement, other procurement methods specified in the procurement management system of China Power Construction Group and our company also include competitive bidding procurement, inquiry comparison, competitive negotiation, single source procurement and other procurement methods. Among them, competitive bidding procurement means the act of purchasing the subject matter in a competitive way and selecting suppliers. “Bidding procurement” and “bidding procurement” are basically the same except for the legal basis, time requirements and terms. This procurement method is an institutional innovation to improve the efficiency of procurement under the premise of legal compliance of enterprises. The bidding procurement method can shorten the procurement period of about 10 days under the condition of having the advantages of bidding procurement method, especially for projects with extremely tight construction period such as photovoltaic power stations. On the premise of legal compliance, the flexible use of various procurement methods can greatly shorten the procurement process time and ensure the smooth implementation of follow-up work.

(3) Pre-purchase of bidding project. In the EPC bidding process of domestic and international PV projects in recent years, due to the control of the equipment grade and supply quality of the project, the Bid Inviter often requires the bidders to fill in the short list of suppliers to be selected in the general contract bidding documents, so as to facilitate the Bid Inviter’s comparison and selection. After the short list is determined, it is easy to cause adverse effects such as insufficient competitiveness and difficult price control of the EPC general contractor at the stage of equipment procurement after winning the bid. In this case, in order to strengthen the competitiveness of the general contractor in the bidding stage, and at the same time, to avoid the risks in the project implementation stage, it is necessary to carry out the pre-procurement work by pre-selecting the suppliers or determining the short list of suppliers before the general contractor bids, in order to meet the needs of the bidding work. Due to the short procurement preparation time, the pre-procurement work is mostly carried out through competitive bidding, competitive negotiation or inquiry and comparison. After determining the exclusive (exclusive) suppliers or the short list of suppliers through the pre-procurement work, they can sign a conditional effective agreement with them to agree on the price, validity period, contract effective conditions, etc. Through the pre-procurement work, on the one hand, the bidding price of the project can be further controlled through competition before bidding, on the other hand, greater support from suppliers can be obtained after selecting the bidding partner, and the competitiveness of the general contractor can be improved on the premise of responding to the bidding documents of the general contractor. At the same time, after winning the bid, the procurement time can also be greatly shortened, and the production and stock work can be directly started to ensure the project duration.

(4) Make full use of the centralized procurement platform and give full play to the Group’s advantages. Under the guidance of the SASAC and the group company’s centralized procurement management and control concept, China Power Construction Group has established a centralized procurement network platform for equipment and materials. At present, it has successively updated and launched the Phase I, Phase II and Phase III platforms. Through the centralized procurement platform, we can give full play to the scale advantage of group procurement, further reduce the procurement cost, and strengthen the management and control of suppliers; On the other hand, for wind turbines, photovoltaic modules and other major equipment and materials required for the construction of wind power and photovoltaic projects, Power Construction Group will organize framework bidding every year to determine the annual framework shortlisted enterprises. In case of capacity bottleneck in the supply of PV modules, coordination with suppliers through the Group’s platform has stronger advantages and greater coordination, which can effectively guarantee the delivery of modules as scheduled and reduce the risk of project implementation.

(5) Deeply control the expediting and inspection of equipment and materials. Expediting and inspection work refers to a series of expediting activities taken to urge the supplier to fulfill the Seller’s contractual obligations and submit manufacturing documents, drawings and final goods according to the progress and quality specified in the procurement contract from the time of issuing the order to the time of delivery of the goods, so as to meet the requirements of engineering design and on-site construction and installation. According to the characteristics of the photovoltaic project, the expediting and inspection plan of the project should be formulated at the beginning of the project, and the expediting level and inspection method of different equipment and materials should be clearly defined. During the implementation process, the expediting and inspection work should be flexibly carried out by various means such as on-site inspection, irregular inspection, telephone, fax, network, etc. At the same time, the risk identification list of equipment and materials supply shall be established, and the risk level of delivery and quality shall be updated timely through the situation found in the expediting inspection, and positive countermeasures shall be taken to prevent the situation from deteriorating and jeopardizing the implementation of the project.

Photovoltaic solar panels

4. Conclusion

In combination with the implementation of several photovoltaic projects, Chengdu Institute is carrying out the exploration and trial implementation of some new control measures. In view of the actual difficulties in the supply management of equipment and materials for photovoltaic projects, and in combination with the development of Internet technology, a digital equipment and material supply network management and control platform is being piloted to carry out digital control over the whole process of equipment production, inspection and transportation. After the completion of the digital control platform, suppliers can upload production plans, production orders, production conditions, image data and other information through the platform. The purchaser can track the production and manufacturing progress of each equipment in real time through the platform, which can save a lot of manpower and costs. After the equipment is shipped out of the factory, for large and important equipment, the recoverable GPS module can be equipped to locate and upload the location information to the platform to ensure that the transportation progress is controllable. With the continuous development of photovoltaic technology, the market of photovoltaic projects in the future is broad. By strengthening the supply management of equipment and materials, the smooth construction of the project can be guaranteed, the project investor can be guaranteed, the project income of the EPC general contractor can be guaranteed, and the purpose of cost reduction and efficiency increase can be achieved.

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