The technology group Wärtsilä, with over 25 years of project experience, is witnessing the rise of utilities into an important customer segment, alongside the independent power producers. The oil and gas industry has fallen on tough times, utility-scale solar projects with a full Engineering, Procurement and Construction (EPC) are growing fast, and gas fired power plants remain stable. Geographically, the demand for EPC contractors is growing fastest in the emerging markets of Africa and South-America.
Wärtsilä Energy Solutions has completed over 500 EPC projects worldwide. Whereas every single project is unique, there have been shifts and changes in the overall needs and expectations of Wärtsilä’s customers. Compliance with the regulations, concern for the environment and the well-being of local communities have all gained in importance.
“Soft values are becoming hard facts. Issues such as providing employment opportunities and training to local employees and supporting local development efforts will become even more significant in the future,” says Antti Kämi, Vice President of Engine Power Plants at Wärtsilä.
Another major trend affecting large and global OEMs (Original Equipment Manufacturer) acting as EPC contractors is rising protectionism. EPC contractors like Wärtsilä are increasing their local sourcing, and seeking local partners to work in many geographies. Political instabilities may impact project and delivery schedules. Likewise, shifts in long-term weather patterns can take the project participants by surprise.
All of these trends underline the understanding and capacity for risk mitigation, including the allocation of risks between project participants. “Definition of requirements and project scope, is a crucial factor in the EPC type of contracting arrangement. It would be wise to choose performance based requirements for the power plant solution, as installation-specific one-off applications add to the overall project risks,” says Mr. Kämi.
The size and complexity, of EPC projects carried out by Wärtsilä Energy Solutions is growing. Cost overrun and delays are the prime causes of concern. “Compared to the industry average, Wärtsilä succeeds better in risk management. Wärtsilä has a standardised EPC concept and proven solutions, and we truly know the countries and the local communities in which we operate,” says Mr. Kämi.
In addition to the standardised EPC concept and local knowledge, Wärtsilä’s success relies on digital technologies. Digital tools support the online communication between the customer, Wärtsilä and other project participants, and enhance the efficiency and transparency of project work among all the participants.
Digital tools, developed by and unique to Wärtsilä, include DCM365, which provides real-time information to all the project stakeholders, Site 365 for the management of construction site information, SQAD, which generates and configures projects’ quality assurance and LOGWIS for project logistics and material management. With these information systems, Wärtsilä is able to offer schedule and performance guarantees for the entire solution and provide the customer with only one point of contact.
For Wärtsilä’s EPC projects, digitalisation of work has sped up the transfer of data and information about, for instance, materials and logistics. With digital tools, information can be gathered and updated on-line on construction sites, and not just in the office environment, which has a positive impact on the delivery times of projects.
Date: Nov 24, 2017