A sourcing evaluation model for transportation and installation services of wind turbines - The case of E.ON Vind Sverige AB

Abstract: Today’s global competition forces manufacturing companies to re-evaluate their existing processes, technologies, manufactured parts and services in order to focus on strategic activities. The question whether to make or to buy goods or services represents a problem faced by many companies when deciding between keeping technologies/processes in-house or purchasing them from an outside supplier. In today’s society, an increasing number of business functions are being outsourced. Therefore, choosing sources of supply is one of the most critical decisions a purchaser makes when it comes to the sourcing activity. The renewable energy projects worldwide have seen growth both in number of projects and potential investment value in 2010. Today there are many renewable alternatives, where wind power is one on the rise. The Swedish government decided in 2009 about a national plan for wind power, which equals a total production of 30 TWh (where 10 TWh is ocean based) in 2020. A big challenge facing the wind power industry is the logistics of transporting oversized parts over extremely long distances. Due to the strongly increasing demand of wind power, the question regarding the most appropriate sourcing alternative for transportation and installation services arises. The purpose of this study is to contribute to a deeper knowledge about the process of selecting sources of supply for transportation and installation services for wind turbine generators (WTGs). The objectives of this thesis are; • To identify and describe the necessary activities for and the challenges associated with transportation and installation services of WTGs. • To develop a general evaluation model for the sourcing alternatives for transportation and installation services of WTGs. • To adapt the general evaluation model to E.ON Vind, and apply it to the Knäred project. The necessary activities identified from manufactured to commissioned WTG are transportation, lift, installation and coordination. The challenges associated with these activities are taken into consideration when the key factors for choosing the appropriate supplier and sourcing alternative are identified. These factors are divided between supplier and project specific criteria and used as evaluation criteria in the developed SAWPS-model (Sourcing Alternatives for Wind Power Services). The outcome of the model is the most feasible solution regarding selection of supplier and sourcing category for a specific project. When applying the evaluation model to the Knäred project, a full turnkey solution was found to be the most suitable solution based on the given information and E.ON Vind’s current situation.