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Page 1: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Professor Feargal Brennan Offshore Wind Foundations

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Presentation Overview

bull The Context

bull The Stakeholders

bull The Science Engineering amp Technology

bull The Commercial amp Legislative Landscape

bull Why Offshore Wind Structures are Different

bull The Virtues and Perils of Standardisation

bull The Choice

Science for the Green Economy wwwcranfieldacuks4ge

The Context

Global Atmospheric CO2 Concentrations

Source Scripps Institution of Oceanography October 2015

IPCC Climate Change 2014 Synthesis Report

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 2: ‘Offshore Wind’ Standards, Certification & Litigation

Professor Feargal Brennan Offshore Wind Foundations

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Presentation Overview

bull The Context

bull The Stakeholders

bull The Science Engineering amp Technology

bull The Commercial amp Legislative Landscape

bull Why Offshore Wind Structures are Different

bull The Virtues and Perils of Standardisation

bull The Choice

Science for the Green Economy wwwcranfieldacuks4ge

The Context

Global Atmospheric CO2 Concentrations

Source Scripps Institution of Oceanography October 2015

IPCC Climate Change 2014 Synthesis Report

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 3: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Presentation Overview

bull The Context

bull The Stakeholders

bull The Science Engineering amp Technology

bull The Commercial amp Legislative Landscape

bull Why Offshore Wind Structures are Different

bull The Virtues and Perils of Standardisation

bull The Choice

Science for the Green Economy wwwcranfieldacuks4ge

The Context

Global Atmospheric CO2 Concentrations

Source Scripps Institution of Oceanography October 2015

IPCC Climate Change 2014 Synthesis Report

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 4: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

The Context

Global Atmospheric CO2 Concentrations

Source Scripps Institution of Oceanography October 2015

IPCC Climate Change 2014 Synthesis Report

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 5: ‘Offshore Wind’ Standards, Certification & Litigation

Global Atmospheric CO2 Concentrations

Source Scripps Institution of Oceanography October 2015

IPCC Climate Change 2014 Synthesis Report

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 6: ‘Offshore Wind’ Standards, Certification & Litigation

IPCC Climate Change 2014 Synthesis Report

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 7: ‘Offshore Wind’ Standards, Certification & Litigation

IPCC Climate Change 2014 Synthesis Report

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 8: ‘Offshore Wind’ Standards, Certification & Litigation

UK Electricity Generation

Source DECC Energy Trends October 2015

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 9: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

COP21 CMP11 UN CLIMATE CHANGE CONFERENCE

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 10: ‘Offshore Wind’ Standards, Certification & Litigation

The Stakeholders

wwwcranfieldacuks4ge

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 11: ‘Offshore Wind’ Standards, Certification & Litigation

Stakeholders

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 12: ‘Offshore Wind’ Standards, Certification & Litigation

The Science Engineering amp Technology

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 13: ‘Offshore Wind’ Standards, Certification & Litigation

The rapidly increasing size of wind installations as they move offshore

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 14: ‘Offshore Wind’ Standards, Certification & Litigation

Design Considerations for Offshore Support Structures

bull Primary Purpose ie Ultimate Capacity

bull Maintainability

bull Transportation

bull Installation

bull CAPEX amp OPEX

bull Environmental Impact

bull Environmental Life-Cycle

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 15: ‘Offshore Wind’ Standards, Certification & Litigation

European Water Depths

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 16: ‘Offshore Wind’ Standards, Certification & Litigation

USA Water Depths

Image Courtesy of Google Earth

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 17: ‘Offshore Wind’ Standards, Certification & Litigation

Offshore Wind Support Structures

Support

structure

Monopile gravity-based Tri-pod Jacket Floating

Water depth

(m)

0-40 10-40 30-80 gt50-100 ()

Industrial

development

Large commercial wind farms already exist

(Denmark UK the Netherlands Germany

Sweden etc)

Demonstration wind

farms (Beatrice

Alpha Ventus)

Prototype (full-scale Hywind WindFloat small-

scale BlueH Sway etc)

International

Standards

IEC 61400-3 GL DNV BV and ABS an

extension of design code for onshore wind

turbines

Refer to offshore

codes for support

structures

Under development

Fixed

Foundation

Fixed

Foundation Fixed

Foundation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 18: ‘Offshore Wind’ Standards, Certification & Litigation

Floating wind turbine foundations

Floater spar semi-submersible and barge Mooring system catenary mooring and tension leg

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 19: ‘Offshore Wind’ Standards, Certification & Litigation

Floating wind turbine foundations

HYWIND (Courtesy Statoil)

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 20: ‘Offshore Wind’ Standards, Certification & Litigation

Floating wind turbine foundations

(Courtesy WindFloat)

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 21: ‘Offshore Wind’ Standards, Certification & Litigation

Offshore Wind ndash Floating Demonstrators

(Courtesy Fukushima Forward)

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 22: ‘Offshore Wind’ Standards, Certification & Litigation

Offshore Wind ndash Novel

Concepts

The Aerogenerator X concept (Courtesy Wind Power Ltd and Grimshaw)

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 23: ‘Offshore Wind’ Standards, Certification & Litigation

The Commercial amp Legislative Landscape

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 24: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Wind Power in the UK ndash October 2015

Data from Renewable UK October 2015

Installed Capacity Number of

Turbines

Approx Number of

Homes Powered

Onshore 83 GW 5094 4278589

Offshore 5 GW 1452 3775226

Total 133 GW 5327 8053815

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 25: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

UK Offshore Wind World Leading Position

bull The total offshore generating capacity in UK waters is approx15 TWh

annually equivalent to the electricity consumption of around 38 million

homes

bull In addition to the 5GW already installed a further 119GW is either in

construction or has planning approval and a further 52GW is in the

planning system

bull Industry projections are for a total of 6GW of capacity installed by 2016

and around 10GW installed by 2020 by which point offshore wind will

supply between 8 and 10 per cent of the UKrsquos electricity annually

Data from Renewable UK October 2015

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 26: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Renewable Electricity at 22 of UK Total

Official UK Government statistics showed in the final

quarter of 2014 Renewable Electricity providing 22 of

total UK supply with wind making up 12

Renewable UK Press Release March 2015

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 27: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Behind this pioneering successhellip

ldquoUS contractor

Fluor has lost

the major

arbitration case

against the

owners of the

Greater Gabbard

offshore wind

farm SSE and

RWE and will

take a pre-tax hit

of $400mrdquo

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 28: ‘Offshore Wind’ Standards, Certification & Litigation

Why Offshore Wind Structures are Different

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 29: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Structural Integrity

The dominant failure mechanisms of offshore structures

are associated with corrosion and fatigue cracking ie

progressive failure and dependent upon

bull Materialrsquos resistance to cracking

bull The extent of defects

bull Local applied and residual stresses

bull Environment

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 30: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Cost vs Reliability

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 31: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

The Stress-Life Approach

10

100

1000

100E+04 100E+05 100E+06 100E+07 100E+08

Str

es

s R

an

ge

(M

Pa

)

Number of cycles

C1 - DNV Air

C1 - DNV Free corrosion

0

5

10

15

20

25

30

35

40

45

50

0 10 20 30 40 50

Str

es

s R

an

ge

(M

Pa

)

Number of Years

DnV C1 Air

DnV C1 Free Corrosion

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 32: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Jacket vs Monopile

Structures

bull High Degree of Structural Redundancy

bull Very Damage Tolerant

bull Relatively Expensive

bull Little Structural Redundancy

bull Not Very Damage Tolerant

bull Relatively Inexpensive

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 33: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Progressive Damage Models LEFM

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 34: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

bull Chemically etched weld macro

bull 3-Dimensional geometry scanning

Quality analysis

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 35: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Quality analysis

bull Crack surface analysis

bull MPI (Magnetic Particle Inspection)

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 36: ‘Offshore Wind’ Standards, Certification & Litigation

Can we afford the lsquoStandardrsquo Stress-Life Approach

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 37: ‘Offshore Wind’ Standards, Certification & Litigation

The Virtues and Perils of Standardisation

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 38: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Expense of the Oil amp Gas

Legacy

Fabrication and

inappropriate design

standards that are largely 30

years old

A very different cost imperative

Manned (High Risk)

installations

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 39: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

The standardisation ndash innovation dichotomy

bull Volume Services

bull Expanded and therefore more competitive supply base

bull Ease of regulatory and certification approvals

Advantages of standardisation

bull Can block the introduction of new technologies

bull Can restrict the supply base to only those who can meet standards

bull Can make incremental improvement difficult and radical innovation impossible

Dangers of standardisation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 40: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Approaches to standardisation

bull Simple to implement

bull Low development costs

bull Easy to regulate and legislate for

bull Good protection against known risks

-----------------------------

bull Limits innovation

bull Multiple project failures might occur

bull Requires a high degree of competency

bull Innovative and efficient solutions

bull Better understanding of responsibilities

-----------------------------

bull Heavily dependent on technical competence

bull More difficult to verify conformity

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 41: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Developing Smart Standards

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 42: ‘Offshore Wind’ Standards, Certification & Litigation

The Choice

wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 43: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Standardisation approaches The choice

bull Prescriptive regulations that explicitly describe methods characteristics

materials fabrication installation and maintenance procedures

bull Goal (or Performance)-based standards that specify minimum

characteristics to protect health amp safety and against adverse environmental

impacts

bull Goal-based standards as above but supplemented with functional high-level

performance specifications

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 44: ‘Offshore Wind’ Standards, Certification & Litigation

Professor Paul Leinster Talking to the right people about the right things

wwwcranfieldacuksass4ge

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 45: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind

bull Designated as nationally significant infrastructure projects

bull This results in streamlined decision making process

bull Planning Inspectorate carries out certain functions on behalf of the Secretary of State

bull Underpinned by a National Policy Statement

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 46: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

National policy statements

bull Governmentrsquos objectives for a particular sector

bull establishes the need

bull overarching statement on energy

bull statement on renewable energy

bull Subject to public consultation and parliamentary scrutiny before being designated

bull Framework within which Planning Inspectorate make decisions

bull Supported by a Strategic Environmental Assessment

bull Provides reasons for the stated policy

bull Presumption in favour of development

bull Describes circumstances where it is particularly important to address the adverse impacts of development

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 47: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Development consent process

bull Pre-application

bull Application acceptance (or not) within 28 days

bull is it the required standard

bull has consultation been adequate

bull Pre-examination 2 to 3 months

bull sets out timetable for examination

bull Examination 6 months

bull Decision

bull recommendation to Secretary of State within 3 months

bull Secretary of State then has a further 3 months to issue decision

bull Post decision

bull 6 weeks when legal challenges can be made in the High Court

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 48: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Rochdale envelope

bull Allows evolution of design within clearly defined parameters

bull Flexibility not to be abused

bull Environmental assessment to take account of likely significant effects within the full range of parameters including potentially cautious worst case

bull If necessary mitigation to consider a range of possibilities

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 49: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Pre-application period is crucial

bull Engage with Planning Inspectorate bull pre-application prospectus bull infrastructure planning leads

bull Actively engage consult and work with bull local communities local councils Crown Estate Marine

Management Organisation Natural England JNCC Environment Agency

bull Environmental impact assessment bull scoping bull preliminary environmental information bull draft environmental statement

bull Submit development consent order drafts for comment bull include all elements bull include associated development

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 50: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Managing the process

bull Actively manage the process bull Submit updated drafts at key stages bull Agree a phased approach if appropriate bull Consult and engage proactively and fully

bull talk to the right people about the right things bull NPS SEA EIA permits planning overall bull twin track where possible bull work in partnership

bull Ensure communications and project scope are clear and readily understandable by the general public

bull Fund agencies to carry out pre-application work bull Quality not quantity that is important bull Ensure as much as possible is agreed before formal

submission of an application

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 51: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

Offshore wind projects

bull Most planning safety and environmental risks are in the early development phases

bull Considerable expenditure on developments which may never be built

bull Renewables UK statements

bull Round 3 projects will take up to 5 years to be approved

bull Development period to full operation around 10 years

bull Government agencies have been cut back and lack the resources and the skilled workforce required to speed up approvals (I believe this can be managed)

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 52: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

The Danish approach

bull Specific marine areas identified by government

bull Sites designated for a set capacity of wind energy

bull Governmentrsquos energy agency completes the development surveys and impact assessments

bull Then tenders for offshore wind projects of a specific size at each location with specific construction deadlines

bull The Dutch are now adopting this approach

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 53: ‘Offshore Wind’ Standards, Certification & Litigation

David Nitek

The need for contractual clarity ndash lessons learned from an offshore wind dispute

wwwcranfieldacuksass4ge

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 54: ‘Offshore Wind’ Standards, Certification & Litigation

MT Hojgaard v EON a recent dispute arising out of an error in an international standard

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 55: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Offshore wind turbines in Solway Firth (Robin Rigg East and West)

bull Monopile driven into seabed

bull Transition piece fits on top of the monopile

bull Tower fits onto the transition piece

bull Monopile and transition piece are bonded together with grout

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 56: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 57: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull In 2004 International Standard J101 was published by DNV

bull Section B sets out a number of parametric equations including

bull States the interface shear strength due to friction

bull But there is an error in the equation δ does not properly define the

relationship between the height of surface irregularities and the pile radius

bull The effect of this error is that the equation overestimates the strength of the grouted bond to withstand the axial (downward) load of the tower

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 58: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contract imposed a variety of obligations on the Contractor

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 59: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Contractor designed in accordance with J101 and the DNV issued Foundation Design Conformity Statements

bull February 2009 ndash Works completed

bull September 2009 ndash grouted connection on a windfarm elsewhere started to fail DNV identified error in J101

bull April 2010 ndash grouted connection started to fail on the Robin Rigg turbines Remedial works undertaken with the parties then disputing who bore the cost of those works

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 60: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull Trial judge found in favour of the Employer ndash the Contractor had warranted that the foundation would last for 20 years

bull Appeal to the Court of Appeal

bull ldquoThe court is confronted in this case with contractual documents of multiple authorship which contain much loose wordingrdquo

bull Contracts can oblige a contractor to comply with particular standards and achieve a particular result Such a contract if worded with sufficient clarity may impose a double obligation upon the contractor He must as a minimum comply with the relevant standards He must also take further steps as are necessary to ensure he achieves the specified resultldquo

bull Did the contract in this case impose such a double obligation with the Contractor giving an overarching warranty that the foundation would last for 20 years

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 61: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull An apparent warranty in the Technical Requirements that the foundations would last for 20 years

bull However this was inconsistent with the standard of care provisions in the conditions of contract which required compliance with standards and good practice

bull It was also inconsistent with the rest of the Technical Requirements which refer to a 20 year design life ldquoIf a structure has a design life of 20 years that does not mean that inevitably it will function for 20 years although it probably willrdquo A design life is different from a ldquoguaranteed operational liferdquo

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 62: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy wwwcranfieldacuks4ge

MT Hoslashjgaard -V- EON

bull If the Employer wanted a warranty that the foundation would in fact last for 20 years it should have included one in clause 81 of the general conditions not tucked it away in the TRs

bull In sum 3222(2) was too slender a thread upon which to hang a finding that [the Contractor] gave a warranty of 20 years life for the foundations

bull The fitness for purpose warranty was not free-standing because it was qualified by the words in accordance with the Specification using Good Industry Practice which was defined by reference to standards

bull If an Employer wants to mandate an outcome ndash for example a minimum life ndash he needs to do so very clearly

Science for the Green Economy wwwcranfieldacuks4ge

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 63: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy

lsquoOffshore Windrsquo Standards Certification amp Litigation

wwwcranfieldacuks4ge

Q amp A

Julie Vaughan

The contents of this publication current at the date of publication set out in this document are for reference purposes only They do not constitute legal advice and should not be relied upon as such Specific legal advice about your specific circumstances should always be sought

separately before taking any action based on this publication

Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills an Australian Partnership are separate member firms of the international legal practice known as Herbert Smith Freehills

copy Herbert Smith Freehills LLP 2015

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge

Page 64: ‘Offshore Wind’ Standards, Certification & Litigation

Science for the Green Economy

Thank you for attending

Next Event

Wednesday 13 and Thursday 14 January 2016

A National Debate in Technology and Governance for the Green Economy

Location Cranfield University

wwwcranfieldacuks4ge