Federal Distributed Energy Project Implementation Process Phase 5: Construction and Performance

During phase 5 of the distributed energy project implementation process, the design, construction, and performance or operations and maintenance (O&M) period are completed. The specific process used will depend on the selected procurement option. Below is general information that applies to many procurements.

Step 1: Complete the Project Design

Once selected, the project developer begins with a schematic design (typically 35% of the design) that includes the size and type of the major system components and the connections between components. Within appropriation projects, the procurement option where design review most often occurs, most of the review effort takes place during the schematic design phase. Subsequent design phases (e.g., 50%, 75%, 95%) only develop the systems previously identified in the schematic design. Major changes after this early phase of design are unlikely to be considered. The commissioning agent typically aids in the schematic design review and develops protocols by which system performance will be evaluated in step 3.

Best practices for designing for system maintainability, safety, and efficiency include the following:

• Include industry considerations raised in the RFP process
• Consider factors added during contract negotiations
• Incorporate due diligence results
• Include code considerations
• Incorporate utility interconnection requirements and study results
• Assemble an interdisciplinary team.

Step 2: Begin Construction

The project developer orders the equipment and begins construction or installation of the distributed energy system. The contract administrator enforces the terms of the contract. The project developer's construction manager ensures that the various trades (e.g., roofers, plumbers, electricians) are coordinated so that the different components work together as a system. Close coordination with building occupants and management will help to minimize issues that could impact the facility's mission. Much of this is accomplished through frequent meetings between the construction manager and facility management and occupants.

Best practices for step 2 include the following:

• Establish a single point of contact
• Review milestone progress frequently
• Maintain close contact with utilities
• Involve inspection officials early
• Keep management and occupants informed.

Step 3: Commission the Distributed Energy System

With construction complete, it is important to commission the distributed energy system to ensure it works to specification. During the design phase, the commissioning agent should have documented the intent of the design and created the protocol by which the system performance will be evaluated, along with any required instrumentation. After the system is installed, the commissioning agent assesses the degree to which the system fulfills the intent of the design. Almost all large systems have at least some deficiencies that need to be corrected.

Benefits of commissioning a distributed energy system include the following:

• Ensures complete and accurate documentation by updating documents to "as built" conditions
• Verifies that the plant is structurally and electrically safe before initiating operation
• Ensures the plant performs as expected
• Reduces O&M costs
• Verifies that the number and type of components (e.g., panels, inverters) comply with specifications
• Tests components and the system
• Prepares commissioning report

Correct commissioning is required for a project warranty.

Step 4: Accept the Project

Following construction, the government must officially "accept" the completed project. The contracting officer's technical representative submits to the contracting officer (CO) documentation that the project is complete and operational, and all requirements have been met. The CO then sends a signed letter to the contractor accepting the project, and stating that invoicing may commence if it is a performance contract. The CO documents acceptance and the starting date of the performance period. It is up to the agency technical staff to inform the CO decision if the project can be accepted.

Items to verify prior to acceptance include:

• All specified equipment has been installed
• The installed project has been inspected, tested, and commissioned, with associated reports reviewed and approved by experts
• Documented government witnessing of tests and inspections
• Corrections to any and all discrepancies that were noted in inspection reports or punch-lists
• Training on O&M has been conducted for site staff; O&M manuals have been reviewed by experts and approved, including spare parts lists; and spare parts specified in the contract have been provided
• As-built drawings have been reviewed by experts and approved
• Utility interconnection agreement and incentives paperwork has been submitted and approved
• Manufacturer warranty has been registered
• Installed system has performed properly for 30 days.

Partial acceptance of a project may be warranted if the project includes multiple independent measures or if the project is implemented in phases. Partial acceptance would allow the contractor to invoice for the completed measures or phase and deliver energy to the facility even as other work continues.

Step 5: Perform Operations and Maintenance

This step covers the period of time that the distributed energy system is in operation. It is important to take care of the distributed energy system through regular O&M and to confirm that it is working according to specification and warranties through measurement and verification.

Within some procurement options, a contractor performs O&M. However, even if a contractor is responsible for O&M, site staff should have some operational knowledge such as emergency shut-down of the system. Every system should include at least some operational indicators so that staff can easily see if the system is working properly. Many agencies select a measurement and verification protocol that provides enough information to determine how well the system is working, and in many cases to allow occupants and visitors to interpret the performance of the project.

A system performance evaluation might use satellite data, models of incident solar radiation, resource estimates, and a near real-time performance evaluation. Inspections could be conducted through remote imaging, aerial inspection, or visual/infrared/electroluminescence.

O&M may be required per the system warranty. Additional benefits to O&M include increased efficiency and energy delivery, decreased downtime, and extended system life.

Warranty management best practices include the following:

• Follow instructions carefully to not void a warranty
• Document data to demonstrate that a module is underperforming
• Plan for labor to remove, ship, and reinstall an underperforming module
• Get a warranty for the manufacturer to "repair and replace" rather than "supplement"
• Consider an "insurance-backed guarantee" in which warranty claims will still be processed in the event of liquidation, entry into receivership, or closure of a dealer.

Step 6: Decommission or Close Out the Project

When the performance contract ends, depending on the stipulations of the contract, the federal government may have the option to extend a performance contract, conduct a follow-on procurement, purchase the distributed energy system at fair market value (determined at time of sale), or abandon the distributed energy system in place. When the equipment is no longer functional, it must be disposed of. It can be replaced by a new distributed energy system or the space can be renovated for another application.

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