The Netherlands: GL Presents ‘Real’ Capital Expenditures at EWEA Offshore 2011

The Netherlands: GL Presents 'Real' Capital Expenditures at EWEA Offshore 2011

The process of financing an offshore wind farm is complex, multiple contracts with different suppliers and contractors raises a multitude of commercial risks.

The final amount of total capital expenditure (CAPEX) of a project is one of the central questions in financing a wind project and estimating this total CAPEX upfront is a challenge. In his presentation at the EWEA Offshore Conference in Amsterdam this week, Wilhelm Heckmann, GL Garrad Hassan, shows how accurately quantifying these risks, their probability, and the impact of their occurrence, can lead to a significant improvement in the quality of the budget calculation for CAPEX.

Oversight and/or misallocation of risk represent the greatest potential for loss within a project’s financing. Various risks can have a knock-on impact on other risk items, often located within different contracts. The incorporation of these impacts into the stochastic analysis is an important mechanism as it simulates the ‘chain-reaction’ that occurs along the critical path of the construction programme, should one or more contractors be late in finishing their work.

In his presentation Mr Heckmann will give an overview on the complexity of capital expenditures and their associated contracts, the risk allocation within single contracts and contract interfaces, the determination of risk items and their impact of their occurrence, and the need to control and monitoring risk as a continuous process.


Offshore WIND staff, November 29, 2011; Image: ewec2010