Supply to Dong Energy

Welcome to Supplying to Dong Energy

Dong Energy is one of Barrow’s major employers. It has a global supply chain and is committed to increasing its UK supplier base. Here is a link to the company’s quick guide on how to become a supplier:

stregtheningchains1.jpg http://fe2013images.web.furness.net/files/Brochure_How_to_become.pdf

NW Connections Project Supply Chain Hand outNW Connections Project Supply Chain Hand out – December 2014 – Download PDF

Strengthening Supply ChainsStrengthening Supply Chains – November 2014 – Download PDF

This introduction to “how to supply to Dong Energy” summarises its scale of operations at the port of Barrow in Furness, in the Irish Sea, forthcomng projects, the likely supply chain pre-qualification and accreditation (Achilles) requirements and how to find emerging Dong Energy contract opportunities.

The Furness Economic Development Forum Supply Chain Team are
 – engageing with Dong Energy in London and elsewhere
 – alerting businesses to emerging opportunities
 – partnering Associated British Ports Plc Barrow promoting the port to Dong as an offshore wind support centre
 – inputting to the company our ideas for Dong’s planned community fund worth a potential £16.5m over 25 years

Our commitment to companies that wish to assist Dong  Energy and its contractors build or operate its windfarms in the Irish Sea is  to help busineses understand
– the nature and scale of the supply chain opportunity,
– what is happening when,
– the prequalification needs by enabling firms to find out how to pre-qualify and acquire the skills needed to seek out win and retain contracts
– discretionary grants from the national GROW scheme
– what assistance is on offer to position your business or collaborative venture to bid for and potentialy win work with Dong Energy.

We also gather and offer intelligence from a range of sources that firms can use to develop their business cases to be part of Dong’s Supply chains on the east and west coast of UK.

The website”4C Offshore” details the scope of contracts involved.  generated by some of Dong Energy’s west coast projects at:

 

Dong Energy in Furness

Dong Energy’s facilities  are situated within Associated British Ports PLC  Barrow’s port area.              They occupy over 7,700m2 floor space at The Waterfront, Barrow in Furness Business Park and port of Barrow where currently over 180 people are employed in supporting the offshore operations and maintenance of the Barrow, Walney 1, Walney 2 and West of Duddon Sands wind farms.

During construction of the Walney 1 wind farm over £1m month was spent with local suppliers.

Now that operations and maintenance predominates a much wider range of suppliers and supplies are likely to be needed over the next twenty plus years.

With this windfarm servicing opportunity now on the doorstep set to increase with Walney 3 windfarm being developed over the next two years this part of the “Find it in Furness” website summarises how you can:

  • discover Dong Energy’s approach to placing contracts in UK
  • discover what Dong Energy are doing in the East Irish Sea
  • identify its future plans and investment timings
  • understand its prequalifying processes for the company’s contracts

To discover more about wind farm developments see Dong’s “Wind Power 2020 Strategy” at

http://www.danskgeotekniskforening.dk/sites/default/files/pdf/pdf2014/Moede%202/Intro%20-%20Tove%20Feld%20-%20DONG%20Energy%20-%20DGF%20Seminar%202014-04-01.pdf

Key objectives identified by the company include:

  • Decrease lost time injury frequency to a level below
  • Reduce Cost-of-Electricity by 40% below €100/MWh2 by 2020 (£85/MWh)
  • Generate ROCE of 12-14% by 2020, 6-8 % by 2016
  • Increase installed gross capacity from 1.71 GW to 6.5 GW by 2020

Note 2 UK Market 2020FID

The company is committed to further maturing its supply chain covering

  • onshore sub stations(electrical components,construction efficiency);
  • export cables
  • offshore substations
  • array cables ( new suppliers)
  • foundations (increased quality increased volume supply)
  • turbines (developing installation vessels for larger turbines)

Dong cite key challenges for the offshore wind industry as being:

  • offshore wind not being competitive with other energy technologies
  • sites moving into deeper water further offshore
  • growth being dependant on supply chain development
  • utilities are struggling to secure fundingof future projects
  • need for offshore wind industry HSE standards

Dong’s approach to placing contracts in UK

The UK is one of Dong Energy’s key markets for growth outside of Denmark.

This webpage http://www.dongenergy.co.uk/en/uk_business_activities/renewables/becomeasupplier/pages/buildingauksupplychain.aspx sets out the policy of the company.

The company is committed to increasing its UK supply chain for offshore wind in line with industry and Government ambitions to realise the opportunities the growing offshore wind market can offer to the UK.

Suppliers are a vital part of Dong’s success as a market leader in offshore wind and also in helping it achieve its cost reduction goals for offshore wind.

Building relationships with capable, competitive and innovative suppliers is essential to delivering new projects successfully.

Whilst the company states that “Some of the main turbine parts must still come from other parts of Europe.. many of the suppliers needed to build and operate a wind farm are already here. That could be anything from design engineering, environmental surveys of our sites or the fabrication of components”.

There are a number of things Dong are doing to …. help the UK supply chain with these opportunities, including:

  • Engage directly with local supply chains and help them understand our processes and qualifying systems.
  • Work with our current supply chain to identify new opportunities to work with UK companies.
  • Encouraging inward investment by the global supply chain into new manufacturing facilities in the UK.

It is

  • encouraging first tier suppliers to utilise local suppliers and establishing contact between local UK suppliers and first tier suppliers so they can form business relationships.
  • Hosting regular supply chain forums which give local suppliers the opportunities to understand our business plans and approach.
  • Making sure its processes for becoming a supplier are clear, transparent and easy to follow.

How to supply to Dong Energy

DONG Energy Wind Power know that suppliers are a vital part of our success as market leader in the offshore wind business. It values relationships with oits suppliers and welcome new suppliers to be part of its supply chain.

DONG Energy Wind Power has a global qualification system framework in cooperation with Achilles who operates the systems.

DONG Energy Wind Power’s intention is to make the process of doing business with DONG Energy Wind Power easier for the majority of the procurement we do, as this qualification system framework will enable us to streamline the way we engage with suppliers in different locations/projects, how we qualify them and share that information across the DONG Energy Wind Power business. Our aim is to reduce the cost, time and effort involved in doing business for both DONG Energy Wind Power and our suppliers.

Operating under the basic principles of:

  • Best value
  • Competition
  • Fair treatment of potential suppliers
  • Responsible sourcing including code of conduct and QHSE

it currently use 3 qualification systems:

  • Sellihca:
  • All our global categories as well as locals in ScandinaviaConnexio
  •  Local categories in GermanyUVDB:
  • Local categories in the United Kingdom

You can see these categories below:

Global Categories:

Offshore Substation Structures (including Topside and Foundation)

Jacket WTG Foundations

Mono-pile WTG Foundations

WTGs (including onshore/offshore WTGs, davit cranes)

Cables (including onshore/offshore export cable, array cables)

Substation Components (including MV & HV switchgear, transformer)

SCADA (substation(s))

HVDC (including export cable, offshore substation structures, substation components, transport & installation services)

Vessels (including heavy-lift, jack-ups, crew transport)

Geosciences (including geophysical investigations, geotechnical investigations)

Wind Assessments & Measurements (metmast, lidar, wave buys)

Construction Site (cranes, logistics, site provision, facility construction & management)

Local Categories:

Environment & Licenses (including consultancy assistance, surveys)

Onshore Substation Works (UK) (including consultancy assistance, onshore cables installation, facility construction & management)

Support & Advisory (including communication services, legal services, management consultancy services)

O&M Site & Commissioning (including logistics, site provision, facility construction & management)

Do you wish to qualify as a supplier?

If so have a look at Dong’s code of conduct for suppliers here:

http://www.dongenergy.com/SiteCollectionDocuments/CSR/Documents/en_code_of_conduct_for_suppliers.pdf

Discover the procurement processes here:

http://www.dongenergy.com/en/about%20us/procurement/pages/supplier_qualification_system.aspx

Your company can start qualification by clicking one of the links below:

Connexio:

UVDB:

Sellicha:

Dong’s Wind Power supply chain

In Procurement Dong Energy is committed to delivering a low cost and robust sourcing basis and where commercially advantageous will look to engaging directly with our supply chain.

Where it is not commercially advantageous we will be working with our current supply chain to identify new opportunities.

Relationship building

Building relationships with capable, competitive and innovative suppliers is essential to delivering new projects successfully.

Wherever we operate, Dong seek a positive engagement with the local community. This has helped development of local economy and supply chain.

It buys certain supplies and services in the global market, increasingly through framework agreements. Its approach of selecting key suppliers of specific supplies and services brings mutual benefits including cost reductions due to economies of scale.

In general, it conducts its procurement based according to a procurement policy and through a group procuremen system desribed below.

Group Procurement

Group Procurement is in charge of negotiating and concluding procurement contracts on goods and services for the entire DONG Energy Group. The role of Group Procurement is to enter into contracts that will create value for the entire DONG Energy Group, which is achieved by utilising synergies throughout the Group and by negotiating effective financial and legal conditions for the procurement. In addition we create value by strategically utilising our knowledge of the market.

Group Procurement is structured as follows:

  • Indirect Procurement – Responsible for procurement across the Group.
  • Exploration & Production Procurement – Responsible for procurement to the part of the Group that is in charge of exploration and production of oil and gas.
  • Sales & Distribution Procurement – Responsible for procurement to the part of the Group that is in charge of sale and distribution of power and gas.
  • Power Procurement – Responsible for procurement to the part of the Group that is in charge of producing electricity.

Our suppliers

DONG Energy wish to enter into a valuable cooperation with our suppliers.

DONG Energy stipulate a range of overall ethical, social and environmental requirements to all our suppliers, which is why all our suppliers have to comply with the DONG Energy Code of Conduct for Suppliers.

Tendering in Group Procurement

The procurement procedure applied by Group Procurement when making purchases for the group.

Case Study
FPI NorthWest Limited (FPI).

When hydraulic parts or tools are required, the Burbo Bank Offshore Wind Farm site goes to the local supplier FPI NorthWest Limited (FPI).

A good working relationship has been established, and along with supplying hydraulic products, FPI have also advised the site on requirements and carried out specialised fluid power training specific to the wind power industry.

FPI is a growing fluid power engineering company, situated in two locations in the North West region of England: St. Helens, Merseyside and Birkenhead, Wirral. FPI supplies fluid power products and services across industries, which besides offshore wind includes heavy industry, glass, pharmaceutical, and maritime industries. Albeit an SME and still young, the company can boast a combined staff experience of over 50 years in engineering.

Lee Rollason, Head of Operations at Burbo Bank Offshore WInd Farm said:

“FPI has provided us with 3.6MW turbine hydraulic course, and by the report from our Technicians this was more in-depth than any training they had previously undertaken.”

Immediate local support

Being a local company means being able to offer full and immediate local support. FPI’s employees are all local to the area and have a good knowledge of the region. And not only are their own employees local as FPI often prefers to utilise local suppliers themselves to enable quicker response times. Most of FPI’s local suppliers are quality approved by the ISO 9000 standard, and FPI has long established relationships with their suppliers built up on mutual trust and respect.

An appetite for wind power

FPI entered the wind energy market through training and consultancy work for a major energy company. Given their experience, FPI gained an appetite for more work in this industry. They contacted other wind energy companies in their area and were invited in by the Burbo Bank Offshore Wind Farm site to discuss their requirements further. FPI’s knowledge of the industry and the locality of the company helped to establish the good working relationship they now have with the Burbo Bank site.

Colin Walker, Technical Director at FPI NorthWest Limited said:

“Local businesses in the North West of England are gearing up to get ready for the major expansion of the renewables industry in the area. They are working together and forming partnerships, not only with other businesses but also knowledge providers to assist in meeting the upcoming requirements of this growth industry. We are looking forward to the challenge that the wind power industry will bring and the opportunities it will present.”

Health, sSafety and the Environment − a matter of pride

At DONG Energy, health, safety and the environment (HSE) plays a crucial role in choosing suppliers. FPI take pride in their uncompromising attitude to HSE, and in 12 years of trading they have had one minor accident. The company director Colin Walker is currently involved with the British Fluid Power Association in helping to establish a task force aimed at promoting health and safety in the workplace with regards to fluid power systems and pressure

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