Windstream - Wind Mills of Change

Windstream Project: Windmills of ChangeMeridian EnergyKaren OstromeckiBryan MeyerSusan Lindsay

International Project Management/0601.412-712.90 / Professor Ades & Boyd November 15, 2009

Windstream Project 11/15/09

Meridian Energy Slide 1 of 25

•Executive Summary•International Factors

• Culture, Art, & Society• Languages & Dialects• Religious Practices & Customs• Infrastructure and Public

Safety Differences

• Legal, Regulatory, and Reporting Requirement

• Technology Differences• Time Zones, Time Perceptions,

and Political Context

•Scope Statement•Budget Summary and Sources of Funding•Schedule Summary•Work Breakdown Structure•Resource Needs•Communication Plan•Project Monitor and Control Plan•Risk Management and Response Plan•Open Issues•Evaluation Plan•Summary Statement•Work Cited



Agenda

Executive Summary:• China wind power has witnessed 100% annual growth, and

will become the largest wind power market in 2009

• The Windstream project will install 67 wind turbines in Zhangbei, China, and will be fully commissioned by 2010

• Immediate Goal:▫ Increase Meridian Energy Wind Farm presence in China

Regions: High growth potential for wind harnessing and smaller presence of existing wind farms

• Proposal:▫ Construct efficient wind turbines▫ Deployment of new systems▫ Reduced maintenance requirements

• Future Goals:▫ Integrate above technologies for future generations of wind turbine

components, wind turbines, and wind farms throughout China



China: Global Factors•Cultural, Art, and Social Differences•Languages and Dialect

•Religious Practices and Customs•Infrastructure and Public Safety Differences•Legal, Regulatory, and Reporting Requirement•Technology Differences•Time Zones, Time Perceptions, & Political Context

http://faculty.ccri.edu/mkelly/COMP1230/ProjectFactors.jpg



Global Factors: Culture, Art,Society

• Culture ▫ Food Symbolism▫ Table Manners ▫ Three Course Tea

• Society▫ Social Relationships:

Formal, Hierarchical▫ Concept of Self: Group

well-being is highly valued▫ Harmony vs. Truth: Avoid

direct confrontation, open criticism, and controversial topics

• Art▫ Media: bronze, ceramics,

ink, jade, lacquer, textile, and scrolls

▫ Changes seen correlating to Dynasties, Rulers and Regions of China

• Meridian Preparation▫ Team member enrollment

in basic Chinese class at the college level Learn customs and

culture of China Learn basics of language

to communicate and show respect



Global Factors: Languages & Dialects• Multiple dialects, written forms,

tones and two alphabets▫ Pinyin alphabet

• Mandarin is the official language▫ Train team members

Basic phrases and courtesies

• Interpreters and Translators▫ Use for all communications

Oral and written English to Chinese Chinese to English

▫ Train team members on use

语言和方言多方言，书面形式，声

调和两个字母拼音字母普通话是官方语言火车团队成员基本短语和礼遇口译和笔译

用于所有的通信口头和书面英语译成中文汉语译成英语

列车上使用团队成员



Global Factors: Religious Practices and Customs

• Four main traditions▫ Chinese folk religion, Confucianism,

Taoism, and Buddhism

• Festivals, ceremonies and rituals▫ Chinese New Year

• Superstitions▫ Avoid bragging about good fortune

• Feng Shui▫ Harmony with surroundings

• Ancestor Worship▫ Deceased have continued existence



Global Factors: Infrastructure and Public Safety Differences• Infrastructure

▫ Ranges from good to very poor▫ Special Economic Zones

Increase foreign investment▫ Mass transit

Subways, railroads, airports and waterways

▫ Electricity

• Public Safety▫ Lowest capital crime rate▫ Ministry of Public Security



Global Factors: Legal, Regulatory, & Reporting Requirements• Roles of Rules, Laws, &

Relationships▫ Personal relationships

prevail over written rules

• Business Culture▫ Relationships prevail over

task accomplishment

• Dealing with Business Counterparts▫ Indirect, courteous▫ Chinese counterparts

remember interactions for a long time. (positive & negative)

• Negotiation Style▫ Group decision with the

final say by the Boss

• Labor Standards▫ 40 hour work-week▫ Overtime is not unusual

• National & Public holidays▫ Three national holidays

• Marketing▫ Aim marketing toward the

“hip” and “cool”

• Meridian Preparation▫ Legal team for Meridian

will work with the Legal team for Tianjin Energy t navigate through the Chinese import/export and Legal systems



Technology Differences

• The 2007 statistics show China with a technological standing of 82.8, compared to 76.1 for the United States, 66.8 for Germany and 66.0 for Japan.

• In 2006, Chinese developers unveiled the world's first full-permanent magnetic levitation (Maglev) wind power generator at the Wind Power Asia Exhibition 2006

• The technology could be crucial to bringing wind power to places where it is currently un-utilized and perhaps too costly to build.



Time Zones, Time Perceptions, and Political Context• China is slightly wider than the contiguous USA and spans four

time zones yet it exists on a single time zone

• In China people arrive on time or early for an appointment. Arriving late may be seen as a lack of respect.

• People's Republic of China:▫ Single-party socialist republic. The leadership of the Communist

Party is stated in the Constitution of the People's Republic of China

• China’s government is pouring billions of dollars into alternative energy - an investment that, as a percentage of GDP, is 10 times that of the United States



Scope Statement• Project Location:

▫ Zhangbei County, Hebei Province, and is developed by China Energy Conservation Investment Corporation (CECIC) Wind Power (Zhangbei) Yunwei Co. Ltd.

• Wind power is the fastest‐growing source of renewable energy in China, providing a clean alternative to fossil fuels while displacing greenhouse gas and air pollution emissions.

• Success Criteria:▫ Property tax revenues ▫ Skilled jobs ▫ Landowner royalties and leases, as previously mentioned.▫ Generate an estimated $4.0 million annually for the Zhangbei

county economy.▫ Providing customers with cost-effective wind-generated

electricity



Budget Summary and Sources of Funding

• Project Cost: ▫ CNY400.0 million, 66% of which will be financed by long-term

debts provided through a proposed Asian Development Bank (ADB) loan and the remaining 34% financed by equity from the two sponsors.

• Wind farms, currently cost around $900-1,000 per kilowatt.

• A United Nations climate panel decided to register 17 Chinese wind farms. including the Windstream wind farm project for climate financing worth nearly $150 million



Project Schedule: Project Phases• Phase 1: Planning

▫ Projected start date: January 31, 2010

▫ Tasks: Preliminary market evaluation

based upon review of available demographic (census) data

Visit potential project sites▫ Approval:

Senior Management, Project Manager spend 2-3 days on location

• Phase 2: Preliminary Plan Development▫ Projected start date:

April 15, 2010▫ Tasks

Detailed market analysis (based on available demographics information)

Wind Assessment Environmental Study Wind Farm Design Options

▫ Approval: Project Manager, Customer

go-ahead

• Phase 3: Full Project Design▫ Projected start date:

August 1, 2010▫ Tasks:

Finalize plans started in Phase 2

Secure resources Draw up project

paperwork Manufacturing beings

▫ Approval: Project Manager

• Phase 4: Implementation▫ Projected start date:

September 1, 2010▫ Tasks:

Site construction Turbine construction Operation and

maintenance construction▫ Approval:

Project Manger, Customer, Tianjin Energy PM, Project Team

Phase 5: Operation



Project Schedule: Work Breakdown Structure



Resource Needs• Organizational chart

▫ Meridian Energy US Resources (Raw

materials, Labor, Finances)

Import/Export Chinese Resources

(Land, Labor, Finances, Raw materials)

Meridian Wind Farms• Responsibility

Assignments chart

• Contractors and Suppliers▫ Phases involved in:

Planning Pre-Construction Construction Post-Construction Operation

• Required Physical Resources and Costs▫ Human (15% of budget)

Labor-Surveyors Engineers Construction

Contractors Electrical contractors Specialized

subcontractors Turbine installers Turbine suppliers Architects

▫ Physical (85% of budget) Turbine Parts Construction Equipment Maintenance Equipment

Organization Title

Project Activity

Requirements Design Test

Project Communication

Training

Meridian Energy R C S A/R S

Tianjin Energy R S A/R A/R A



Communications

• Who to communicate with▫ Clear and transparent

Scope, roles and responsibility, milestones, and deliverables

Internal and external stakeholders

• Forms of communication▫ Website, Project Plan,

Email, Groupware

• How issues will be escalated and when▫ Project Issues Log

• Linear Responsibility Chart▫ Example of

communicationsTYPE WHO PURPOSE WHEN METHOD

Status Reports

All Stakeholders and Project Office

Update on progress of project

MonthlyElectronic and on website

PPO Audit Review

PPO, PM, select Stakeholders and Sponsors

Review status, issues, and risks

MonthlyMeetings and reports

Quarterly Project Review

PPO, PM, key Stakeholders

Review overall health of the project

QuarterlyMeetings and reports

Project Website

All internal and external stakeholders

Central location for project documents

Monthly, and as needed

Electronic



Project Monitor and Control Plan

• Project Status Reports▫ Identify progress to the

schedule and budget Focus on milestones in

three critical areas▫ Track risks and mitigation▫ Issue tracking and

management

• Ensuring quality through metrics▫ Measurements

EFOR, EAF, CEFOR, Cost of CEFOR

• Change Management▫ Standardize procedures

to manage change▫ Effective and efficient

change request process▫ Defined roles and

responsibilities

Role Responsibility

Project Manager

Facilitate and/or execute the change process

Project Coordinator

Assist with estimating and scheduling change

Configuration/Change Mgr

Receives, logs and tracks all change requests



Risk Management and Response Plan

• Focus on three phases of the project▫ Planning and Pre-

Construction▫ Construction, Testing and

Commissioning▫ Operation

• Three main categories of risk▫ Contractual▫ Operational▫ Physical hazard

• Potential risks and response▫ ExamplesRisk Description Stage

Permit delays Inability to obtain permits

Planning / Pre- Const

ContractorNon-performance

Unable to deliver to spec, on time and in budget

Planning / Pre - Const

Engineering risk

Physical loss/damage caused by engineering

Construction, Test, Commission

Natural hazard

Physical loss/damage caused by natural hazards

Operation



Risk Management and Response Plan cont.

• Risk Assessment▫ Contractual

Contract Viability Warranty Performance Buyer defaults Contractor Non-

performance▫ Operational

Technical or engineering Catastrophic design

failure Permit/Plan delays Wind volatility

▫ Physical hazard Natural hazards

• Risk Mitigation Plan▫ Risks are numerous and

diverse▫ Affect every stage▫ Mitigation Plan includes

Review of contracts Analysis reports Comprehensive

insurance Dedicated claims expert Project team

assessments Analyze geological

surveys Identify key bottlenecks



Risk Management and Response Plan cont.• Contingency budget

▫ Assess probability of risks▫ Risk values▫ Cost Impacts

Risk Probability Cost Impact Risk Contingency

Permit/Plan Delays .75 USD $5MM USD $3.75MM

Contract Viability .50 USD $2MM USD $1MM

Engineering Risks .30 USD $5MM USD $1.5MM

Buyer Contract Failure

.20 USD $2MM USD $.4MM

Natural Hazards .20 USD $2MM USD $.4MM

Wind Volatility .50 USD $2MM USD $1MM

Totals USD $36MM USD $9.4MM



Open Issues & Pending DecisionsOpen Issues/Pending Decisions

Phase Responsibility Decision Lesson Learned

•Open throughout project•Evaluated at the close of each project phase



• Lessons Learned• Project Leader

Scorecard• Impact on Region &

Meridian Energy• Project Scorecard

Evaluation Plan



Summary• The Project, generating renewable energy

from wind resources on marginal land with insignificant economic and ecological value, contributes to reducing GHG emissions and delivers long-term economic, environmental, and social benefit

• The project is unlikely to cause any significant or lasting negative environmental or social impacts.

• Project Approach:▫ Hire skilled labor▫ Meridian Energy will hire its own interpreter and

local legal counsel ▫ Negotiate clear contract terms that include

provisions to protect intellectual property.▫ Visits to the Chinese partner's manufacturing or

distribution facilities with key decision makers .



Works Cited• Agenda

▫ http://www.flickr.com/photos/azurelan_space/2704069474/

• Project Details▫ http://www.greenpeace.org/seasia/en/photosvideos/photos/dan-nan-wind-farm-in-nan-ao-g-2

• Culture, Art, Society▫ http://www.asia-pictures.net/images/collage/Pictures%20of%20China%20collage.jpg

• Infrastructure and Public Safety Differences▫ http://www.flickr.com/photos/myuibe/2627169317/

• Technology Differences▫ http://www.flickr.com/photos/image_enhancement_services/3463866178/

• Time Zones, Time Perceptions, and Political Context▫ http://www.asiadragon.co.uk/asian_home_furnishings.php

• Regulations▫ http://www.ewi.info/system/files/images/US-China_3.jpg

• Project Schedule:▫ http://www.lpod.org/?p=976

• Resources▫ http://www.telcohelp.com/

• Budget Summary and Sources of Funding▫ http://www.lucylearns.com/chinese-money-paper.html

• Evaluation Plan▫ http://www.findyourrainbow.com/images/Evaluation.jpg

• Summary▫ http://eande.lbl.gov/news-archives/news-archives-2007.html

