WIND POWER PROJECT DEVELOPMENT: A MULTI-CRITERIA DECISION ANALYSIS FRAMEWORK FOR SUBCONTRACTORS’ EVALUATION

Abstract: The Swedish Wind Energy Association (SWEA, 2019) reported the wind power project's total investment cost between 2017 and 2021 was over SEK 72 billion. They predicted that at project completion, the total production will be approximately 22.4 TWh per year. Due to project size, complexity, and long-term contracts commitments, almost all wind power project developers outsource some or most of their project activities to different subcontractors, after which they perform monitoring activities of the project process. Therefore, the pre-qualification stage and subcontractors’ evaluation become essential parts of every project. Most corporates and authorities are usually awarding projects to subcontractors with offers based on the most competitive price advantage. This approach results in high risks that can affect the delivery time, the overall cost, and the quality of wind power projects.This research paper aims to use a multi-criteria analysis to identify and select the most adequate subcontractor. To achieve the research purpose, a sample of five subcontractors nominated by a windpower developer were evaluated in a selection phase under nine criteria: (1) management capability, (2) product or service quality, (3) planning and capabilities, (4) quality assessment,(5) environmental management, (6) health and safety measures, (7) financial strength, (8) contract insurances and guaranties, and (9) cost. After the evaluation and the ranking of companies, a result of the most adequate subcontractor for the project offer was presented. At the end of this study, a comparison analysis was followed at the final stage which compared the method with a similar procurement approach used by one corporate where it showed that this paper’s method can uncover critical aspects with subcontracts which can alter the selection process.