Developing a Supply Chain
Rampion Wind Farm
Dr Dawn Robins
September 2012
A report commissioned by Marine SouthEast to identify suitable companies in a position to supply the
Rampion wind farm
Developing a Local Supply Chain: Rampion Wind Farm
August 2012
Contents
Contents ......................................................................................................................... 1
Executive Summary ........................................................................................................ 3
1
Introduction and Background to the Research...................................................... 9
2
Database Development ....................................................................................... 11
2.1.1
3
2.2
Data Compilation ......................................................................................... 13
2.3
Adapting to Supply ....................................................................................... 15
2.4
Database Maintenance ................................................................................ 16
Database Analysis ................................................................................................ 16
3.1
West and East Sussex ................................................................................... 18
3.1.1
3.2
4
Conclusions ............................................................................................ 24
Sussex In-Depth ........................................................................................... 25
Analysis of the Data Set ....................................................................................... 26
4.1
Value of Supply ............................................................................................ 32
4.1.1
5
Tier Structure ......................................................................................... 13
Data value disaggregation ..................................................................... 34
4.2
Value of Procurement for East and West Sussex ........................................ 36
4.3
Summary of Gap Analysis ............................................................................ 38
Conclusion and Recommendations ..................................................................... 38
5.1
Recommendations ....................................................................................... 39
5.2
Concluding Comments and Action Points.................................................... 40
1
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Tables
Table 1 Data Fields and Explanations ......................................................................... 11
Table 2 Data Source..................................................................................................... 14
Table 3 Total amount of companies and activities included in the database ............. 17
Table 4 Total Activities covered by Companies for each category in each area ....... 27
Table 5 Total of Companies covering activities and percentage of activities covered
in each tier In Sussex ................................................................................................... 28
Table 6 Total of Companies covering activities and percentage of activities covered
in each tier in Adjoining Counties ............................................................................... 30
Table 7 Gaps in the database- number of activities not assigned to companies and
the percentage of total activities this represents........................................................ 31
Table 8 Value of procurement for Sussex .................................................................... 36
Figures
Figure 1 Companies in the database located in West Sussex...................................... 19
Figure 2 Interactive mapping using Google Fusion Tables .......................................... 20
Figure 3 Company location and tier representation in West Sussex .......................... 21
Figure 4 Company Location in East Sussex .................................................................. 22
Figure 5 Company location and tier representation .................................................. 23
Figure 6 Company Location in the SW of East Sussex and Tier Represented ........... 24
Figure 7 the % value of the total cost of procurement between the categories ........ 33
Figure 8 the % value of the total cost of procurement for Balance of Plant ............... 34
Figure 9 Value distribution........................................................................................... 35
Figure 10 % split for the Project Development Category ............................................ 37
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Executive Summary
The Rampion offshore wind farm is being developed by E.on Climate & Renewables
off the coast of Sussex. When complete, it will generate up to 700MW of electricity
from a sea area of 167 km2. The wind farm construction will be implemented under
several main (Tier 1) contractors to be appointed by E.on around the end of 2013.
These Tier 1 contractors will then procure a wide range of products and services
from the supply chain.
E.on hopes to ensure that as much as possible of this procurement can be
contracted with companies local to Rampion, provided they can satisfy the
procurement need, but inclusion in the database does not guarantee commissioning
to the supply chain. Working in partnership with local authorities, E.on has
commissioned Marine South East to carry out a supply chain mapping and
engagement project. This comprises four major tasks:
1.
2.
3.
4.
Analysis of potential supply chain procurement needs for Rampion, based on
actual procurements for recent offshore wind farm developments (analysis
performed by 4COffshore);
Engagement of supplier interest in Rampion procurement opportunities
through a programme of awareness events, and later on through some Meetthe-Buyer events
Mapping of these supply chain procurement needs onto the supplier
capabilities within East and West Sussex and the surround areas (mapping
performed by University of Chichester);
Creation of an online supplier portal through which suppliers can register
relevant supply capabilities, and contractors can find capable local suppliers.
The University of Chichester was commissioned by Marine South East to develop a
database of companies located within the Sussex region that have the potential to,
or could with minor changes; supply the Rampion wind farm from construction
through to maintenance, and through life, before decommissioning. This activity
represents task 3. The main objectives were:
1. Create an electronic database of potential tier 2, 3 & 4 product or service suppliers
incorporating information from E.ON, The Crown Estates and local authorities. The
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database will include contact details, a short description of current activities,
capacity and capability1.
2. Identify South East England based companies having capabilities that can be
adapted and enhanced through development or diversification to fulfil key
parts/capability gaps in the supply chain requirement.
The database has been devised to include 3 main categories – Capital Expenditure,
Operational Expenditure, and Support Services. These three categories have been
further disaggregated to include eight sub-categories. These are:
•
•
•
•
•
•
•
•
Balance of Plant
Construction Port
Project Development
Installation and Commissioning
Project Monitoring
Wind Turbines
Operations and Maintenance
Support Services
Each of these sub-categories contains all of the activities necessary for the main
category to be developed and all the categories together provide details of all the
activities and supplies that are required to build, operate and maintain a wind farm.
These include consultancy, infrastructure supply (turbine, mast etc.), and
development support such as divers, vessels and storage as well as generic but
necessary items such as food, toilets and car parking.
The data was compiled using established databases, attendance lists to wind farm
information meetings, social media and online searches. The database can be split
into four areas – W Sussex, E Sussex2, Peripheral Areas, and Outside Areas. The
following table highlights the total amount of companies and the activities that can
be covered within each area and the percentage of activities that this covers overall.
A cumulative percentage highlights the total coverage as each area is added to the
1
The original database structure was designed by 4 C Offshore under a separate contract with MSE
2
Brighton and Hove are included in East Sussex as the county boundary has been used. It is possible
to disaggregate the data if needed.
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total. The ‘Gaps’ identifies the amount of activities not covered and the percentage
of the total this represents.
Number of occurrences for activities in the four areas and the percentage of total
activities covered
West
Sussex
East
Sussex
Periphery
Counties
Outside
Area
Gaps
Total
Total
Companies3
160
86
392
51
-
689
Total
Activities4
396
263
987
128
214
17745
Unique
activities6
237
198
358
89
214
-7
% Covered
28%
34%
52%
13%
31%
69%
%
Accumulated
28%
48%
67%
69%
100%
100%
Although East Sussex companies cover a higher percentage of the total amount of
activities than West Sussex, it is West Sussex that has the greater amount of
companies. There is a main cluster of companies around the coastal strip between
Worthing and Brighton although West Sussex also has clusters in the main towns of
Chichester, Haywards Heath, Crawley and Burgess Hill.
3
This represents the total amount of companies that can supply to the wind farm in each designated
region
4
This represents the total amount of activities that can be covered in each area and will include
duplication where more than one company can carry out an activity
5
This highlights the duplication of activity coverage in the database
6
This represents unique activities and where more than one company can supply the activity is only
counted once.
7
No figure can be inserted here due to the number of unique activities only applying to each
individual area and not across the entire database
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The information within the database is not detailed enough to determine if
companies can adapt sufficiently but the work undertaken does present a
reasonable picture of activity in Sussex. West Sussex has a great deal of expertise in
the support services around consultancy, design, construction services and support
infrastructure. The following table highlights the activities that can be covered by
East and West Sussex and the percentage of activities in each sector that this
represents.
Coverage of activities in E&W Sussex by sub-category and tier including the
percentage of activities covered
West Sussex
East Sussex
Category /Tier
2
3
4/5
2
3
4/5
Balance of Plant
11
51
21
6
18
45
24%
40%
19%
28%
19%
58%
Construction
Port
3
0
0
1
0
0
Project
Development
38
8
17
27
13
2
43%
32%
37%
44%
53%
6%
Installation and
Commissioning
46
2
0
32
5
0
38%
2%
28%
10%
Project
Monitoring
0
0
0
0
0
0
Wind Turbines
13
27
9
11
10
2
31%
19%
30%
25%
10%
9%
Operations and
Maintenance
18
0
0
6
0
0
Support Services
10
2
5
2
0
56%
50%
22%
50%
100%
33%
62%
29%
0
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The peripheral areas around E & W Sussex have the capability of offering many of
the services not available in the counties and support and complement the services
required.
Activities covered in each category and tier by the peripheral counties
Category/Tier
2
3
4/5
Balance of Plant
23
59
89
45%
29%
64%
4
0
0
Construction Port
67%
Project
Development
89
30
33
72%
68%
48%
Installation and
Commissioning
127
33
0
51%
38%
Project Monitoring
0
0
0
Wind Turbines
29
58
14
48%
34%
39%
Operations and
Maintenance
44
0
0
Support Services
22
6
0
41%
100%
81%
An initial breakdown of the value of procurement in the Sussex area shows that East
Sussex has a slightly higher value impact than West Sussex but many of the activities
that can be supplied are considered low value activities.
The report recommends additional research into the value of procurement in the
Sussex area utilising more comprehensive value data that includes infrastructure,
transport and workforce data to ascertain the local economic impact.
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1 Introduction and Background to the Research
The Rampion offshore wind farm is being developed by E.on Climate & Renewables
off the coast of Sussex. When complete, it will generate up to 700MW of electricity
from a sea area of 167 km2. The wind farm construction will be implemented under
several main (Tier 1) contractors to be appointed by E.on around the end of 2013.
These Tier 1 contractors will then procure a wide range of products and services
from the supply chain. On 2nd October, E.ON announced that Newhaven port would
be the operations and maintenance base for its proposed Rampion Offshore Wind
Farm if the development is granted approval. The decision was made following a
rigorous technical assessment of both Newhaven and Shoreham Ports.
E.on hopes to ensure that as much as possible of this procurement can be
contracted with companies local to Rampion, provided they can satisfy the
procurement need, but inclusion in the database does not guarantee commissioning
to the supply chain. Working in partnership with local authorities, E.on has
commissioned Marine South East to carry out a supply chain mapping and
engagement project. This comprises four major tasks:
1.
2.
3.
4.
Analysis of potential supply chain procurement needs for Rampion, based on
actual procurements for recent offshore wind farm developments (analysis
performed by 4COffshore);
Engagement of supplier interest in Rampion procurement opportunities
through a programme of awareness events, and later on through some Meetthe-Buyer events
Mapping of these supply chain procurement needs onto the supplier
capabilities within East and West Sussex and the surround areas (mapping
performed by University of Chichester);
Creation of an online supplier portal through which suppliers can register
relevant supply capabilities and contractors can find capable local suppliers.
The University of Chichester was commissioned by Marine South East to develop a
database of companies located within the Sussex region that have the potential to,
or could with minor changes; supply the Rampion wind farm from construction
through to maintenance, and through life, before decommissioning. This activity
represents task 3. The main objectives were:
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Create an electronic database of potential tier 2, 3 & 4 product or service suppliers
incorporating information from E.ON, The Crown Estates and local authorities. The
database will include contact details, a short description of current activities,
capacity and capability.
Identify South East England based companies having capabilities that can be
adapted and enhanced through development or diversification to fulfil key
parts/capability gaps in the supply chain requirement.
The output from these two activities is explained in the following report.
On 2nd October, E.ON announced that Newhaven port would be the operations and
maintenance base for its proposed Rampion Offshore Wind Farm if the
development is granted approval. The decision was made following a rigorous
technical assessment of both Newhaven and Shoreham Ports.
The move could create up to 85 full time permanent jobs with the majority being
recruited locally. It would also see part of Newhaven Port being modernised and
redeveloped through E.ON’s investment in the new facility, which would support the
operation and maintenance of the proposed offshore wind farm.
The operations and maintenance base would contain office space, equipment
storage and vessel mooring which will be used by a team dedicated to operating and
maintaining the wind farm for the lifetime of the project. A separate planning
application will need to be made to the local planning authority for the O&M site
before the development could take place.
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2 Database Development
The database format was taken from the original database that was designed and
developed for this project by 4C Offshore. The original database was designed in
Microsoft Access but for ease of updating and for future use this has been exported
to Microsoft Excel. The original database included specific fields (see table 1)
including details of the activities each company carried out.
Table 1 Data Fields and Explanations
Field
Explanation
SupplyChainModelId Unique internal identifier
ShortDescription
Short Description of the product/service
LongDescription
Long description of the product/service. Sometimes these
are quite extensive, otherwise they are brief or absent,
depending on the amount of detail available or required.
PercentValue
The percentage of the parent contract value relating to this
activity.
ParentId
The Supply Chain Model Id of the parent record – used to
create a recursive link up the hierarchy
Alias
An alias for this product/service to be used in calculating the
position (see below) e.g. CPX is the alias for CAPEX
PathTo*
The path to this product/service in the hierarchy, e.g. OWF
CAPEX > Wind turbines > Towers > Electrical system
Depth*
The depth of this product/service in the hierarchy e.g. 3
Position*
The code, or position of this product/service in the hierarchy,
e.g. CPX.TUR.4.1
The model developed by 4C contains three main categories:
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OWF CAPEX. This refers to all capital expenditure on the project, including
development and construction. Estimated CAPEX cost for a typical project is
provided in the OWF CAPEX model entry.
OWF OPEX. This refers to running costs of the project so is an annual cost.
Estimated annual cost for a typical project is provided in the OWF OPEX model
entry.
OWF SUPPORT SERVICES. These have been included for purposes of completeness.
They are activities and products that are highly cross cutting and relate to multiple
entries. They have not been quantified. Examples include hotels and training. In
some cases, e.g. Weather forecasting, they have been included in some CAPEX
estimates.
These three categories have been further disaggregated to include eight subcategories. These are:
Balance of Plant
Construction Port
Project Development
Installation and Commissioning
Project Monitoring
Wind Turbines
Operations and Maintenance
Support Services
Each of these sub-categories contains all of the activities necessary for the main
category to be developed and all the categories together provide details of all the
activities and supplies that make up a wind farm from conception to
decommissioning. These include consultancy, infrastructure supply (turbine, mast
etc.), development and development support such as divers, vessels and storage as
well as generic but necessary items such as food, toilets and car parking.
Although this provides a clear understanding of the separate parts of a wind farm
supply chain it does also mean there is a certain amount of repetition of activities
across the eight categories i.e. personnel, catering and office equipment are
accounted for in most categories. This allows for a company to supply to the same
activity across the entire wind farm supply chain but also means the company is
entered more than once into the database.
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2.1.1 Tier Structure
It is important to mention the manner in which the tier structure for the database
was developed. As with all supply chains the number of tiers depends on the depth
and complexity of the work breakdown structure for each sub-section. This means
that the lower tiers may sometimes be a tier 2 in one activity but tier 5 in another –
an example of this is food supply and catering: ‘Food’ appears as a tier 2 and 3 and 4
in the database depending on which of the 8 sub-categories it is in. This limits any
analysis of tier structure as the tier does not necessarily relate to a sector or
differentiate between a support service and/or necessary component. Analysis of
specific activities or sectors will be the main depth analysis looked at in this report.
2.2 Data Compilation
Originally, the database had 692 activities within the eight categories in the model.
This has been increased to include three other activities – Communication (general),
Oil Spill, and Navigation. This was seen as important as these three aspects appear
to have a general but fundamental impact on wind farms and are not part of the
original support network. The database has been split to account for West Sussex,
East Sussex, Peripheral Counties, and Other areas. Both postcode and address
provide the basis for location therefore disaggregation by local authority proved
difficult. The data can be searched by town to further disaggregate the data but for
the purposes of this report the four areas described have been used.
During the data collection phase of the project various press releases and
promotional events took place around Sussex and these attracted companies from
further afield to register an interest. These companies have been included as
requested but are highlighted as being out of area.
The database development included various forms of data search. This included
aggregating different wind farm databases into the Rampion format as well as online searches. E.ON supplied a database of companies that had contacted them for
consideration and this was included in the development along with those companies
that had been identified by the University of Chichester through the CAMIS project
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to have a role in offshore renewable energy. Data generated from social media –
specifically LinkedIn – and the Marine South East newsletter was also added. Each
company that attended an information event held by Marine Southeast and E.ON
were also included in the database. The number of companies found, and activities
assigned, by these varying methods are shown in table 2.
Table 2 Data Source
Origin
Activities
Companies
On-line searches
685
302
LinkedIn (MSE)
85
35
E.On Supply Chain
772
33
UoC Database
398
310
Events – organized by MSE for the E.ON Supply Chain Project
1/ Chichester
110
56
2/ Newhaven
95
44
3/ Seaworks
75
39
4/ Shoreham
111
53
There was significant duplication of companies as many of those companies who
were able to attend the events had also tended to inform the MSE and the LinkedIn
site. The CAMIS database is also a comprehensive dataset that contains the majority
of maritime businesses along the south coast and was used to inform companies of
the up and coming events. Duplication was therefore inevitable.
It is clearly apparent from the table that compared to the other sources of data the
original E.ON database of suppliers are capable of supplying a considerable amount
of the materials and services that will be necessary. The UoC database has provided
the largest number of companies to populate the database but these companies are
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limited in the amount of activities they can potentially deliver. A high level of
interest from potential suppliers has been generated by a sequence of workshops
organised by Marine South East. These were held in Chichester, Shoreham and
Newhaven over the beginning of 2012. A total of 165 companies attended these
events, and 33 went on the attend specialist training on bid and tender preparation
organised by Marine South East.
During 2013, this engagement will be advanced further through a number of Meetthe-Buyer type events. These will provide an opportunity for potential suppliers to
hear first-hand about specific contractor requirements and pre-qualification criteria.
The on-line searches and ‘new’ data that were discovered have managed to fill many
of the gaps.
2.3 Adapting to Supply
One aspect that was required by the project definition was that of identifying
companies that could, with a little adaptation of operations, supply to the wind farm
if necessary. The objective behind this was to ensure that where activities could not
be covered by an established supplier there would be options for the wind farm to
contract to a local company who would be willing and able to adapt their operations
to supply the necessary items. This proved to be a difficult activity to carry out for
the following reasons.
Few companies actually supply to wind farms currently, although many are able and
willing, therefore the majority of the companies listed in the database could be seen
as needing to adapt rather than be established.
The most common response when asked if adaptation would be needed was ‘No’.
This was seen as being due to reluctance to let any potential work slip to a ‘more
established’ firm in the database.
Adaptation may have been needed for a variety of reasons and these would have
required a considerable difference in cost and ability with some changes requiring
minimal cost and others excessive costs. Some of the common reasons are outlined
below.
o Machinery changes
o Personnel and/or skills
o Changes to transport or logistics
o Software
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o Space requirements etc.
Many companies could currently supply in some activities and could potentially
supply to another. Differentiating between the two abilities was not something that
was possible in the database.
It was therefore decided that unless the company would need radical changes to
support the wind farm, or they could not currently supply at all, they would be listed
as a supplier. Those companies who did require adaptation are listed in the
database with the inclusion of a ‘L4’ entry.
2.4 Database Maintenance
The database that has been devised is robust and detailed. It is important that it is
maintained in order to remain an efficient data source. The database can support a
web based portal and could be used by all major stakeholders. Companies could
locate other companies for collaboration, increased supply access and new markets.
Local Authorities could use the database to target specific information, incentives
and opportunities. E.ON could utilise the data for the purposes of developing the
wind farm.
Future plans include a portal development for the purposes of procurement and
information dissemination. It is proposed that the database designed for this project
will be used as a tool going forward.
3 Database Analysis
There are a total of 689 individual companies listed in the database – and due to a
continuous open feed via E.ON and MSE for more information this number will
continue to grow. The following table (Table 3) highlights the total amount of
companies and the activities that can be covered within each area and the
percentage of activities that this covers overall. A cumulative percentage highlights
the total coverage as each area is added to the total. The column ‘Gaps’ identifies
the amount of activities not covered and the percentage of the activities this
represents.
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Table 3 Total amount of companies and activities included in the database
West
Sussex
East
Sussex
Periphery
Counties
Outside
Area
Gaps
Total
Total
Companies8
160
86
392
51
-
689
Total
Activities9
396
263
987
128
214
177410
Unique
activities11
237
198
358
89
214
48212
% Covered
28%
34%
52%
13%
31%
69%
%
Accumulated
28%
48%
67%
69%
100%
100%
More than 1,700 activities are covered and a total of 69% of all activities – although
there are many activities that are covered by more than one company and not all
activities are able to be supplied in the local area. The database has been split into
four areas: West Sussex, East Sussex, Peripheral Counties, and Outside Areas. The
majority of companies in the ‘Outside Areas’ database are those who expressed a
8
This represents the total amount of companies that can supply to the wind farm in each designated
region
9
This represents the total amount of activities that can be covered in each area and will include
duplication where more than one company can carry out an activity
10
This highlights the duplication of activity coverage in the database
11
This represents unique activities in each area and where more than one company can supply from
that area the activity is only counted once. There may be duplication across the areas but this is
represented in the total where each activity across the database is counted only once.
12
This is a total of the unique activities covered and not a total of each areas unique activity.
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desire to be included and those who were already part of one of the databases that
were used to generate this research. The main analysis for this report takes the
areas of East and West Sussex before highlighting the trends to be found in the
entire database.
There are certain assumptions that should be made for the purposes of
understanding the following analysis.
1. East and West Sussex includes only companies located within the county borders of
each county
2. East Sussex includes Brighton and Hove
3. Peripheral Areas accounts for companies in the Southeast of England including Kent,
Surrey, Hampshire, and the Isle of Wight
4. Outside Area contains all other companies located within the UK
5. Many of the activities are duplicated through the categories therefore there may be
companies that serve more than one activity but essentially the activities are the
same – i.e. food appears in more than one category and a company will be listed a
number of times throughout the database for this one activity
6. Discrepancies in coverage
a. Few companies but lots of activities covered - Many companies can
undertake more than one activity within the database therefore there may
be a limited number of companies in the area that have the ability to target
wind farm activities but the overall coverage of activities is high.
b. Lots of companies but few activities covered - There are many occasions
where more than one company can supply a particular activity therefore
there may be an increased number of companies and times an activity is
covered but the overall coverage of activities may be low.
The following analysis will also include explanations of the criteria used to calculate
the figures shown in the tables.
3.1 West and East Sussex
The following maps highlight the coverage of companies within West Sussex (figure
1) and within each tier (figure 3). Each marker represents a postcode therefore if
more than one company shares a postcode there will only be one marker shown.
There are a total of 160 companies within West Sussex that are entered into the
database and these companies can supply to 396 activities covering 28% of all
activities necessary.
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Figure 1 Companies in the database located in West Sussex
There are clear locational clusters of companies able to supply the wind farm in the
Crawley, Shoreham, Worthing/Lancing, Burgess Hill, Haywards Heath and Chichester
areas. The majority of companies sit along the main arterial routes or the coastline.
Although this map provides a spatial awareness of the business coverage in West
Sussex it does not identify the types of companies that are shown or any details on
what they represent. An interactive version of this map would allow each ‘dot’ to be
opened for additional details and this could be placed within a portal and supported
by the database. Figure 2 highlights the information that is given when the data is
interactive using Google Fusion13
13
Google Fusion allows the user to upload databases and, using postcode as location, map each
entry.
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Figure 2 Interactive mapping using Google Fusion Tables
The information shown on the map can be adjusted to include specific details such
as address and brief description and any information that is not required can be
screened out.
Figure 3 highlights the location of companies and the tier that each one represents.
Tiers 1 & 2 are quite well represented and the tiers are evenly spread throughout
the county. It is worth highlighting the previous comments regarding the tier
structure and the limitations that this presents. Where Tier 0 is highlighted this
represents an overarching policy and support role i.e. council, advisory service,
government department etc. that provides more than just individual activities or
consultancy.
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Figure 3 Company location and tier representation in West Sussex
Where: yellow = tier 1, blue = tier 2, pink = tier 3, green = tier 4, and red = tier 5. The
four large icons are the main category tier 0 and provide advice and support
The main category for tier 1 in West Sussex lies in the Support Services with the
majority of activities necessary covered within the county. There are also a large
proportion of tier 1 companies in the Project Development and Construction of Port
categories. West Sussex appears to have expertise in development services such as
consultancy, business support and local authority support using established support
companies and an established Port. Tier 2 is evenly spread but Installation and
Commissioning features prominently.
The following map (figure 4) highlights the picture that is to be found in East Sussex.
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Figure 4 Company Location in East Sussex
Whereas West Sussex appears to have distinct clusters of companies in most of the
large urban areas the majority of businesses in East Sussex are in the southwest of
the County in the Brighton, Hove and Newhaven areas. This highlights the
importance of the SE of West Sussex and SW of East Sussex as a potential
geographic cluster for wind farm supply chain activity. The actual area stretches
from Worthing in the west to Newhaven in the east. Figure 5 highlights the
companies in East Sussex according to the tier they represent.
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Figure 5 Company location and tier representation
Where: yellow = tier 1, blue = tier 2, pink = tier 3, green = tier 4, and red = tier 5. The
four large icons are the main category tier 0 and provide advice and support
As with West Sussex, the coverage of the tiers in East Sussex is fairly evenly spread
both across the county within the tier structure. Due to the agglomeration of
companies around the SW it is beneficial to visualise this area in detail. This could be
completed for other areas in the database as well. Figure 6 takes a closer look at the
SW area.
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Developing a Local Supply Chain: Rampion Wind Farm
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Figure 6 Company Location in the SW of East Sussex and Tier Represented
Where: yellow = tier 1, blue = tier 2, pink = tier 3, green = tier 4, and red = tier 5. The
four large icons are the main category tier 0 and provide advice and support
The majority of companies are located along the main arterial roads and the town of
Newhaven. Brighton Marina also features as a location for wind farm supply. East
Sussex appears to have fewer companies within the county that can supply a wind
farm and although this is true, it is also important to note that some of the large
companies that can address a wealth of activities are also present. These include
Elmeridge Cable Services and Mott MacDonald in Brighton, Atlantic Marine, Hove,
and Coussens (Cranes) in Bexhill.
3.1.1 Conclusions
There is a fairly even spread of tiers in both East and West Sussex and the location of
companies within both counties tends to be around the main road network and
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Developing a Local Supply Chain: Rampion Wind Farm
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urban areas. West Sussex has more individual companies that can supply the wind
farm whereas the companies in East Sussex can provide for more of the activities
per business. The following section looks at the activity coverage per area and the
gaps in provision that can be accounted for. The analysis centres on tiers 2, 3 and 4
due to the amount of companies that could potentially supply at this level.
3.2 Sussex In-Depth
It appears from the database that East and West Sussex complement each other
with regards to the supply of activities associated with the wind farm. Due to the
location of Elmeridge Cable Services in East Sussex the county has good coverage of
the actual supply of cabling. West Sussex has a good coverage of the support
services such as safety and communications necessary for cabling. West Sussex can
supply more infrastructure support requirements to the development of the wind
farm whereas East Sussex has more industry around the actual infrastructure
necessary for the Balance of Plant sub-category.
Both counties are well placed to supply to the wind farm through the Project
Development sub-category. Consultancy, design, research and survey assessments
are all well catered for. West Sussex can contribute to the Met Station activities and
both counties can service the geophysical and geotechnical aspects.
The Installation and Commissioning sub-category has many gaps within the main
cable and substation activities but the majority of cabling support for this major
activity can be covered. This includes the dredging and supply of vessels, aggregates,
diving support and sea based support. Monitoring in the form of noise, mammal,
fish and coastal processes can be covered to some degree but the National
Oceanographic Centre in Hampshire has a wider range of experience of supplying
these activities.
There is limited cover of activities in the Wind Turbine sub-section but this was
expected due to the lack of support in this area nationally. Support on the more
generic activities of this sub-section can be found in the counties, especially around
the electrical systems and support activities. The sub-section Operations and
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Maintenance has better coverage in West Sussex but this is also around the support
activities rather than the provision of large components and vessels.
Both East and West Sussex are well equipped to service the Support Services
activities with the majority of these activities covered by at least one company and
in some instances many more. West Sussex can facilitate 395 activities in total
whereas East Sussex can cover 263.
The following section looks at the database as a whole and highlights the activities
that can be covered over the entire database.
4 Analysis of the Data Set
The main data set has been disaggregated in to four spatial areas. The following
section analyses each area and provides comparison.
Table 4 identifies the eight categories (and the additional section for
Communication, Oil spill and Navigation) and shows the amount of activities that
can be covered by each area. A table for those activities not covered is included later
in this section.
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Table 4 Total Activities covered by Companies for each category in each area
Category
West
Sussex
East Sussex Periphery
Counties
Outside
Area
Total
Balance of
Plant
89
72
185
20
366
Construction
Port
20
13
36
1
70
Project
Development
82
67
204
36
389
Installation and
Commissioning
55
48
209
40
352
Project
Monitoring
2
3
7
1
13
Wind Turbines
50
24
117
7
198
Operations and
Maintenance
27
13
71
8
119
Support
Services
62
22
105
15
203
Navigation
5
0
28
0
33
Oil Spill
1
0
11
0
12
Communication 3
1
14
0
18
Total
263
987
128
1773
396
It is quickly apparent that the peripheral counties can provide a significant
proportion of the activities necessary. This is mainly due to the Solent area of
Hampshire and the location of one of the countries busiest ports and subsequent
commercial infrastructure.
Each activity sector contains a different amount of activities therefore it is not easy
to see from the table how many of the activities are actually covered. In many
instances there are a variety of companies that can cover a specific activity giving a
choice of supplier. An example of this is Project Development: In the sub-category
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Project Development there are 120 individual activities that could be supplied to.
The database includes companies that can supply this categories activities 389
times, but, not all activities can be covered, and many are able to be supplied to
many times by different companies. The following table (Table 5) identifies the
number of companies in East and West Sussex that can carry out the activities in
each sub-category, and tier, and the percentage of activities that each sub-category
and tier contains that can be covered.
Table 5 Total of Companies covering activities and percentage of activities covered
in each tier In Sussex
West Sussex
East Sussex
Category /Tier
2
3
4/5
2
3
4/5
Balance of Plant
11
51
21
6
18
45
24%
40%
19%
28%
19%
58%
Construction
Port
3
0
0
1
0
0
Project
Development
38
8
17
27
13
2
43%
32%
37%
44%
53%
6%
Installation and
Commissioning
46
2
0
32
5
0
38%
2%
28%
10%
Project
Monitoring
0
0
0
0
0
0
Wind Turbines
13
27
9
11
10
2
31%
19%
30%
25%
10%
9%
Operations and
Maintenance
18
0
0
6
0
0
Support Services
10
2
5
2
0
56%
50%
22%
50%
100%
33%
62%
29%
0
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Comment [DC1]: Maybe worth
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Developing a Local Supply Chain: Rampion Wind Farm
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Sometimes there are a greater number of companies that can carry out a particular
activity but the overall coverage of activities can be quite low. This is due to either
there being a lot of activities within the category and tier or a number of companies
that can supply to one particular activity.
From the table it can be seen that the main gaps appear to be in the Installation and
Commissioning, Project Monitoring and Wind Turbines. This is an unsurprising result
and not necessarily something that should be tackled at a local level. All of the other
categories are fairly well covered but an understanding of whether the gaps are
specific to an industry sector or a gap in a range of areas would enable both E.ON
and the Local Authority to decide if the gaps could, or should, be filled through
incentivising or facilitating new business or business relocation.
It would also be interesting to know if the gaps can be covered from outside of
Sussex and Table 6 identifies the total amount of companies and percentage of
activities that are covered in those counties adjoining Sussex (Peripheral Area). This
is particularly interesting when it is remembered that East and West Sussex are
bordered by two main industry areas:
Kent has experience of off shore wind farms through the positioning of the London
Array and other wind farms
Solent, Hampshire, is one of the hubs for marine and maritime sector including
major manufacturing and research centres
The forth dataset categories ‘other areas’ has not been included as many of these
companies are as far afield as Scotland.
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Table 6 Total of Companies covering activities and percentage of activities covered
in each tier in Adjoining Counties
Category/Tier
2
3
4/5
Balance of Plant
23
59
89
45%
29%
64%
4
0
0
Construction Port
67%
Project
Development
89
30
33
72%
68%
48%
Installation and
Commissioning
127
33
0
51%
38%
Project Monitoring
0
0
0
Wind Turbines
29
58
14
48%
34%
39%
Operations and
Maintenance
44
0
0
Support Services
22
6
0
41%
100%
81%
On their own the peripheral areas can cover a large majority of the activities that are
necessary. If this data was combined with the East and West Sussex data it would be
possible to see which activity sectors are covered and which need support from
elsewhere.
The following table (Table 7) highlights where the gaps are and the percentage of
activities that are NOT covered in the database. There are a total of 695 individual
activities (including the three added activities) of which 32% cannot be covered; or it
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has not been possible to identify companies; either within West or East Sussex or
the peripheral areas.
Table 7 Gaps in the database- number of activities not assigned to companies and
the percentage of total activities this represents
Category/Tier
2
3
4/5
Balance of
Plant
8
45
20
38%
48%
25%
Construction
Port
0
Project
Development
6
1
13
13%
5%
37%
Installation
22
and
30%
Commissioning
23
0%
56%
Project
Monitoring
0
Wind Turbines
12
56
10
37%
56%
42%
0%
Operations
and
Maintenance
2
Support
Services
5
0
26%
0%
9%
The areas that are underrepresented are Balance of Plant, Installation and
Commissioning, and Wind Turbines. Overall coverage appears to be good and the
inclusion of the peripheral areas has reduced the amount of activities needing to be
covered quite considerably in some places.
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4.1 Value of Supply
The values of procurement for the activities within the supply chain are identified
for all those activities that have a significant cost. The values that have been
identified are estimated cost contribution from a generic wind farm model and not
specific to the Rampion site. The breakdown of value has been ascribed to the
different categories and subsequent tiers. Therefore:
100% of procurement value is split between the eight categories
o Three categories have no value assigned – Support Services and
Operations and Maintenance and Project Monitoring. This is due to
each category contributing an estimated 1% or less to the overall
cost.
Where a category has a percentage of total value this is then split between
the tiers
o Mainly tiers 1 and 2 but sometimes tier 3
The value is sometimes split further within the tier
o depending on the size of the tier and the value to be split
The following graphs highlight the split between the different categories and the
further disaggregation between the individual categories for the value of
procurement. Figure 7 shows how much of the total cost of a wind farm
procurement is ascribed to each category.
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Figure 7 the % value of the total cost of procurement between the categories
% of Total Cost
Balance of plant
33.31
Construction port
42.73
Project Development
Installation and
Commissioning
1.6
Wind turbines
4.29
18.07
The turbines are the highest value item in a wind farm supply chain with the balance
of plant taking the next largest share. Although installation is a high value set of
activities it is only a fifth of the total cost of developing a wind farm.
Balance of Plant is further split to include the main activities within tier 1. This is
shown in figure 8.
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Developing a Local Supply Chain: Rampion Wind Farm
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Figure 8 the % value of the total cost of procurement for Balance of Plant
% of Total for Balance of Plant
16.2
Cables
13.2
Offshore Substation
Onshore Substation
Turbine foundation
64.2
6.4
This highlights the high cost of supplying the turbine foundations for the production
of electricity from a wind farm. Sussex can supply in many of the areas that have
significant value. It is possible to see where the main tier one value is distributed
between both the categories and the counties. Table 8 shows the actual value of the
main categories followed by the percentage share for East and West Sussex at the
tier 2 level and the total value that this represents as a whole. Both East and West
Sussex have many of the lower tiers for Construction of Port which is valued at only
1.6%. To understand the total value of these activities in the local area would
require deep drilling into the data which is not possible under this current remit.
What can be provided is an estimation of the value at tier 2 for each county. Firstly
the value allowance needs some explanation.
4.1.1 Data value disaggregation
As highlighted in the introduction to this section the value of procurement is only
assigned where the value is more than 1% of the total for the category. Only 5 of the
8 categories have values assigned at the tier one level and only 4 of these categories
have any values assigned beneath this tier. In effect, the value of the lower tiers is
an estimation of the value of the sub category that is then a percentage of the total
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Developing a Local Supply Chain: Rampion Wind Farm
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value of the category which is a percentage of the total of the wind farm
development. This can be highlighted as shown in figure 9.
Figure 9 Value distribution
Wind Farm
100% split betwen OPEX
& CAPEX
Opex
100% split at tier 1
Wind Turbines
Valued at 42.73
Tiers 1-3
100% for each tier &
category within the tier
Installation &
Commissioning
Valued at 18.07%
Tiers 1-3
100% for each tier & category
within the tier
Capex
Support
100% split between sub categories
and high value tiers
Balance of Plant
Not valued
Construction of
Port
Valued at 33.31%
Tiers 1-4
100% for each tier & category
within the tier
Valued at 1.6%
Project
Development
Valued at 4.29%
Tiers 1-3
100% for each tier &
category within the tier
Therefore an activity that is placed as a tier 2 (where there are 4 subcategories
within the tier) will be the % value given at that level, of the sub category % total, of
the % value of the tier 1 category, of the % value of the total wind farm. An example
of this can be seen below:
Ornithological environmental survey is valued at 25.9% at tier 2. This is:
25.9% of 2.2% (the value of tier one) of 4.29% (the value of the category at
the level of the total wind farm:
This gives a total value of the ornithological environmental survey as 0.024%
of the total value of the wind farm.
If the total value of the wind farm is £2billion then the value of the ornithological
environmental survey will be 0.024% of this: £480,000.
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The next section will look at the tier 2 value of the Installation and Commissioning as
this is an area that both East and West Sussex can supply to.
4.2 Value of Procurement for East and West Sussex
Project development has already commenced therefore looking at the possible
income for this area is circumspect. The majority of Balance of Plant and Wind
Turbines are sourced from outside the area. Construction of Port has a low value of
1.6% overall and does not disaggregate to the lower tiers. As the port has now been
agreed as Newhaven, the majority of the value for this category will come to East
Sussex.
Installation and Commissioning is a fairly high value category where the value has
been disaggregated through the tiers. It is therefore possible to estimate a value to
each county if the Tier one companies sourced their requirements from the local
area.
Table 8 highlights the approximate value to both East and West Sussex in this
category at tier 2.
Table 8 Value of procurement for Sussex
Category
Total
value of
category
(%)
18%
Installation
and
Commissioning
Approx value
£360Mil
based on a
total £2b
spend
East Sussex
County
share of
value at
Tier 2 (%)
24%
West Sussex
Total County County
Total County
value of
share of
value of
procurement value at
procurement
at Tier 2(%)
Tier 2 (%) at Tier 2(%)
4.3%
22%
4%
£15mil
£14.5Mil
The table highlights the capacity of each county to provide to the tier one
procurement companies at tier 2 within the Installation and Commissioning
category. It is important to remember that there is duplication across the counties
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therefore it is highly improbable that each county could attain this amount of
procurement as the activity may not be distributed to more than one company –
and if it was, the value shown is the total value and would therefore reduce to allow
for this.
Project Development, although now mainly completed as the Rampion development
is underway, is also a category that both East and West Sussex have ability in and
may have secured procurement opportunities in. This category is mainly surveying
and consultancy. Figure 8 identifies the split between the main activities for tier one
in the Project Development category.
Figure 10 % split for the Project Development Category
% of Total for Project Development
8.3
0.8
Other
18.2
Coastal process surveys
2.5
Development Services
Environmental survey
33.1
Front end engineering and
design
24.7
Geophysical surveys
Geotechnical surveys
3.3
2.5
6.6
It is important to note that a portion of this development work has already been
commissioned and work is already underway to further the progress of the Rampion
wind farm.
Services and support areas are not included in the value calculations. Due to the
strength that East and West Sussex have shown in the support service area the
ability to represent the true value of the supply chain opportunities for the counties
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is somewhat limited. It is recommended that additional work is carried out on the
value of the supply chain that includes size, distance and infrastructure needs.
4.3 Summary of Gap Analysis
There are a significant amount of companies in the Sussex and peripheral areas that
can supply to the development of the Rampion wind farm. Where gaps have been
located they have tended to be in the Wind Turbine and Installation sub-categories.
A greater understanding of the gaps can be seen by analysing them by sector, tier,
component size and relevant transport costs but to carry out this analysis it would
be necessary to know the size of the item, the number that would be needed, the
frequency that they would be purchased and the technical aspects of transport and
logistics that would be necessary to provide them.
Where gaps have been identified it may be possible to identify companies that could
undertake the work, but it would require a more detailed evaluation than was
funded and that it might be better addressed using market dynamics with a
procurement process focused on the local area.
5 Conclusion and Recommendations
The data collected has enabled a greater understanding of the support available
within the area of the planned wind farm – Rampion. Analysis has shown that the
local area can provide good support and, including the peripheral areas, allows for
more than two thirds of the supply activities to be covered. The strengths of the
region are in support services and support infrastructure and not in the supply of
the turbines themselves. Estimates around the value of the supply chain show that
there is a potential £15mil of procurement in the Installation and Commissioning
category but duplication across the counties will mean it is highly unlikely this figure
could be attained.
The research has shown there are many small companies that can and want to
supply to a wind farm and this supports the findings of previous studies in the area
and on the maritime sector as a whole. The majority of companies are eager to
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adapt in order to support a wind farm development, although what adaptation
would be needed varies between companies.
The database can be used to keep the industry informed of progress and should, if
maintained, provide a resource for the development of the wind farm.
5.1 Recommendations
The database that has been created is considered unique in that it not only provides
the contact details of relevant suppliers but also assigns them to specific tasks
within the development of a wind farm. The database has been designed and
maintained in such a way that it could be used to support a local wind farm portal.
This portal could provide relevant news and information of the Rampion Wind Farm,
progress reports, and legal and environmental advice for potential suppliers. The
database could provide the directory necessary for companies, local authorities and
E.ON to search and utilise for a variety of reasons including
Searching for specific companies or components
Developing internal supply chains
Targeting specific industry sectors
Identifying cluster potential
The mapping tool can be installed on the portal to support transport and logistics
information and for ease of identifying location for collaborative activities.
It is recommended that any portal development includes the ability for companies
to communicate through a forum to increase the potential for knowledge transfer,
market development, and innovation. It is important that the database is
maintained to reflect any changes in company location and ability to supply. This
could be achieved by requesting companies ‘take ownership’ of their data entry and
by allowing companies to register themselves into the database online.
Now E.ON are working within the development phase of the wind farm the database
would provide the tool for locating potential suppliers. As development increases
the amount of companies who are willing to adapt to supply the wind farm will
increase and will request access and inclusion into the database. It is anticipated
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that some of the gaps that are currently apparent will be filled as the project
progresses. How these companies are able to access the database/portal and how
the database is maintained is something that requires consideration.
It is possible that the development of a portal will increase the potential for cluster
activities to take place. Once companies are aware of a useful resource such as a
portal one of the initial barriers to clustering – that of awareness of where potential
growth and development opportunities within a supply chain can be sought – will
have been overcome. It is recommended that maintaining the database and portal
would increase the potential for a natural cluster to develop.
It is further recommended that consideration is given to developing the
understanding of the database potential through an in-depth study on how each
component contributes towards the supply output. This would involve looking at the
approximate cost of the product/service, the contribution to the overall cost of the
wind farm, the size and amount of items as well as frequency of need and the
transportation costs. This further develops the initial value of procurement that has
been carried out in the report. A study of this sort could potentially reduce overall
costs, increase local employability and impact on urban congestion during the
development phase. The study would also highlight collaborative activities that
could occur through the supply chain and develop knowledge transfer and
innovation. The impact could also increase environmental and economic
sustainability along the supply chain and within the local area.
5.2 Concluding Comments and Action Points
This report has outlined the development of a comprehensive database of
companies that are able to supply to the Rampion Wind Farm. It has also highlighted
where the strengths and weaknesses of the supply chain currently lie and
recommended courses of action to increase the possibility of filling the gaps.
Although completed, the actual population and evaluation of the database should
be considered as on-going. The list is never going to be definitive and the
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opportunities for increasing the local aspect of the supply chain and developing the
sector will increase as the wind farm develops.
A high level of interest from potential suppliers has been generated by a sequence
of workshops organised by Marine South East. These were held in Chichester,
Shoreham and Newhaven over Q1 2012. A total of 165 companies attended these
events, and 33 went on the attend specialist training on bid and tender preparation
organised by Marine South East. During 2013, this engagement will be advanced
further through a number of Meet-the-Buyer type events. These will provide an
opportunity for potential suppliers to hear first-hand about specific contractor
requirements and pre-qualification criteria.
Utilising and developing the value estimates in the database will increase the
understanding of the impact of the supply chain on the local area in terms of
employability, infrastructure, skills and policy development. It is highly
recommended that consideration is given to this more in depth study.
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