Photovoltaic projects have a shorter construction cycle and relatively simple engineering compared to thermal power projects. With the rapid development of domestic photovoltaic power generation projects in recent years, the EPC mode of general contracting for photovoltaic projects has become more and more widely used. This paper analyzes the EPC mode by comparing the EPC mode with the owner's sub-bidding mode, and hopes to discuss with the industry.
1 EPC mode introduction
EPC mode refers to "engineering design-procurement-construction general contracting" mode, in which a company with EPC qualification is entrusted by the project owner to carry out the whole process of engineering project design, procurement and construction contracting. The general contractor is responsible for the quality, safety, cost and progress of the contracted works under the fixed contract price.
2 Advantages of adopting EPC model
In the EPC mode, the owner is responsible for the safety, schedule control and quality and progress control of the project by general contracting the engineering design, procurement, construction and services to the EPC general contractor. By adopting the EPC model, the project general contractor can apply the advanced management experience to the project construction in a more mobile and flexible way, thus creating more economic benefits for the owner and the contractor; at the same time, it also further improves the work efficiency, reduces the amount of project coordination and speeds up the project supervision; in addition, the project adopts a lump-sum contract, which makes the project reduce many unforeseen costs and makes the project The final total cost and duration have greater controllability.
At present, the common engineering construction methods for projects are divided into EPC mode and owner's sub-bidding mode. Compared with other types of power projects, the construction of photovoltaic power generation projects is characterized by short construction period, fast grid connection, many operation points and wide operation area. Comparing with the most common EPC mode and owner sub-bidding mode, the advantages of EPC are mainly.
(1) Project design advantage: In EPC mode, engineering design is the first step to focus on the design stage and the beginning of quality and investment control to reasonably control the construction period, investment and project risks.
(2) Project cost advantage: with the quantitative advantages of the contractor's scale procurement equipment and long-term cooperation construction units, the overall cost can be controlled, and the single price may be lower than the owner's single bidding price, thus reducing the project cost.
(3) Advantage of duration and linkage: EPC unit is responsible for the implementation of the whole project, which is conducive to overall planning and coordinated operation of the project as a whole, effectively solving the interface between design and construction, and coordinating the relationship between practicality, technicality and safety in the construction plan, making the project duration compact and smooth.
(4) Quality and project risk control advantages: By adopting EPC mode, the main body responsible for the quality of construction works is clear, which is conducive to pursuing the responsibility of project quality and determining the bearer of project quality responsibility, and the related risks are mainly borne by the contractor, with less risk on the owner's side. In addition, by adopting a holistic and fixed lump sum price bidding method, contractors with excellent quality, reasonable quotation and high management level are preferentially selected to further reduce and control project risks.
(5) Streamlined staffing and talent training advantages: By adopting EPC mode, the owner will be freed from the point-to-point specific affairs, focus on the major factors affecting the project, ensure the general direction of project management, and guarantee the smooth, orderly and efficient advancement of the project. At the same time, through communication with the relevant experienced professionals of the contractor, it can help the owner unit to improve the professional level of relevant engineering management personnel and help the owner unit to cultivate the corresponding professional management talents.
3 Disadvantages of adopting EPC mode for the project
(1) The control of project construction will be constrained. Adopting EPC general contracting mode, it will encounter that the EPC general contractor will subcontract part of the project, and the subcontracting unit is directly contracted with the general contracting unit. Although the contractor has a contractual relationship with the general contractor, it will be constrained in the actual construction of the project because it does not have a contractual relationship with the subcontractor.
(2) The contractor bears a greater risk, so the profit and quality of the project depends entirely on the experience and level of the EPC project contractor.
4 The advanced nature of adopting EPC model
EPC model is a popular international engineering project management model, which relies on professional subcontractors to achieve high efficiency and quality in design, procurement and construction with standardized process control and procedures. Thus, the "turnkey" project is realized.
5 Thinking about the risk prevention and control of EPC mode
5.1 Possible risks of EPC mode
(1) The integration of design, procurement and construction requires high qualification and project experience of contractors. If a unit with poor standard wins the EPC bid, it will have a greater impact on the quality of the project.
(2) During the construction process, if the owner party does not intervene in the EPC process deeply enough, it may affect the owner unit's control over the project.
5.2 Measures for risk response
5.2.1 EPC project owner risk response strategy
(1) In the bidding stage, the owner should provide the expected objectives, functional requirements and design standards comprehensively and accurately to reduce possible omissions and errors, thus avoiding or reducing contract changes.
(2) In the selection of the contractor, it must not only have the ability to complete the design, procurement and construction of the entire project, but also meet the owner's requirements in terms of schedule control and bid price. When selecting a contractor, the owner can give the bidder detailed information and more adequate preparation time, so that the contractor can more fully assess the project risks.
(3) Detailed and thorough preparations should be made during the development of the general contract. By asking professionals with extensive engineering experience to help with contract technical and construction program requirements. Ask legal professionals to review the contract for legal risks. By preparing a rigorous contract, project risks and dispute control will be foreseen in advance, so that the actual construction of the project can be based on rules and regulations.
5.2.2 Response strategies for contractor risks in EPC projects
(1) In carrying out the bidding stage, the bidder should strictly examine the owner's financial situation. Conduct detailed understanding and investigation of the project location so as to prepare the tender offer carefully.
(2) During the contract negotiation process, the bidder shall carefully review the relevant data parameters in the contract, promptly propose and amend any wrong omissions and inconsistent obligations in the contract, and review the composition of the contract price and the currency of billing, and consider risk hedging measures.
(3) In the implementation phase of the project, the bidder shall fully achieve strict control over the implementation aspects of the project. It shall measure its own ability and strengthen the control over subcontractors through flexible mechanisms. At the same time, the contractor also needs to introduce the engineering insurance mechanism into the construction of the project, so as to reduce the project risk.
6 Summary
Through the above thinking and analysis of the project using EPC general contracting mode, it can be seen that the EPC mode in the construction of photovoltaic projects has greater advantages than the conventional owner unit sub-bidding mode in the project's schedule, cost control, quality and safety, risk control and other aspects, the use of EPC mode for photovoltaic projects have economic, urgent, advanced and other aspects of the impact, can be said It is very suitable for the requirements of PV project construction.
