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Brian McNiff 43 Dog Island Rd Harborside, ME

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Executive Summary

Assessment of Capabilities for Manufacturing MEM Blades in Mexico

Brian McNiff

Document: MLI_15_IIE-12_MEM_ExecSummary_Task3a_150630.docx Contract: MCNIFF/E/NC/18165

Deliverable 3a, Rev 1.1 Date: 30 June 2015

EXECUTIVE SUMMARY

An assessment of capabilities of selected organizations in the Mexican Eólico Machina (MEM) collaborative has been performed. These identified capabilities have been matched to a detailed list of requirements for anyone to build high quality, state of the art MW scale wind turbine blades, no matter where. Gaps in this matching have been identified with some rating criteria that characterizes how close the in-country capabilities come to an optimum level. Methods to supplement those gaps were provided within different contracting frameworks to acquire blades including:

- purchase of a commercial product; - contract entity that specializes in providing molds and tooling for blades (certainly foreign) ; - competitively bid a contract for complete design, fabrication and validation (also foreign); - identify an in-country project leader to coordinate in-country capacities and supplement with

expert consultants to augment and advance those capacities. A certified, commercial blade is not available in the size range. Therefore, some form of contracting the process as a whole, or as integrated parts, is required. Based on the MEM project objectives, it was interpreted that maximizing the use of in-country capabilities was a high priority. Recommendations were therefore made in the contract bid evaluation methodology to weight the use of those in-country capacities equal to the cost, schedule and expertise requirements. A risk analysis was performed to compare performing the complete project in-country versus sourcing abroad. It was determined that the risk to the project success is slightly higher in-country. However, it was judged to be a tolerable risk to perform the complete project in-country due to a large benefit to the project goals of advancing a wind energy industry in Mexico. A schedule was estimated for performing the project in Mexico. I solicited input on the schedule from 2 test laboratories, a certification group and a blade design consultancy. The schedule shows that the project could be completed in Mexico in 23 months – within the 3 year project boundary. My recommendation is to fabricate in Mexico with a Mexican project lead group to integrate and coordinate in-country capabilities with external consultants to augment with expertise as required.


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1 OBJECTIVE

The objective of this effort was to evaluate capabilities of organizations in the Mexican Eólico Machina (MEM) collaborative to manufacture MW scale wind turbine blades in Mexico, and to perform an assessment of the risk of manufacture in Mexico versus abroad. This work was performed under contract with the Instituto Investigaciones Electricas (IIE) as per McNiff proposal (MLI proposal 14MIIE_1 TDR blades 26Dec2014.pdf) in response to the blade consultancy terms of reference (TDR_Rotor_Blade_Consultancy.pdf) under IIE project ME-X1011. 2 APPROACH

The approach used the following steps to perform the evaluation to meet the objectives: - Identify required skills and capabilities to design, fabricate and validate wind turbine blades; - Survey, document and characterize capabilities of MEM collaborative partners; - Match in-country capabilities to requirements and identify gaps; - Propose how to augment the capabilities up to the required level; and - Weigh risks vs benefits to manufacture in Mexico vs abroad.

These steps are described in summary in this document. More details are provided in the 4 reports that were written for the tasks in this assessment. They are referenced in each clause. 3 EVALUATING IN-COUNTRY CAPABILITIES AND MATCHING TO REQUIREMENTS

The following steps were performed in evaluating available capabilities that can be utilized for WTG blade design, manufacturing, testing and certification:

- develop and prioritize a list of skill and capability requirements for blade development; - visit team participants in Mexico based on availability and access; - review participant capacities from other sources including MEM meeting presentations; - describe and document observed capabilities; and - match the observed capabilities to the identified requirements with an assessment of how

good the match is. The conclusion from this evaluation is that there are significant in-country capabilities to complete the project, but these need to be augmented to meet the requirements with external expertise. The document “MLI_15_IIE-5b_MEM_capabilities_Task2a_150531.docx” describes the process, observations and results of this in more detail. 4 AUGMENTING IN-COUNTRY CAPABILITIES

The matching of capabilities to requirements included a rating criteria that characterized how close the in-country capabilities come to an optimum level. The gaps, or non-optimal matching, can be supplemented depending on how the blade acquisition or manufacturing is contracted. These are:

- purchase of a commercial product; - contract an entity to do the complete design, fabrication and validation (certainly foreign) ; - modify that contract to maximize in-country added value, technology transfer and training; - identify an in-country project leader to coordinate in-country capacities and supplement with

expert consultants to augment and improve those capacities. A commercial blade is not available in the size range, unfortunately. Therefore, some form of contracting the process as a whole, or as managed/ integrated parts, is required. Based on the MEM project objectives it was interpreted that maximizing the use of in-country capabilities was a high priority. In the case of contracting the project as a whole to some entity abroad (2nd and 3rd approaches in list above), recommendations were made in the contract bid evaluation


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methodology to weight the use of those in-country capacities equal to the cost, schedule and expertise requirements (see MLI_15_IIE-6a_MEM_bladespec_Task2b_150601.docx ). The goal with that recommendation is to use the contracting and bidding process to maximize in-country value added. The option to use a Mexican organization to manage and integrate external expertise with local capabilities was concluded to be the best to meet the project objectives. Detailed approaches to supplement and augment the in-country capabilities with external expertise are included in “MLI_15_IIE-7b_MEM_augment_Task2c_150604.docx”. 5 RISK EVALUATION

The options of fabricating blades in Mexico or acquiring them abroad were both evaluated for risks that may compromise the objectives and goals, and aspects that may benefit those goals. 5.1 IDENTIFYING POTENTIAL PROBLEMS AND ASSESSING RISK

There is a lack of substantive public data that would allow us to numerically quantify the risks, costs and benefits of each action and activity involved in the manufacture of the MEM blades in Mexico versus abroad. The approach instead included subjective assessments of these elements of risk and the effect of actions to supplement capabilities (and therefore mitigate risk) as recommended above. The following method was used:

- identify the risks (what can go wrong) and benefits for each of the major activities; - assess a probability or likelihood of occurrence for these risks in manufacturing in-country

or abroad; - describe the consequence of such risks and how they may impact project goals by

assessing a rating of importance (critical = 5, low importance = 1); - describe the recommended risk mitigation methods presented in previous documents; and - quantify a resultant improvement on the risk probability.

The summary in Table 1 shows that the risks are higher for fabricating in Mexico, but not by a large margin. In my estimation this difference is offset by the benefits of fostering a local Mexican wind industry. The document “MLI_15_IIE10a_MEM_riskanalysis_Task2d_150615.docx” includes a more detailed discussion of identifying the risks and the rationales for assessing probabilities and importance scoring. 5.2 RISK MITIGATION

As mentioned above, bringing in the identified expertise reduces the probability of occurrence of the identified deviant situations and consequently improves the probability of project success.. The effect of this improvement is also included in Table 1. To reduce risk, I also suggest that due care be given to these risks areas by requiring a rigorous engineering review at all critical steps of the process, independent of project structure. 5.3 ESTIMATED SCHEDULE

There was some concern that fabricating in-country may risk not meeting the 3 year schedule goal. As a reality check, I contacted different colleagues in blade design and fabrication, mold fabrication, WTG certification, blade structural testing and lightning protection system testing as regards average time estimates for completing those elements of the process. Figure 1 shows a Gannt chart constructed with that information that shows being able to fabricate a set of validated


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blades in Mexico within 2 years. The assumptions used are realistic, but there is clearly enough room to accommodate organizational delays that may manifest within complex multi-party projects. 6 CONCLUSONS AND RECOMMENDATIONS

My interpretation of the key objectives of the MEM project is to promote and improve the Mexican capabilities in wind turbines and encourage the development of local supply chain and support services for a growing Mexican wind energy industry. It is also critically important to produce reliable, high quality blades within the 3-year project period. There is clearly significant capability in Mexico to meet the requirements of designing, fabricating and validating the MEM blades. To meet the project goals effectively, though, the local capabilities need to be supplemented with external expertise to successfully produce a set of quality blades within the project period. Gaps were identified, and strategies to fill those gaps were presented and recommended. Methods and strategies specific to how this will be contracted were provided with respect to the risks identified. In my estimation, based on this and the estimated schedule in Figure 1, it is viable to manufacture the MEM blades in Mexico in less than 3 years with a manageable risk. Using this approach will also contribute to advancing local capabilities to support the Mexican wind industry.


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Table 1 Comparative risk summary of manufacturing in Mexico versus abroad

What can go wrong? Likelihood Importance to Project Risk mitigation actions Improved likelihood

Mexico Abroad Consequences Rating Mexico Abroad

1a Aerodynamic errors – airfoil selection, poor modeling & analysis,

15% 5% Reduced energy production, increased loads

4 External consultants to provide review and oversight

5% 5%

1b, 2

Deficient structural design 15% 5% Reduced operating life


5% 5%

2, 3 Poor manufacturing process design

20% 5% Reduced operating life


10% 5%

3, 4 Poor fabrication from inexperienced labor & techniques



10% 5%

5 Poor project planning and integration

10% 10% Deficient blade, increased cost, delays

4 good selection of project lead, require thorough review and requirements

5% 5%

6 Inexperienced inspection team misses major as-built FRP deviations

25% 7% Poor material, Reduced operating life


10% 7%

7 inadequate preparation for certification process

15% 5% delays and increased cost


5% 5%

7 Large scale design problem not revealed in blade testing


5 Test facility abroad to perform tests in both cases

2% 2%

1, 7 Inadequate lightning protection system

10% 10% Increased operating costs due to repairs


5% 10%

Note: importance rating is 5= critical importance, 1= low importance to project


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Note: estimates from personal communication with TEMACO (mold fabrication), Wetzel Engineering (blade design and fabrication), DNV-GL (certification), NREL (blade testing) and Lightning Technologies (lightning protection testing).

Figure 1 Estimated Schedule for In-Country Manufacturing

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