Renewable Energy 125 (2018) 819e828
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The influence of stakeholder groups in operation and maintenance services of offshore wind farms: Lesson from Denmark Dewan Ahsan a, *, 1, Søren Pedersen b a Department of Sociology, Environmental and Business Economics, (Danish Centre for Risk and Safety Management), University of Southern Denmark, Niels Bohrs Vej 9, DK-6700 Esbjerg, Denmark b Fredericia College of Marine and Technical Engineering, Niels Bohrs Vej 3, DK-6700 Esbjerg, Denmark
a r t i c l e i n f o Article history: Available online 7 March 2018
One of the prime challenges in offshore wind is to manage and coordinate with the various stakeholders involved in the operation and maintenance (O&M) phase. Therefore the aims of this paper are: i) to map the stakeholder groups involved in O&M of Offshore Wind Farm (OWF), ii) to assess the identified stakeholder group's interest and power to influence O&M, iii) to evaluate the relationship between different stakeholder groups and iv) to highlight potential strategies to manage the stakeholder groups. In this article, the stakeholder analysis approach is used. The results reveal that eleven key stakeholder groups are directly involved in the O&M phase. Among those, the stakeholder groups named Investor/ owner, Turbine supplier, Operator's own technicians, Port facility and Vessel supplier are the most powerful stakeholders. In contrast, Onshore service providers and Component suppliers are considered less influential stakeholders. A friendly relationship exists between the governmental agency and the owner of OWFs. The operators consider themselves as competitors. The operator-subcontractor relationship is top-down. The relationship among the sub-contractors is complex because of the perception of losing business if they cooperate with their competitors. From the sustainability point of angel, achieving cooperative advantage is always preferable than competitive advantage. © 2018 Elsevier Ltd. All rights reserved.
1. Introduction Recent trend indicates that there is a significant global effort to produce energy from green sources [1]. Offshore wind power is expected to contribute significantly to the future growth of green energy [2]. Large Offshore Wind Farms (OWF) can provide CO2 free energy for society, which will in return reduce the impact of global climate change. The statistics of the European Wind Energy Association indicate that in 2015, the capacity of offshore wind energy in the EU was 3034.5 MW which was 24% of the total EU wind power capacity in 2015 [3]. However, the EU targets to produce more electricity (the target is up to 234 GW) from offshore wind by 2050 [4]. The North Sea is one of the primary locations for offshore wind energy not only for Denmark but also for the UK and Germany. In fact, Denmark is the world's first country to move from pilot-scale OWF (the Vindeby OWF was built in 1991 for demonstration
* Corresponding author. E-mail addresses:
[email protected] (D. Ahsan),
[email protected] (S. Pedersen). 1 Web: http://findresearcher.sdu.dk:8080/portal/da/person/dah. https://doi.org/10.1016/j.renene.2017.12.098 0960-1481/© 2018 Elsevier Ltd. All rights reserved.
purpose) to large commercial OWF's [5]. The first and second commercial OWFs (Horns Rev 1 and Nysted) were constructed in 2002 and 2004, respectively. Since then, the offshore wind power sector has experienced dramatic growth, especially in Denmark, UK and Germany [6]. In 2015, Denmark produced about 42% and in 2016 about 38% of the electricity from wind [7]. In 2009, Horns Rev 2 OWF (total capacity 209 MW; 91 turbines with 2.3 MW capacity for each turbine) started its operation in Denmark. Subsequently, Rodsand II OWF (total capacity 207 MW; 90 turbines, each with 2.3 MW capacity) was commissioned in 2010. Furthermore, Denmark built an even larger OWF named Anholt OWF (total capacity 400 MW; 111 turbines, each with 3.6 MW capacity) commissioned in 2013. Another big project, Horns Rev 3 OWF (total capacity 400 MW; 49 turbines, each with 8.3 MW capacity) will be constructed in 2017e2019 and is expected to start full production from January 2020 (Table 1) [8]. The modern seabed fixed offshore wind turbines can be installed a long distance from the shoreline (up to 50 m depth of water). Therefore, nowadays, OWFs are moved long distances from the shoreline to provide the larger space for the benefit of economy of scale and to obtain higher average wind speeds, to get lower turbulence than onshore, to minimize visual impact and to ensure
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Table 1 Renewable energy production from offshore in Denmark (Danish Energy Agency, 2017). Offshore wind farm Existing Offshore Wind Farms Vindeby Tuno Knob Middelgrunden Horns Rev I Ronland Nysted Samso Frederikshavn Horns Rev II Avedore Holme Sprogo Rodsand II Anholt Upcoming Offshore Wind Farms Horns Rev III Krigers Flak Nearshore OWF
Year in operation
Turbines (numbers)
Total capacity (MW)
1991 1995 2000 2002 2003 2003 2003 2003 2010 2009/10 2009 2010 2013
11 10 20 80 8 72 10 3 91 3 7 90 111
5 5 40 160 17 166 23 8 209 11 21 207 400
2020 e e
49 75 44
400 600 350
subsidies from public fund [9]. However, the cost of installation and Operation & Maintenance (O&M) increases with the depth of the water and distance to the shoreline [10,11]. So, due to high installation and O&M costs, the cost of energy from OWF is much higher than from any other conventional energy source. For instance, the installation costs of an offshore wind turbine, more than 60 nautical miles from shore and in 40e60 m of water depth, are expected to be 230% higher than for the sites less than 12 nautical miles from shore and in 0e20 m of water depth [12]. It has been reported that no OWF construction project has been completed without a contractor or sub-contractor facing bankruptcy [13]. There is also a significant risk that O&M costs will be higher than predicted, because there is no certain way of knowing exactly what the repair and maintenance costs of an OWF will be over a 25 year operational life [14]. This relatively newly emerged industry is still in the phase of the learning curve. Repairs are an estimated 5e10 times more expensive to perform offshore than onshore, mainly due to the need for expensive crane vessels and waiting time for suitable working weather windows [15]. The perception that OWF involves financial risk has increased because of several high profile failures (e.g. multiple failures in gearboxes, generators and transformers) in early OWFs. Several OWF projects have already suffered major delays in supplying key inputs and these ended up incurring additional cost [14.] Safety risk is another prime concerns in the O&M phases of an OWF. There is a general concern about how to maintain the high safety standards in offshore working environment (particularly personnel movements, working at height, working with high voltages and currents) [14]. Technicians working in the OWFs need to be transported by crew vessel from the service port on a daily basis for O&M purposes, which is time consuming. Sometimes it can be uncomfortable and may cause that the technicians are sea sick and thus unable to perform their duties as efficiently as they would otherwise be able to do [10]. Apart from that, another challenge that faces the offshore wind industry is the risk of a shortage of vessels for construction and O&M purposes. Because of the above mentioned challenges the industry is already heavily subsidized by public funds and the big question is for how long will the public support still be available? Therefore, a combined effort from all stakeholders concerned is required to reduce the levelized cost of energy (LCOE) of OWF. 1.1. Offshore wind farm O&M stakeholders Many scholars from different disciplines have tried to define the
term stakeholder. Freeman [16], who is one of the founders of the stakeholder theory, defines the concept of stakeholders as any group or individual who can affect, or is affected by, the achievement of an organization's objectives. According to this definition, a broad range of stakeholder groups would typically be involved in a project or an organization. From the managerial point of view, it might be very difficult to address/handle a large group of stakeholders. A question for debate has been how to define the term stakeholder more precisely, so that it comprises figures who contribute positively to a firm's value creation process [17]. Therefore, a narrow definition of stakeholder has been proposed by some scholars. For instance, Carroll [18] who defines a stakeholder as an individual or group who proclaims to have one or more stakes in a company. Through these “stakes”, they can affect or be affected by the operation of the company. Stakeholders are consequently the groups who “interact with the firm and thus make its operation possible” as mentioned by Nasi [19]. The need to define stakeholders more specifically is further supported by Starik [20] who defines stakeholders as individuals or groups with whom a company or an industry interacts and who have a “stake”, or vested interest, in the firm in question. According to Donaldson and Preston [21] stakeholders are “persons or groups with legitimate interests in procedural and/or substantive aspects of company activity”. Johnson and Scholes [22] defines the term stakeholder as “those individuals or groups who depend on the organization to fulfill their own goals and on whom, in turn, the organization depends”. Later on, Freemen [23] actually comes up with a modified definition of stakeholders by attributing the concept to “the groups who are vital to the survival and success of the organization”. For the purpose of this study, Freemen's second definition of stakeholder is applied, because this definition is obviously much narrower than his previous definition (any group or individual who can affect, or is affected by, the achievement of an organization's objectives) and it is a completely organization focused-definition. It has been mentioned earlier that stakeholders of a firm can significantly affect the achievement of firm's objective [16]. Friedman and Miles [24] also claim that the success of a company largely depends on several issues such as: Does the organization have the competencies to understand the stakeholder concerns? How should these concerns be addressed in practice? Is there evidence of organizational learning through engagement and is the organizational learning implemented in policies and decisions? Stakeholder analysis is considered a useful strategic tool for a company to identify current and future collaboration opportunities
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[25] as well as potential threats from its respective stakeholders [26] and how best to handle them [27]. During the O&M phase of an OWF project a vast number of stakeholders are involved who have the capacity to affect O&M, both positively and negatively. Therefore, in order to ensure successful O&M activities in an OWF, a strong integration among the stakeholders is very essential. However, the big challenge for an O&M operator is to correctly map the project's primary or key stakeholders to evaluate their needs and their expectations from the project and to assess the abilities of various stakeholders to influence the O&M activities. So, to ensure better O&M, the OWF operator should focus on how to coordinate and manage the stakeholders. The ISO 55001:2014 Asset Management standard [28] and the upcoming ISO 45001 Occupational health and safety management systems standard [29] also emphasizes to work in an integrated way with the stakeholders. However, there is still a lack of researches focused on stakeholder analysis in O&M of OWF. The motivation of this research is to provide useful insights on the stakeholder groups associated with O&M of OWF, which can be utilized to develop proper strategies to manage the diverse stakeholders efficiently. To reach this overall aim, this article is going to answer the follow research questions i) Who are the stakeholder groups in O&M OWF? ii) What are the interests and influence of these stakeholder groups in the O&M of OWF? iii) What are the existing relationships among these stakeholder groups? iv) What are the potential strategies to manage these stakeholders in an integrated manner? In this paper, several abbreviations are used. The abbreviations are explained in Table 2. The structure of this paper is as follows. Section 2 provides a brief overview on the theory, methodology and data collection procedure. In Section 3 the results and the discussion are presented while Section 4 concludes the paper with an indication of the future research. 2. Methodology 2.1. Stakeholder theory Stakeholder theory is useful to assist the managers in identifying what kinds of relationships they need to establish with their core stakeholders to create value in their business and to achieve the corporate objectives [30]. Donaldson and Preston [21]
Table 2 Terminologies of the abbreviations used in the article. CS CTV DEA EIA GA GWO IA IN LCOE LTAF LTIF ON O&M OT OWF PF SM SOV TS VS ISO
Component supplier Crew Transfer Vessel Danish Energy Agency Environmental Impact Assessment report Governmental agency Global Wind Organization Industry association Investor/owner Levelized cost of energy Lost Time Accident Frequency Lost Time Injury Frequency Onshore service provider Operation and Maintenance Operator's own technician Offshore Wind Farm Port facility Subcontractor's manpower Service Operation Vessels Turbine supplier Vessel supplier International Organization for Standardization
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introduced three types of stakeholder theories i.e. descriptive, instrumental and normative. Reed [31] defines the descriptive stakeholders as those who are going to be (or there is a possibility that they will be) affected by a firm's decision-making process or operational activities. The individuals or groups who have valid normative claims on a firm's activities are considered normative stakeholders. On the other hand, the instrumental stakeholders are defined as the key parties on whom a firm largely depends to run its business and who are influential as to whether the firm achieves its corporate goal. Therefore, in this paper, for the purpose of stakeholder mapping, the concepts of the instrumental stakeholder theory are applied. 2.2. Stakeholder's power/interest matrix The stakeholders' power/interest matrix is proposed by Eden and Ackermann [32] and further improved by the scholars [33e36]. In the power/interest matrix, stakeholders are categorized by their levels of power and interest on the firm/project. It helps the managers map out the key stakeholders who need specific attention and management strategies to achieve the company's goal. To analyze the stakeholders' influences on O&M, the method described by Ackermann and Eden [33] is applied. According of this two-by-two matrix (Table 3) the stakeholders are categorized into four groups; players, subjects, context setters and crowd. Players have both high interest and high power to influence the project activities; subjects have high interest but low power; context setters have high power but low direct interest on the project; and the crowd consists of stakeholders with low interest and low power. 2.3. Data collection and analysis This study was conducted in Denmark. Primary data were collected by semi-structured open-ended interviews with the personnel of organizations/companies working in the offshore wind energy sector in Denmark. Questions used in the interviews include (but were not limited to) the following; i) According to your opinion, who are the key stakeholders and what are their interests in O&M? ii) How do you identify the influence of stakeholders on O&M? iii) How do you analyze the cooperation among the stakeholders? iv) What are the current barriers of cooperation and v) What could be done to increase the level of trust among the stakeholders? A total of thirty-three interviewees were selected by using the “snowball” sampling technique. The Snowball technique is widely used as a useful qualitative technique by several researchers [26,37e40]. This technique is beneficial for finding the targeted respondents who have skills or information in particular areas. The interviews were conducted from May 2015 to February 2016. Table 4 shows the interviewees and their positions in the organizations/companies. However, the interviewees' companies' names are not mentioned in the paper and are kept confidential in accordance with the rules of Datatilsynet (The Data Protection Agency) and to comply with the desire of the interviewees. The questionnaire was sent to all the respondents one week prior to the meeting. Each of the interviews took about an hour and all the interviews were conducted at the office of the respective interviewees. All interviews were recorded and transcribed for analysis. Secondary data was collected from scientific articles, reports and companies' websites. 3. Result and discussion This section first presents the results and the implications of the results.
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High
Table 3 Stakeholder's power/interest matrix.
(Players)
(Crowd)
(Context setters)
Low
Interest
(Subjects)
Low
Power
High
3.2. Offshore wind farm operators
Table 4 List of anonymous interviewees. Actors
Position of respondent in the organization
No of interviewees
Turbine supplier Owner (and operator) Service provider (onshore service provider, component supplier manpower provider) Governmental agency Industry Association
Manager operation Manager of regulatory affairs Manager business maintenance HSQE manager Manager of logistic support Project manager Special Advisor Policy advisor
3 3 7 8 4 5 1 2
3.1. Stakeholder mapping This study has identified eleven key (Fig. 1) stakeholder groups who are involved in the O&M of an OWF. Furthermore, the stakeholders are also categorized into internal and external stakeholder groups. Both of the groups are important for the O&M activities in an OWF. The key internal and external stakeholders identified in this study are summarized in Table 5.
Industry Association (IA)
In this article, the operator is not considered to be a stakeholder as the operator has the sole responsibility for running the OWF and performing all the necessary O&M during the entire life cycle of an OWF either by its own workforce or by outsourcing. Orsted (previously known as DONG Energy Wind Power), Vattenfall and E. ON are the major operators not only in Denmark but also in Europe. It is observed that an operator might play multiple roles; i) can be the wind turbine manufacturer ii) can play a dual role both as the manufacturer of turbines and the owner of an OWF and iii) act as a third party company which only offers O&M either in a partial or the entire project life of an OWF. Orsted, Vattenfall and E. ON (all these companies play dual roles as owners and operators of OWF in Denmark) perform O&M tasks both handled by their own technicians and from outsourcing. When a OWF owner purchases the turbine from a manufacturer company (e.g. Siemens Gamesa, MHI Vestas Offshore Wind), there is a warranty period for the O&M which normally lasts from two to five years. After the warranty period, the investors/owners would outsource the O&M service to the best service provider on the basis
Grid Owner (GO) Governmental Agency (GA) Subcontractor´s manpower (SM)
Investor/Owner (IN)
Vessel Supplier (VS)
Turbine Supplier (TS)
O&M activities
Onshore Service Provider (OS)
Operator’s own technicians (OT)
Component Supplier (CS) Port Facility (PF)
Direct influence Indirect influence Fig. 1. The key stakeholders of Operation and Maintenance (O&M) in an offshore wind farm.
D. Ahsan, S. Pedersen / Renewable Energy 125 (2018) 819e828 Table 5 The key stakeholders for the O&M operator of an offshore wind farm. Internal stakeholders
External stakeholders
Investor/owner, Operator's own technician
Turbine supplier, Governmental agency, Onshore service provider, Subcontractor's manpower, Grid owner, Port facility, Vessel supplier, Component supplier and Industry association
of a competitive price or the owner can manage the O&M phase utilizing their own employees. 3.3. Role of stakeholder in O&M The role of various stakeholders in the O&M of an OWFs is described below; 3.3.1. Investor/owner of an offshore wind farm (IN) The owner is one of the key stakeholders for the O&M operator as the owner controls the business through hiring an operator. It is noticed that there are two ways of being involved as the investors/ owners in an OWF. Firstly, a full ownership which means a company owns 100% share of an OWF. Horns Rev 2 OWF is an excellent example of this type of ownership, as it is fully owned by Orsted [41]. In this research, it is found that the investment is rather small and Orsted took the investment risk alone. Secondly, there are other cases where a single owner initially made an investment and started the operation, and after a couple of years the initial investor invites other investors to invest in the ongoing project. For example, Rodsand 2 was firstly owned by E. ON and in 2013 SEASNYE bought 80% of the shares [42]. 3.3.2. Turbine supplier (TS) MHI Vestas Offshore Wind and Siemens Gamesa are the leading turbine suppliers. When an investor/owner wins the OWF contract from the government, then the investors calls for the tender to supply turbines, along with installation work and O&M warranty. Once the contract is won by a turbine supplier, its various departments will be involved in the process. First the documentation department has to approve that the turbine meets the specifications of the OWF. Then the turbine manufacturing department delivers the turbines to the installation department for offshore installation. Finally, at the end of the installation, the O&M service department is in charge of the O&M phase until the agreed warranty period (usually 2e5 years ends). It is also a requirement that the turbine supplier involves the operator's own technicians during the O&M warranty period which is considered the training phase for the operator's own technicians and as such time for them to develop the required O&M skills to enable them to take over the responsibility after the warranty period ends. After the turbine supplier's O&M warranty contract ends, the owner's O&M operator takes over the responsibility. For instance, on the Rodsand 2 project Siemens Gamesa was the turbine supplier and they provided an O&M warranty for 2 years. After that period E. ON. took over the O&M responsibility [42]. 3.3.3. Operator's own technicians (OT) As mentioned earlier, every operator has his own technicians to work in O&M which is especially required after the 2e5 years warranty period. For example, at the end of the 5 years warranty period DONG Energy appointed about 50 technicians for Anholt OWF [43]. However, it is very expensive for the operators to hire own staff, therefore, outsourcing is widely utilized to minimize the costs (e.g. servicing of cranes, lifts, high voltage equipment). Furthermore, to minimize the O&M cost, an owner might operate
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the OWF or hire the turbine supplier for the task or any third party operating company all depending on which operator is the most cost effective. 3.3.4. Subcontractor's manpower (SM) Subcontractors provide different offshore services and manpower. Skilled manpower is needed to maintain the various parts of the OWF such as bolt tightening, high voltage service, crane service, emergency equipment service etc. As mentioned earlier, these service tasks could be performed by the operators' own manpower or could be outsourced to reduce the O&M costs. Several big and small outsourcing companies (e.g. Q-start, Total Wind, SubC, Fano Crane Service, APRO Wind) run their business in Denmark. The big sub-contractors can also provide complete service (by utilizing their own technicians, providing spare parts, vessels, crane etc.) to fix the fault. 3.3.5. Onshore service provider (OS) Any offshore O&M work task must be well integrated with onshore facilities. In the service port the operator has his own warehouse where the onshore service provider (e.g. Eurest, Stena Recycling) performs various services such as waste handling, cleaning, catering which need to be performed on a regular basis to ensure effective O&M activities. 3.3.6. Vessel suppliers (VS) Crew Transfer Vessels (CTV) such as crew boats, helicopters are essential to any O&M service. To reduce the cost, the operator normally subcontracts the service vessels. There are several companies in Denmark (e.g. A2SEA, Fred Olsen, KEM Offshore ApS and Esvagt) who supply crew vessels, crane vessels, hotel vessels and helicopters (e.g. UNI-FLY). If the vessel supplier performs badly during the summer season (the peak working season) a change of outsourcing company would be very expensive, because during the peak working season there is a shortage of vessels. As OWFs are moving further away from the shoreline, several companies have chosen to manage service from very comfortable hotel vessels, completely suitable for serving as an accommodation, which allow the technical staffs to stay overnight and consequently ensure a longer working period. As for instance, the modern Wind Service Operation Vessels (SOV) which provide all facilities like: onboard workshop room, spare parts storage and office facilities, safer access to the OWF (via a hydraulic gangway) in various wind and wave conditions, crane, private cabins for the technicians and crews and amusement facilities as well [44]. The contracts for supplying vessel service are normally entered for one year. However, the vessel suppling company likes to have a sustainable contract (e.g. at least for five years) in case of modern service vessel like the SOV as the investment cost of such a vessel is huge. 3.3.7. Component suppliers (CS) Component suppliers (e.g. Comtec Int. A/S, Rodgaard Import A/S, Fano Kran-Service A/S) can only deliver minor spare parts, tools and safety equipment. However, within the warranty period, the turbine suppliers are responsible for delivering these components. After the warranty period, the owner's operator takes over the responsibility to purchase these components and they can purchase the components from any suppliers. Usually, the turbine supplier supplies the key components (e.g. gearbox, blade bearings and switchgears). 3.3.8. Government agency (GA) The Danish Energy Agency (DEA) plays the key role in the offshore wind energy sector in Denmark. DEA provides a one-stop service for the operators in order to ensure a smooth licensing
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procedure, where the interests of other governmental authorities are managed internally to minimize the administrative work for the owners and operators. DEA is not only the authority responsible for inviting offshore wind tenders but also responsible for finding the location of new offshore wind projects [45]. Any installation or O&M operation has to be performed in accordance with DEA's guidance and requirements. The Danish Work Force Agency, Veterinary and Food agency and several other governmental agencies regularly visit the OWFs for the purpose of inspection. The police can also visit the OWFs for investigation purposes in case of an incident or accident has occurred. 3.3.9. Port facility (PF) The O&M port facilities are among the key stakeholders in the offshore wind business. The OWF operator and the suppliers always need to use port facilities not only to transfer the turbines, technicians etc. from onshore to offshore, but also for transferring various types of equipment (both in the installation and O&M phases). Therefore, an operator needs to choose a suitable port for ensuring effective and efficient O&M activities. The distance between the port and the OWF and the quality of the facilities offered by the port are key factors for operators to take into consideration when selecting a port. 3.3.10. Grid owner (GO) The grid connection is important for the distribution of the produced electricity. Therefore, the connection to the onshore grid has to work efficiently. It is the responsibility of the grid owner (e.g. Energinet. dk) to ensure that the grid connection works properly. 3.3.11. Industry association (IA) An industry association (e.g. Danish Wind Industry Association) of investors, operators and subcontractors exist to promote the offshore wind industry. This association works closely with political leaders to facilitate the growth of the emerging industry. Moreover, Danish Wind Industry Association also functions as a knowledge dissemination and innovation center formed to support the members. 3.4. Stakeholder's interest in O&M As Offshore Wind Farm O&M activities involves a wide range of stakeholder, their interests/stakes are also diverse. However, their common commercial interest is making profit by offering O&M services at competitive prices and their common social interest is to provide a steady supply green energy (Table 6). Safety at work and as such work related accidents is also considered a very important factor in the tendering process as an operator's Lost Time Injury Rate (LTIF) or Lost Time Accident Rate (LTAF) has significant influence on who is winning the tender. 3.5. Stakeholders' relationship The key relationships among different stakeholders are described in detail below. 3.5.1. Owner-governmental agency relationship The Danish government has a strong commitment to providing 100% energy from renewable sources by 2050 [46]. To fulfill this target, the Danish government has provided a one-stop service platform to encourage all the potential investors to take part in the tender process of OWF. The tender procedure has been revised recently, to ensure openness and transparency throughout the whole tendering process. Now tendering parties have the opportunity to engage in dialogue and negotiation about the tender
specifications and the framework conditions. From the interviews, it is evident that the operators are satisfied with the present tendering policy adopted by the DEA. DEA provides all the necessary information (e.g. Environmental Impact Assessment report, met ocean and geological data) of the designated OWF area. As price is the primary tendering criteria in the Danish OWF system, the new tendering model which includes the final step of the tendering process provides an opportunity for dialogue with prequalified tenders for the price negotiation. The operators appreciate these approaches to the tendering system. 3.5.2. Owner-owner relationship A number of recent large OWF projects has applied multiple ownership, not only due to the huge capital investment, but also to reduce the investment risk for individual owners. An example in which the multiple ownership is applied is Anholt OWF where the investment has jointly come from Orsted (50%), Pension Denmark (30%) and PKA A/S (20%) [47]. Siemens Gamesa was the turbine supplier and warranty provider for 5 years. Subsequently Orsted will perform O&M for the entire life cycle of the OWF [43]. In the case of Rodsand II Offshore Wind Farm E. ON had 100% ownership until 2013. Subsequently E. ON has divested 80% of its ownership to SEAS-NVE [42]. 3.5.3. Owner-operator relationship It has already been mentioned that the investor/owner of an OWF has to choose an operator company for the O&M phase. Normally there is a good relationship between owners and operators. Some of the big owners sometimes actually play the dual role of operators and owners. 3.5.4. Operator-operator relationship Operators consider themselves to be competitors, so they are less willing to cooperate in knowledge sharing. However, on health and safety issues, they work together. Offshore Wind Health and Safety Association (Gþ) and Global Wind Organization (GWO) are good examples of operator-operator cooperation as Gþ has been formed by eleven different operators. The key aim of Gþ is to cooperate to ensure knowledge sharing in health and safety performance [48] and GWO cooperates on the basic training requirements [49,50]. 3.5.5. Operator-subcontractor relationship There are many suppliers (even for the same service) and the number is increasing. The operator-subcontractor relationship is, however, dependent on a top-down approach. The operators call for the bid among the subcontractors who provide various services (e.g. manpower, vessels). According to the views of the interviewed subcontractors, this bidding process is very complicated and time consuming as the operators demand extensive documentations which according to the subcontractors' opinion is “unnecessary” and “irrelevant”. The absence of common technological standards is considered a major obstacle for creating a cooperative relationship between operator and subcontractors. 3.5.6. Subcontractor-subcontractor relationship It seems that the cooperation among the subcontractors is highly difficult, as they compete to win the same contract. A subcontractor needs to invest man-hours in preparing the necessary documents for competing for the bid and he may not win the contract and thus lose the invested man-hours. So the competition on bidding is the main obstacle in subcontractor-subcontractor relationship. Furthermore, subcontractors also perceive that they will lose business if they share knowledge with each other. However, a clear strategic alliance might enable the subcontractors to
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Table 6 Summary of interests of various stakeholder groups in O&M. Stakeholder groups
Interest
Investor/owner (IN) Turbine supplier (TS) Operator's own technician (OT) Subcontractor's manpower (SM) Onshore service provider (OS) Vessel supplier (VS) Component supplier (CS) Governmental agency (GA) Port facility (PF) Grid owner (GO) Industry association (IA)
Profit, good reputation, zero accident Good reputation, trust, profit, zero accident Job security, workplace safety, zero accident Business sustainability, trust, profit, zero accident Business sustainability, trust, profit, Business sustainability, trust, profit, zero accident Business sustainability, trust, profit, Regulation, enhanced green energy supply Business sustainability, trust, profit, Green power supply, no grid failure Business sustainability, innovation of technology
provide diversified quality services as a one-stop-shop. For instance, this study revealed that instead of competing against each other, recently several subcontracting companies have formed strategic alliances (e.g. Djurs Wind power and NorthSea Offshore Service Group) to provide quality service in various areas of offshore wind energy e.g. installation, cabling, commissioning, preassembling, decommissioning, consulting etc. [51,52]. 3.5.7. Operators-grid owner relationship Operators are fully dependent on grid owner to insure that the energy generated is distributed to the onshore grid. Any fault/ problem in the grid connection has a high impact on the OWF performance as there is only one offshore main cable connection between the OWF and the onshore grid in Denmark. For example, from 19 October to 18 December 2015, Horns Rev 2 could not supply electricity due to grid failure on the offshore main cable and Anholt OWF had the same problem from 29 October to 21 November 2015 [53]. However, the grid owner is liable to compensate the operators in case of any problem in the grid. 3.5.8. Operator-port relationship In Denmark, several ports and the airport of Esbjerg have successfully provided the service facilities for the offshore wind industry not only for Denmark but also for Germany, UK and other countries (e.g. DanTysk OWF in Germany). For instance, the port of Esbjerg is the service harbor for Horns Rev 1 and 2 OWFs. The Danish port Havneby at Romo has been chosen as O&M port for the German OWF Butendiek [54]. 3.6. Stakeholders' power and influence on O&M The identified eleven key stakeholder groups need to work in an integrated way not only in installation, but also in the O&M phase in order to ensure the economic success of the OWF project. Many services are provided by multiple subcontracting companies. Normally, the contracts agreed between subcontractors are made to last a year. Therefore, failures caused by any stakeholder involved in O&M service chain (Fig. 2) can incur economic loss by increasing the levelized cost of energy (LCOE). Based on the findings of this study, the following power/interest matrix has been compiled for the various stakeholder groups involved in OWF operation & maintenance services (Table 7). 3.6.1. Crowd OS (Onshore service providers) and CS (Component suppliers) are placed in the crowd group as they have low interest and low power on the operator's decision making process because there are sufficient suppliers available in the market who can provide these services at short notice.
3.6.2. Context setters The GO (Grid Owner) has high power on the O&M because every year the O&M operators must provide documentation (on meeting the required service target as per turbine supplier), but GO has low interest in O&M activities, because if the production fails GO will get power from other sources. 3.6.3. Subjects GA (Government agency) has high power as they are the only party that endorses and executes the public legislation regarding the OWFs. On the other hand, GA has low influence on the O&M as the business is run by the private sector and GA is neither responsible for profit nor economic loss. IA (Industry association) has high interest because it works for the operators, TS (turbine supplier), SM (subcontractor's manpower) and their funding comes from these parties. However, IA has low power on O&M as IA is not directly or indirectly involved in O&M services. 3.6.4. Players As the IN (Investor/owner) invests the capital and also hires the operators, they have high power and high interest in O&M. The TS (Turbine supplier) has also high interest and high power on regular O&M service as the optimum power production vastly depends on the efficiency of O&M service and close co-operation between operator and TS. Uninterrupted production also largely depends on the OT (Operator's own technician) which gives OT high power and high interest in keeping their employment. The operator chooses the O&M service port for the whole O&M phase (25 years) which gives the PF (Port facility) high interest. If there is any problem with port facilities, that will definitely affect the O&M activities, therefore PF also has high power to influence O&M. Subcontractors' manpower (SM) companies are in business due to the rapid expansion of the offshore wind industry. SM has high power and influence on O&M. Finally, to ensure the successful O&M services, VS (Vessels supplier) is essential and as there is a shortage of VS on the market, VS is provided with high interest and high power to influence the O&M service. 3.7. Potential strategies to manage the stakeholders The manager of any corporate business needs to manage his relationship with the potential stakeholders (specially the primary stakeholders), as the firm has a responsibility to manage these relationships strategically in order to meet corporate objectives [16,21]. Though the managers should share the goal of treating all primary stakeholders equally, in practice, it might be challenging due to the complex situation [55]. Therefore, the operators of OWF could adopt stakeholder management strategies based on their power to influence O&M. The stakeholder power/interest grid
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Offshore Wind Farm
Offshore Transport
Operation & Maintenance Port Facilities
Onshore
Grid Owner
Governmental agency
Component supplier
Operator’s warehouse
Vessel supplier
Turbine supplier
Ports Facility Onshore service provider Operator’s own technician Subcontractor’s manpower
Fig. 2. Operation and Maintenance service chain of an offshore wind farm.
Table 7 Stakeholder power/interest grid for O&M of an offshore wind farm.
High
SM
GA
IN
IA
(Subjects)
VS
(Need to keep satisfied)
Interest
OS
TS
OT
(Players)
PF
(Need to work closely)
GO
CS (Crowd)
(Context setters)
(Need to monitor)
(Need to keep informed)
Low Low
(Table 7) of this research suggests that the operators need to maintain a very close working relationship with IN, TS, OT, VS, SM and PF, as these stakeholders have high power to influence O&M activities. Since the OWF's are growing bigger in capacity, the financial investment is also increasing, therefore, more investors are required. The potential new investors such as commercial banks and similar financial companies could consider investing in the offshore wind industry even though they have a short-term involvement policy. These potential players could be involved in the project on a short-term basis (e.g. involvement for 5e10 years
Power
High
instead of for the entire project life i.e. 25 years) to reduce their risk as new investors [56]. This study reveals that due to lack of strong vertical relations/ coordination, there is a lack of experience and information sharing among operators and subcontractors. However, for improving the sustainability of the offshore wind industry, a strong vertical coordination is vital. For instance, the subcontractor's employees often have a large insight on safety in the O&M work. This information is often shared between the operator's own technicians and subcontractor's technicians in the coffee meetings. However, this shared experience is seldom transmitted to the O&M operator's top
D. Ahsan, S. Pedersen / Renewable Energy 125 (2018) 819e828
management level. Therefore, it might be a good idea to form a knowledge sharing platform (consisting of the top level manager, the subcontractor concerned, the operator's own technicians and subcontractor's technicians), where the technicians can discuss their experience in a friendly atmosphere. This will also contribute to increasing the level of trust among these stakeholders. OWF operators in Denmark develop their own standards based on specific cases. Operators should also seriously consider setting common standards, especially for the sub-contractors, so that they can supply the service to any operating companies based on the common standard. This would also reduce the volume of documentation required to enable the subcontractors to take part in the bidding process and in turn reduces the cost of O&M. The stakeholder power/interest grid matrix of this research also suggests that the grid owner (GO) needs to be kept informed about the ongoing O&M task on a regular basis. In addition, for improving the sustainable marketing of green electricity both operators and grid owners could work together strategically to find out how to expand the existing grid area in Europe. 4. Conclusions This article focuses to provide the answers of the four research questions related to the involvement of the stakeholder groups in O&M of OWF; their role, interest and power; their relationships and the potential strategies to manage the identified stakeholders. It has been revealed that 11 key stakeholder groups are playing the leading role in O&M of OWF. The power/interest matrix shows the IN, TS, OT, VS and PF stakeholder groups have the highest potential to influence the O&M activities. In terms of stakeholder relationships, it is noticed that in many cases there is a lack of friendly cooperation among various stakeholders. The competition among the O&M service providers' increases, as the number of subcontracting companies also increases. It is evident from this research, the stakeholders are less willing to share information, which is important for the improvement of O&M services. Therefor the operators and other key stakeholders need to work closely together to develop trust by sharing the relevant information and adopting a bottom up approach in the communication strategy. Co-operation is also essential stakeholder management strategy to invent the cost effective O&M solutions for maximizing energy production and to minimize O&M cost. Future research should be taken to investigate what strategies could be useful to minimize the existing conflicting situations among the different stakeholders. Acknowledgement Gratification must be directed to the interviewees for their strong support during the interviewing process. References [1] K. Boroojeni, M. Amini, A. Nejadpak, S. Iyengar, B. Hoseinzadeh, C. Bak, A theoretical bilevel control scheme for power networks with large-scale penetration of distributed renewable resources, Electro Inf. Technol. (2016) 510e515. [2] R. Pelc, R. Fujita, Renewable energy from the ocean, Mar. Policy 26 (6) (2002) 471e479. [3] EWEA, Wind in Power, 2015 (access 25.11.17), http://www.ewea.org/ fileadmin/files/library/publications/statistics/EWEA-Annual-Statistics-2015. pdf. [4] EU, Commission Staff Working Paper, Impact Assessment SEC, 2011 (access 21.11.17), https://ec.europa.eu/energy/sites/ener/files/documents/sec_2011_ 1565_part2.pdf. [5] J. Ladenburg, A. Dubgaard, Preferences of coastal zone user groups regarding the siting of OWFs, Ocean Coast. Manag 52 (5) (2009) 233e242. [6] T. Hooper, M. Austen, The co-location of OWFs and decapod fisheries in the UK: constraints and opportunities, Mar. Policy 45 (1) (2014) 295e300. [7] Vindmølleindustrien, 2017 (access 26.11.17), http://www.windpower.org/da/
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