Bid Consultancy: Case Study for a Real Project in the UK

PART A: Management Project

CHAPTER 1: INTRODUCTION – BACKGROUND AND OBJECTIVES

Management Summary

The company known as Tidal Lagoon Power (TLP) has contracted China Harbour Engineering Company for the development of a six-mile wall for Lagoon Power Plant in Swansea Bay at £300. The development of the tidal power project is based on two objectives; The main objective of this report is to carry out a feasibility study aiming at assessing if the 50% goal (£150 of the contract value) is realizable through the UK supply chain. Secondly, the project will be enabling the client to comprehend the current supply chain in the UK, including; its capability, future capacity regarding meeting the 6-mile walkway of the lagoon project. The project will have a plethora of benefits such as; provision of employment/job opportunities that will enhance economic growth. The project will also produce an extra source of energy to enhance economic development and reduce overdependence on nonrenewable energy resources. The project will provide energy from carbon-emission-free resources and enhance environmental conservation. The other sectors of the economy such as industrialization, transport and communication, as well as tourism will be boosted by the tidal lagoon power project. However, the costs of development of the lagoon power project will include several costs such as capital investments, labor, construction, and consultancies. The tidal power plant will also require the manufacturing and production inputs such as the turbines. Therefore, the project is expected to have different impacts on the UK supply chain that will enhance the growth of the economy. Furthermore, the Chinese company has been awarded the project on the agreement that 50% value of the contract will be supplied by the local supply chain. In this context, the UK supply chain is expected to benefit from supplying engineering, production, manufacturing and construction needs for the project.

1.1 Background of the Project

China Harbour Engineering Company (CHEC) has been awarded a deal worth £300 to construct a six-mile wall for Lagoon Power Plant in Swansea Bay. The company known as Tidal Lagoon Power (TLP) has contracted China Harbour Engineering Company but on several conditions. According to the terms of the contract, CHEC will open a base in the United Kingdom and spend £150 (half of the project value) on the British workforce, supply chain as well as partners. In this context, UK prime minister David Cameron perceived the contract as a “win-win” situation for both UK and China. The entire lagoon project is worth £1bn and is operational from 2018. Furthermore, the lagoon project would offer close to 1,850 jobs for constructors (BBC News, 2015).

The chief executive officer of Tidal Lagoon Power, Mark Shorrock stated that he had had a vast experience in working with Chinese; he could speak in Chinese and was convinced that China had the ability and the capabilities to deliver projects as per the time and budgetary allocations. Furthermore, TLP (UK), and CHEC (China) would work jointly for the future Asian projects. In his response during the Prime Minister’s Questions, David Cameron stated categorically, that the project would be based on Swansea Bay, but he was convinced that tidal power had a vital significance (BBC News, 2015). He admitted to having seen the project plans, and he believed that they were worth making progress that could attract investment into the United Kingdom. According to Mr. Cameron, the project was a win-win deal for both of the counters. While the Chinese company gets the contract and benefit from the foreign investment, the UK citizens will get jobs in the construction taskforce as well as the supply chain. Moreover, the UK will become a beneficiary of the unique source of power; thus, boosting its foreign investment and its local economy (BBC News, 2015).

The project could also be used as a roadmap to future investment with CHEC. CHEC is one of the largest companies in the world, specialized with marine engineering contractors as well as investors. CHEC would enhance its growth over the UK and Europe over the coming decade. Lin Yi Chong, the CHEC’s president, said that Swansea Bay Lagoon would act as a pioneering scheme capable of introducing the new energy option to the world. For CHEC, Swansea Bay Lagoon project would stand out as a cornerstone in the business development strategy in the UK as well as Europe as a whole (BBC News, 2015). Some of the known facts of the project included but not limited to the following;

  1. a) Swansea Bay Lagoon project would be the first lagoon power plant in the world. There has not been any other lagoon power project in the world; Swansea lagoon power will come out as a pioneering project. There must be challenges associated with the new project. However, the project would be successful, and there will be a potential benefit to both countries as well as companies. The Swansea project will work as a case study for a successful generation of alternatively new energy. Therefore, the two countries, as well as the two companies, will reap the benefits of pioneering/monopoly of the new energy technology. The two companies will win contracts on a global scale to construct a similar project in different lagoon environments all over the world.
  2. b) The design life for Swansea Bay Lagoon project was 120 years. In the 120 years, the project would be subjected to multiple political, economic, as well as
  3. c) When fully operational, the Lagoon Power Plant will produce 500GWH of electric power per annum. Therefore, the project had the potential to generate enough electric power to serve over 155,000 households every year (BBC News, 2015).

1.2 Objectives of the Project

The main objective of this report is to carry out a feasibility study aiming at assessing if the 50% goal (£150 of the contract value) is realizable through the UK supply chain. In this context, the study will be assessing the UK supply chain together with its labor and goods resources to see if it meets half the value of the contract. The study seeks to answer questions such as what is the value of the US job market regarding the Supply for 50% of the contract. The study will also assess the UK services and goods market regarding the Supply of manpower, capital, as well as technology, and financial capability to meet the 50% value of the contract. Therefore, the study will assess the following factors; labor supply, Supply of goods, and technology within the UK. The factors herein will be related to the capability of their supply chain to meet 50% of the deal.

1.2.1 Stakeholder Analysis. The project will have a plethora of stakeholders ranging from local communities, local authorities and the official consultancies. In this case, the local communities will be involved in the provision of an appropriate working condition. In this case, the project will consider the provision of the conducive environment so that the local communities do not face the negative impacts of the development such as pollution. Furthermore, the project will offer employment opportunities to the local community on the basis of the supply chain. The local communities will be in direct and indirect contact with the project as well as its impact. Therefore, the project needs to cater for things such as corporate social responsibilities and provision of a clean environment. The local authorities form part of the stakeholders. The project needs to adhere to the local government regarding issues such as environmental conservation and appropriate waste disposal. The official consultancies need to be engaged in carrying out studies, as well as giving information concerning the previous studies. In this manner, the client and the project owners will be well positioned to understand the possible risks and success factors of the project.
1.2.2 Cost-benefit analysis

According to Munday (2020), the Swansea lagoon tidal and wave power project is estimated to spend £m750. The total output the economic activity of the project was estimated at £m457.7, and the total output GVA was estimated at £m172.5. Therefore, the total value of the output was £m 630.2. The difference between the cost of investment and the total output was (750-630.2) = £m 119.8. Therefore, the project would seem to make a loss since the output was lower than the cost of development. However, there would be a creation of about 5,540 employments per year. Again, there are cost reduction strategy as well as development of other sectors of the economy that will lead to a gross value addition of £m 173. In this manner, the project would be viable since the benefits will surpass the costs (Munday, 2020).

 

 

1.2.3 SWOT Analysis

Strengths

From within the tidal power project, some of the strengths includes accessibility to the cheap water transport that can be efficient for the provision of the materials needed in the construction. The task force is also highly experienced for provision of quality services. The project has received sufficient funding and can contract highly specialized persons and companies (Munday, 2020).

Weaknesses

The new technology of marine renewable energy is still under the development stages; the project is likely to face teething problems due to inconsistency in knowledge. Again, the project will use both British and Chinese workers; there would be a communication barrier in the project (Munday, 2020).

Opportunities

From without the project, there are many opportunities such as diversification of the products such as enhancing tourism that can earn foreign exchange. Foreign exchange can be used to boost other sectors of the supply chain as well as the economy. Another opportunity is the improvement of the communication and transport networks whereby the project will benefit from the expanded imports and export routes within Wales as a result of the tidal power project (Munday, 2020).

Threats

The major challenges of the tidal power project come from the high costs of production and manufacturing of the essential devices for the project. Another threat would be competition from similar service providers who may compete with the company in production of similar services in Europe and other parts of the world(Munday, 2020).

 

1.2.5 PESTEL Analysis

Political Factors

The UK and Welsh governments have given the green light to the project. The government has issued funding for the project. The government has also supported the research and pilot projects for development of the marine renewable energy. The conducive political environment in the UK makes it an appropriate destination for the project. The political stability in the UK enhances the sustainability of the project and the investment herein (Stingheru, Gasparotti, Raileanu, and Rusu, 2018).

Economic Factors

The project will offer employment opportunities to different people and companies such as engineers and contractors. The provision of employment opportunities either directly or indirectly is expected to expand the economy. The project will require different goods and services; therefore, the manufacturing and production supply chain members will benefit from the tidal power project (Stingheru et al., 2018).

Social Factors

The project is expected to provide employment opportunities to the local communities. A part from employment, corporate social responsibilities such as provision of transport, communication, and social amenities will be advocated (Stingheru et al., 2018).

Technological Factors

The tidal power project comes with a new technology that uses marine renewable resources to generate power. The technology requires initial investment in construction, manufacturing, as well as installation of the turbines that run on wave and tidal energy. The technology is new and the tidal power project will be the first of its kind in the world. There will be a high involvement of the engineering and construction technologies for efficient output.

Environmental Factors

The environmental consideration of the project includes the conservation of the marine ecology. In this case, the project is expected to enhance the sustainability of the environment by promoting the biodiversity in the marine environment. The project is also expected to utilize the marine resources without disruptions in the marine life such as fish. The project is also expected to embrace effective waste management to enhance environmental safety. More specifically, the project will be involved in prevention of environmental pollution and climate change. In an attempt to comply with environmental conservation measures, the project will use the renewable energy to generate electricity. The energy production will involve the application of tide and wave energy that does not emit carbon dioxide and other effluent gases (Stingheru et al., 2018).

Legal Factors

The project has been licensed by relevant authorities in the UK based on the 2008 Planning Act as a nationally significant infrastructure project (NSIP). The local authorities are in charge of NSIPs in the UK. Therefore, the inspection and control are consented by the local authorities. The dredging and construction regulations are expected to follow the regulations of the Marine License applications. Furthermore, the project is also expected to be answerable to the natural Resources Wales (NRW) that represents the Wales Government (Stingheru et al., 2018).

1.2.6 Future of the Supply Chain

The improvement of the economy would enhance supply chain capabilities in the future. The growth in the economy as a result of the provision of an extra energy would enhance the development of industrialization. Other sectors of the economy such as tourism would be expected to develop due to the existence of the project and its new technology. The development in the employment opportunities would enhance the standard of living leading to an enhanced population growth. As a result, there would be an availability of more labor and other resources in the future. Therefore, the supply of goods and services is expected to increase in the future as a result of the increased outputs of the project (Stingheru et al., 2018).

CHAPTER 2: SUPPORTIVE EVIDENCE

2.1 Introduction

The tidal power generation has a plethora of potential benefits to the UK and its citizens. The coastal area of Swansea experiences some of the world’s highest tides that can be harnessed for power generation. There exist several areas, especially on the west coast with shallow sloping seabed; such areas form the potential sites for construction of the tidal lagoon infrastructure.  Mainly, the supply chain for the new tidal power plants offers a significantly huge opportunity for the manufacturers within the United Kingdom. The construction of the Swansea Bay Tidal Lagoon was projected to start in 2018 as a pathfinder/pioneer of the international and UK tidal lagoon projects. The awarding of the planning permission was done in 2015; thus, marking the commencement of a uniquely exciting industry in the UK. Apart from enabling the UK to harness its natural resources, the project would be essential in tackling the energy challenges in the UK. The Swansea Bay Tidal Lagoon power project would also give rise to positive domestic investment that would sell the UK’s new industry to oversea markets (The Manufacturer, 2020).

2.2 Infrastructure Investment

The Tidal lagoons are worth billions of pounds on the basis of infrastructure investments. The capital expenditure was split into four categories; the cost of turbines and generators, together with the electrical equipment, sluices, and power generation cost, was estimated at 36%. The costs of the turbine housings as well as civil engineering, were estimated at 38%. The cost of marine works, such as the construction of the seawall, would cost 18%. Finally, 18% of the project value would be spent on design and other services of the Swansea Bay Tidal Lagoon power project (The Manufacturer, 2020).

Therefore, the Swansea Bay Tidal Lagoon power project will offer immediate/direct opportunity to engineering, manufacturers (steel and other industries), as well as construction experts in the UK. The contracts to be won by the UK manufacturers, constructors, and engineers would total to >£800m. The UK government offers the opportunity for 65% of the capital to be utilized on the pathfinder projects within the UK; in such cases, half of the project value would be spent while the project lasts in the UK. As a necessity, the project would produce power from numerous turbines and generators. Therefore, the project would connect the tides in Welsh with the rest of the manufacturing regions in Britain (The Manufacturer, 2020).

The manufacturing and assembly of the turbine components, as well as the generators, were classified into five categories; fabricated metals, steel casting, electrical and power electronics, and machining. In this context, all these resources will be supplied by UK companies and contractors. Therefore, the Swansea Bay Tidal Lagoon power project is beneficial in providing jobs, employment, and business opportunities to the UK residents.

Furthermore, about 65% of the capital expenditure of the project on turbines and generators will come from the UK. In this manner, the UK manufacturers would win substantial contracts to supply the goods and services (The Manufacturer, 2020).

2.3 Swansea Bay Manufacturing

The Swansea Bay Tidal Lagoon power project will offer business opportunities for different UK based manufacturers. For instance, Andritz Hydro (British majority components) will be contracted to construct the turbines. The machining, as well as pre-assembly of the turbines, will be carried out at the Turbine Manufacturing Plant; such a facility is newly constructed in Swansea Bay City Region for the purpose of turbine and generator assemblage. The area between Kings and Queens Dock (Swansea Bay) will harbor the Turbine Manufacturing & Pre-Assembly Plant (100m-long facility). The facility will be utilized in receiving the major components of the turbine from the manufactures located in Wales and the rest of Britain. On-site, the machining, as well as assembly of the first sixteen 7.2m-runner-diameter turbines, will occur. The facility, as well as future-proofed of the exponential development of the market, will offer direct employment to up to 100 skilled personnel (The Manufacturer, 2020).

Furthermore, over 150 project workers will be accommodated in the onsite office residence area. The new site will also offer heavy fabrication of the steel components. The full assembly of the turbines will occur on the site where the turbine housing will also take place. After the assessment of the feasibility of the 7.2m-runner-diameter tidal lagoon turbine as the pathfinder project, the standardization of the lagoon industry productivity would be essential to incorporate the 8m-runner-diameter turbine design. Therefore, the project has a viable future that promises productive expansion of the power generation capacity of the tidal lagoon power project (The Manufacturer, 2020).

2.5 The Benefits of the New Technology

The benefits of the new tidal wave energy cannot be exhaustively covered in a single statement. Indeed, there are several opportunities that would be rise from the new tidal and wave power technology. Significantly, there are three major objectives of the tidal stream and wave-generated power in the UK. The three major goals/objectives of the industry are economic, environmental, and energy goals. The economic goal would entail an understanding of economic development, such as the creation of employment. Therefore, the economic status in the UK will be developed by the creation of employment opportunities in the process of generation of electricity. The development of new electricity energy production and the new technology would create an extensive growth of industries within the neighboring areas. Therefore, the adjacent areas would have an advanced creation of jobs, industries, companies as well as the production of quality goods and services. The growth in the economy will not only be realized in the Welsh region but also within its neighborhood (Fanning, Jones, and Munday, 2014).

The Wales region in the UK has been identified as a source of important resources. Therefore, by harnessing its potential to generate electricity, there will be an additional resource coming from the region, hence, meaning an improvement in the economy. Straight from the initial financial stage of the project, the regional development of employment, as well as economic returns, are potentially viable. The growth in renewable marine energy would enhance the creation of jobs due to the increased demand for people and companies to offer goods and services (Fanning, Jones, and Munday, 2014).

2.6 Why Wave and Tidal Power in the UK?

The focus of the project is to generate electricity in the Wales and UK region using the wave and tidal stream tools instead of the tidal impoundment. The United Kingdom focuses on reducing the emission of greenhouse gas by 80% by the year 2050. Such a target can only be met via the transformation of the technologies used in the UK. In this context, the renewable energy sources form a potential part of electricity generation technology that meets the environmental goal, energy goal, as well as the economic goal. The generation of electricity from renewable resources such as onshore and offshore winds are well understood. However, the application of marine technology such as tidal and wave to generate electricity is only faintly understood due to inadequate commercial-scale practical evidence (Fanning, Jones, and Munday, 2014).

The size and potential of the UK marine resources influence the scope of the tidal and wave technology in the generation of electricity. The capacity of the wave resource in the UK is estimated to range between 40 TWh and 70TWh per year. The tidal stream resource in the UK gas been estimated to fall between 12 and 29TWh per annum. Unfortunately, utilizing higher-velocity tidal streams is associated with high costs of installation, design, and service. For instance, the cost of electricity derived from tidal and wave resources would reduce by approximately 75% (£100/MWh) in 2025 as compared to 2012. Therefore, a massive investment in the innovation and attainment of the economic significance of harnessing renewable marine power resources (Fanning, Jones, and Munday, 2014).

Therefore, the UK government has been involved in analyzing the influence of the costs of private capital, uncertainties, as well as costs of development of the new marine renewable energy solutions. The government has been working together with various capital assist to develop the funds for subsidies as well as obligatory requirements/policies for the development of the new marine renewables. Although the technology is still being developed, there have been forecasted short-term benefits of marine renewable energy resources. For instance, it was projected that by 2020 about 200-300MW tidal and wave marine electricity would have been installed. According to the RenewableUK, the value of the UK’s tidal and wave power sector will be £6.1 billion by 2035. In its projection, the RenewableUK postulates that close to 20,000 jobs will be created by the industry by 2035 (Fanning, Jones, and Munday, 2014).

The potential of the Wale’s tidal and wave energy has not been lost; the region is a devolved UK major renewable electricity developer with its own unique targets to meet. In this context, the Welsh government believes in its potential to become the leading party as far as renewable marine energy is concerned. The Welsh government’s energy policy statement indicated that the Wales region has a relatively strong regional wind as well as marine resources that can be utilized to meet almost all the needs for low carbon power generation from renewable energy resources. The Energy Policy Statement aims at the tidal and wave power since the Wale region is a leader of marine resources in the world. The funding of the marine renewable energy strategy has already been done to kickstart the exploration of the potential marine resources. Furthermore, the Wales government has also supported West Wales’ Marine Energy Pembrokeshire-a marine center of first based on a collaborative public-private partnership development (Fanning, Jones, and Munday, 2014).

The Marine Renewable Strategic Energy Framework analyzed the potential of the Welsh marine resources and discovered the capacity of installing 1.5 to 6.5MW remedies in distinct locations. The Welsh Government committed to developing 10% of the renewable marine energy resources (9TWh/year) for harnessing the tidal and wave resources along the Welsh coastline by the year 2025. Currently, the project aimed at Pembrokeshire since it has a well-developed grid connection, port facility, as well as a substantial amount of practical resources in Wales. Apart from the Welsh regions, the entire European Union is expected to benefit from the tidal and wave electricity generation projects. For this reason, the European Union has also offered structural funding for the development of the facilities to harness the Wales marine power resources. The research and development funds have also been provided by the EU because of the expected economic returns of the project to the region; the employment and manufacturing opportunities are expected to boost the economy of the EU. The manufacturing industries, as well as private investments into the new marine energy sector, are expected to produce other benefits such as enhancement of the economic productivity of Wales’ waters (Fanning, Jones, and Munday, 2014).

There were four demonstration projects in 2013 planned along the coast of Pembrokeshire. Additionally, the Marine Current Turbine (MCT) developed and tested a prototype tidal device aiming at the development of the full-scale commercial facility in Northern Ireland. In this manner, the entire EU has been advocating for the development of new marine energy technology. The policymakers, energy regulators, as well as the governments, have been supporting the preliminary explorations of the potentiality of the Wales region to generate marine power. Therefore, the start, progress, and continuity of the wave and tidal power projects will not face significant barriers concerning government regulations. The new tidal and wave power generation approaches have been viewed as positive solutions to energy demands, economic development, as well as environmental conservation (Fanning, Jones, and Munday, 2014).

There exist direct and indirect impacts of the new tidal and wave power generation associated with economic development. The direct impacts are associated with the activities of the project. The input-output analysis indicates that there would be a final demand that increases due to the accelerated need for manufactured products within the new industry. In this case, the producers would struggle to meet the increasing demand and thus producing direct employment of the human and capital resources. The development of the design and construction of the devices (tidal and wave devices) would create an increased demand for industrial output, such as supplies. Therefore, the UK’s supply chain will be engaged in the provision of the goods and services needed to develop/construct the facilities. On the indirect impacts, the UK supply chain will be involved in the indirect provision of the fabrics and metals used in the construction of the facilities (Fanning, Jones, and Munday, 2014).

The new marine energy technology is significant in meeting the local energy demands as well as environmental conservation strategies. The tidal and wave technology would generate extra electricity to the grid and thus meet the energy requirements in the UK. In this context, the UK energy regulation departments have hinted at the future increase in demand for energy. Therefore, the increased industrialization and growth in the population demands increased energy consumption. In order to meet the extra energy demands, the renewable energy approaches are significant solutions towards reduction of overdependence on the nonrenewable sources. The increased costs of fuels such as fossil fuels due to import regulations would also be relieved due to the development of the new renewable energy (Thomas, Mason-Jones, Turner, Davies, O’Doherty, O’Doherty, Mason-Jones, and Murphy, 2013).

2.6.1 Effects on Employment

Renewable energy technologies are associated with energy, economic, and environmental goals. The economic goals are linked to the social-economic goals met through the creation of employment as well as employment diversity. During times of economic recession, there has been an increased desire for sustainable energy; such energy solutions are necessary for economic development. Therefore, an investment in the decreased fossil fuel energy, as well as reducing the pollution due to emissions, would be effective in influencing employment creation. In return, economic development would be realized amidst different socio-economic crises (Fanning, Jones, and Munday, 2014).

The research and studies on renewable marine energy resources have been oriented towards the creation of resources assessment with technical viability as well as impacts on the environment. The economic and social-economic development opportunities have not been effectively explained following the development of such new technologies. Surprisingly, the social acceptability of any of the renewable marine energy technology would entail the creation of jobs/employment; thus, determining the success and sustainability of the projects. Therefore, there exists an imbalance in the current research efforts, funding, as well as the socio-economic impact on the coastal communities—the relationship between the tidal wave power technology and the impact on employment complicated. While making the connections between marine renewable energy and employment opportunities, it is not likely that parallel relationships may occur. Therefore, the policies and governance of the environmental impact, as well as technologies involved herein, may impact the employment opportunities in either way. In this context, the challenges on the technology and the natural resources policies may lead to the creation of job opportunities or even loss of jobs due to incompatibility with the market demands (Fanning, Jones, and Munday, 2014).

Furthermore, there exist numerous generalized issues concerning the employment effects due to the increased investment in renewable marine resources. For instance, the scope of the study on the impact of the new energy technology will regard accounting for employment and economic effects. In many instances, the studies are oriented towards ‘green jobs’ with incomplete accounting of the employment, poor understanding of the economic costs, and crowding of the other industries by marine technology. Therefore, there has been limited attention placed on lowering environmental costs through the application of low carbon electricity generation methods. Furthermore, the studies have not sufficiently covered the increased savings on healthcare, and the benefits of reduced risks and overdependence on non-renewable energy imports. Therefore, comprehensive studies may be essential in reducing the high cost of electricity consumption on the basis of each household (Fanning, Jones, and Munday, 2014).

Furthermore, the tidal and wave energy would be part of the targeted emission-free energy. Throughout the world, there has been an advocacy for carbon-emission free energy solutions. The increased interest in the green-energy (carbon-emission free) has been linked to the impacts of environmental pollution such as global warming. Global warming is a major threat to the lives of people, plants, and animals in the world. Global warming has been positively correlated to the increased emission of greenhouse gases such as carbon dioxide to the atmosphere from the burning of fossil fuels. Global warming has been related to the extinction of plant and animal species due to increased earth surface temperatures. Global warming has also been associated with climate change, such as unpredictable weather patterns such as heatwaves, floods, and storms.

Furthermore, the life of animals and plants are affected by floods and excessive heat; thus, causing the disruptions in the biodiversity. The environmental conservation advocates support sustainable business models that support environmental conservation. The development of the tidal and wave energy facilities that use renewable energy resources agrees with the environmental conservation policies. The tidal and wave power generation approaches do not produce carbon dioxide. Therefore, the new marine renewable energy solution doesn’t pollute the environment. Instead, the tidal and wave energy is in line with the UK and global regulation of carbon dioxide emissions. In such a manner, the technology entails the application of the fuel sources that do not pollute the environment. The marine power is, and the industry is part of the coveted green economy that enhances environmental protection and environmental safety. The reduced ecological pollution also contributes to the reduction of the risks of the development of diseases such as respiratory diseases associated with the emission of effluent gases. Adoption of the tidal and wave energy would enable the country to benefit from indirect savings due to reduced costs of healthcare (Thomas et al., 2013).

Mainly, the marine renewable sector incorporates a combination of different companies as well as industries. The supply chain entails the procurement, pre-commercialization, and contracting stages that require different players. The supply chain members involved in each part of the project are uniquely specialized to enhance the provision of the right services, goods, and technology. Therefore, the project will require a substantial availability of financial firms, legal firms, marine service experts, technologists, engineers, contractors, as well as project developers. The UK population has a wide variety of highly skilled personnel and companies to offer the task force and products needed in marine renewable energy projects (Thomas et al., 2013).

 

 

2.6.2 Input-Output Analysis

Input: Development and Operational Spending

Source (Munday, 2020).

The project is expected to use £m 755.9 as gross spending. The spending within the wales will be £m 299 while v 108.5 will be spent on manufacturing and production. The project will also use £m 187.5 for construction while about £m 3.0 will be used on the market services (Munday, 2020).

Out-put: Development & Construction

Source (Munday, 2020).

The manufacturing and production is expected to stand at £m 169.7, and the value of the construction output at £m 223.3. All the other values of the output are indicated in the table above illustrating that a total of £m 453.7 will be produced by the economic activities while £m 172.5 will be realized as Gross Value Added (GVA) (Munday, 2020).

Another objective of the project will be enabling the client to comprehend the current supply chain in the UK, including; its capability, future capacity regarding meeting the 6-mile walkway of the lagoon project. Therefore, the report will give the client a better understanding of the UK supply chain; the client will be assisted in making sound decisions concerning the investment. The client will learn more about the available goods and services in the UK and how they are related to the project. In such a case, the budgetary allocation of the funds, human capital, procurement, and technology would become enhanced. The client will also use the report to develop well-informed plans for the project resources, such as time and monetary resources. The feasibility study will also assist in the development of the viable organization of human resources, capital, as well as finances to assist in realizing the start, progress, success, and continuity of the project. It must be noted that the life span of the project was forecasted at 120 years-hence demanding viable strategic planning. Without a clear definition of the project objectives, over the 120 years, the project would be faced by different challenges that would jeopardize its continuity. The challenges related to the supply chain would curtail the provision of goods and services to the project. The sustainability of the project over the 120 years, would require a sustainable supply chain. In this case, the supply chain in question would be responsible for the availability of the goods and services required by all the stages of the project. A good understanding of the UK supply chain would enhance the planning, procurement, and budgeting for the success of the project.

 

CHAPTER 3: STUDY OF GANTT CHART

The Gantt Chart below illustrates the 24-weeks’ timeframe (6 months) activities that will be carried out by the study. The introduction (inception meeting) will entail the consensus between the client and the consultancy. The meeting will be used to express the significance of carrying out the research concerning the market analysis, stakeholder analysis, as well as industrial analysis. The Gantt chart represents a representation of the time allocations for each task to enhance the budgeting on the time resources.

A summary of the major parts of the Gantt chart is provided below;

Introduction Meeting

The introduction meeting will be used to kick-start the entire research project. In this meeting, the client will be informed about the purpose of the study, the objectives of the study as well as the study requirements. The meeting will assist the client and the consultant to create bonds for efficient communication. The meeting will give way to the second and third and final meetings that will fine-tune on the minutes and agendas of the previous meetings. Throughout the meetings, the client will be given time to interact with the consultant by asking clarifications of various concepts.

Objective 1: Stakeholder Mapping, Customer Survey, and Market Analysis

In this case, the researcher will take five weeks to identify, prioritize, and map the stakeholders. The client will be given an opportunity to familiarize himself with the stakeholders such as the financiers, local government, environmental agencies, as well as contractors. The client will also be allowed to interact with stakeholder’s analysis data. The researcher will also carry out customer surveys that will assist in the development of the customer’s perception of the project. The market analysis will be conducted to enhance the understanding of the renewable marine energy industry.

Objective 2: PEST Analysis

The PEST analysis will be conducted to enlighten the client concerning the political, economic, social, as well as technological impacts of the study. Renewable marine energy is a new technology in the UK that can be affected by political influence, such as lack of government support. The environmental impact of such a project, such as flooding, can impact the development of the project. Therefore, the researcher will explain the political implications of the project, including how the project intends to deal with risks related to political influence. The economic impact of the project and the entire renewable energy industry will be explained in detail. The client will be informed about the economic significance of the project, such as the creation of employment, industrialization, as well as boosting energy productivity. The social impact of the project, such as enhancement of employment opportunities, tourism, as well as development of corporate social responsibility, will be explained. Lastly, marine renewable energy brings about new technology in the development of energy. The technology will lead to the growth of industries and companies that rely on the production, manufacturing, repair, and maintenance of the device such as tidal and wave turbines.

Cost-Benefit Analysis

The client will be taken through the models of the costs as well as the benefits of the project. The client will be allowed to make a viable investment decision based on the cost models and benefits of the project. The researcher will use the cost-benefit analysis to explain the worthiness of the project in the short-run and long-term plans.

Objective 3: Input-Output Analysis

The input-output analysis will be used to explain the fundamental requirements of the project and the products of the project. The researcher will explain the needs of the project, such as capital, labor, professional consultancies, legal fees, research and development, and infrastructure. The researcher will also explain the value of the output of the project, such as GVA, employment, as well as energy. The analysis will important in giving a macro view of the contribution of the project and the entire industry. Such an analysis will enable the client to gauge the reliability of the available resources and the profitability of the project.

SWOT Analysis

The SWOT analysis will be used to assess the internal and external environment of the project and thus determine the success of the project. Both the strengths and weaknesses will be used to assess the internal environments of the project. The opportunities and threats will be used to analyze the external environment of the project. The SWOT analysis will be valuable in enabling the client to understand the project environments for easier management of the challenges/risks that may occur. The SWOT analysis would allow the project owners to plan for the future and enhance the development, growth, and sustainability of the project.

Final Report

The preparation, completion, and submission of the final report of the study will be essential for future reference. Other researchers in the same field can use the findings of the study. The final report can be used in similar future projects to explain the viability of the project. The final project will also be used to assess, monitor, and control the outcome of the project.

 

CHAPTER 4: CONTRIBUTION

The research will enable the client to understand the size of the energy industry in areas of current and potential tidal and wave power. The researcher will use study approaches such as;

The stakeholder mapping will enable the client to identify, locate and understand the roles of each of the stakeholders. The stakeholders in this context include customers, contractors, government entities, and financial organizations. The mapping of the stakeholders will assist the client to understand their distribution, availability and capability to enhance the development and sustainability of the project. The study will also involve carrying the market analysis that will enable the client to understand the size, trends, as well as value of the industry in the UK.

Both stakeholders and market players influence the supply chain within the UK context. Therefore, the study will be significant in enabling the client to understand if the available UK supply chain can support 50% of the project value. Therefore, the study will entail an analysis of the potential of the UK supply chain regarding supporting the 50% value of the project. In this case, the study will be answering the question whether the UK supply chain can successfully support 50% of the project value.

The study will be important in determining the economic impact of proposed developments on energy industry – using benefits and dis-benefits, by looking at:

PEST Analysis

The political influence on the project is essential in either positive or negative effect on the progress. For instance, UK government and other authorities advocated for the employment of the British engineers in the Tidal Lagoon power project. Therefore, the project has to ensure adherence with such directives.

The study is expected to bring about a better understanding of the economic, environmental, social as well as technological impacts of the tidal and wave power projects in wales. The study will also assist in understanding the economic impacts of the tidal and wave energy projects on the supply chain within the United Kingdom. In this case, the study will assist in analysing the market such that the client will understand the availability of the supply chain that assist the success of the projects. The supply chain in this case will entail the goods and services needed in the initiation, progress, and sustainability of the tidal and wave power projects.

The control systems of the turbines, as well as the generators connected to the turbines, would be used for the generation of renewable energy. The manufacturing of the control systems and the generators will be done by GE Power Conversion, a majority British-made component in Rugby. The HV switchgear, as well as control protection systems, will be constructed by the Stafford facility owned by GE. The UK manufacturers will also have a hand in the manufacture of sluice housings and turbines. Therefore, 100% expenditure on the project will be based on UK goods and services (The Manufacturer, 2020).

Cost Benefit Analysis

The study will focus on expounding on the issues related to the stakeholders, the industry, cost-benefit analysis, input and output analysis with regarding the trends in the growth of the marine renewable energy industry in the Wales.

The study will enable the client to determine tidal and wave power projects may enable energy industry activity, by looking at:

Input-Output Analysis

While focusing on the multiplier effect, the study will enhance the client’s understanding of the needs as well as products of the project. The input-output analysis assists in making informed investment decisions based on the availability of the resources and the value of the benefits achievable from the project. The input-output analysis is essential in convincing the sponsors as well as investors to commit their financial assistance.

SWOT Analysis Summary

The SWOT analysis is usually used to determine the environment of a project. The progress of a project is affected by internal and external factors that favor or curtail the success. Therefore, a SWOT analysis is appropriate for assessing the strengths of the project from the inner environment such as organizational culture, qualified personnel, as well as availability of finance. The weakness within the project such as incompetence of the staffs, insufficient funds, as well as organizational and management problems would also affect the progress of the project. The study will also assist in identification of the opportunities of the project. For instance, due to the proposed huge opportunity, the value of the Swansea lagoon power project would be as high as £70bn entering the UK industry. The pathfinder project offers several opportunities for the manufacturers who would join the new industry and create additional jobs and chances of investment. In this context, the manufacturers, suppliers, contractors, as well as engineers, will be hired by the new energy industry as well as other related industries. The creation of employment opportunities for UK citizens is a reasonable move towards the enhancement of the development of the economy. In such a case, the success of the power project would create a competitive advantage for British engineers in the global market. Therefore, money and time have been invested in the Tidal Lagoon power project since the new market offers tremendous opportunities to the Welsh and Britain supply chain. The Welsh and British governments has also been working to enhance the supply chain to meet the increasing demand due to the new energy industry (The Manufacturer, 2020). The identification and analysis of the threats such as competition, environmental risks, insufficient production would be discussed by the study. Such analysis enables the development strategic plans as well as risk assessment and risk mitigation strategies.

CHAPTER 5: CONCLUDING REMARKS

The marine renewable resources in the Wales have a high potential of being harnessed for power generation purposes. Therefore, the tidal and wave power projects in the Swansea lagoon area are viable projects that have three primary benefits. Firstly, the projects would enhance the economic growth by provision of jobs and employment for different people and companies. The growth in the energy industry (marine renewable energy resources) would enhance the development of other sectors of the economy especially the industries. The extensive growth in the economy would also impact the socio-economic development within the UK and its partner countries. In this sense, the projects and other similar projects would benefit both China and the UK in the development of the pioneering technology in the renewable energy. The companies and people in China will share the new technology with the UK such that each country will have socio-economic benefits from the project. The development of the new technology will enhance the growth of other industries and sectors of the economy. Therefore, more employment opportunities as well as economic developments (industrialization will be created).

Due to the economic significance of the project, the UK government and its energy sector agents have invested heavily in the provision of the study and resources for harnessing the marine renewable resources. The success of the project has been anticipated due to the potential of the pilot projects. Furthermore, there has been studies concerned with the feasibility of the marine renewable resources. Therefore, the success of the tidal and wave power projects depends on the efficient studies concerning the market, cost-benefit, as well as input-output analysis.

Therefore, the study herein will be based on the feasibility study of the project on the basis of availability of substantial supply chain. In this manner, the study will be concerned with determination of the potential of the UK supply chain to supply sufficient human capital, financial capital, as well as technology that guarantees the success of the project. Specifically, the study will be interested in determining if the UK supply chain can provide the goods and services needed to meet 50% of the projects value.

 

Appendix

A3 Map

Client Requirements

To undertake a study to estimate the economic effect of the Welsh tidal and wave power generation industry from the marine renewable resources.

The study will enhance the project’s potential to:

 

•      Increase employment/job opportunities.

•      Enhance environmental conservation.

•      Increase the energy supply.

Identify the advantages and disadvantages of these projects on energy sector.

Deliverables

•      Understand the size of the energy industry in areas of current and potential tidal and wave power by looking at:

•      Stakeholder Mapping

•      Market Analysis tools

•      Determine the economic impact of proposed developments on energy industry – using benefits and dis-benefits, by looking at:

•      PEST Analysis

•      Cost Benefit Analysis (Focusing on economic benefits and dis benefits)

•      Determine tidal and wave power projects may enable energy industry activity, by looking at:

•      Input-Output Analysis (Focusing on the Multiplier Effect)

•      SWOT Summary

 

Contribution

 

·         Will indicate an outstanding understanding of the size, growth, success, sustainability, trends factors of the energy industry within the context of marine renewable energy exploitation by analyzing the market size and economic factors. The study will also cover the stakeholders as well as market data analysis from research and government resources.

·         Will determine the economic significance of proposed developments on the energy industry; by applying the PEST analysis and Cost benefit analysis.

·         To determine how the tidal and wave projects will enable the marine renewable energy industry to grow in Wales using the input-output analysis. The study will also look at the economic impacts of the relationship between the various key players.

Reflection

•      Highlights the need for further research, based on the economic impacts of renewable energy developments on the Welsh tourism industry (particularly industry based research)

•      This Report contributes to raising awareness regarding the economic impacts that onshore wind energy has on the energy sector in Wales.

•      Further research into economically focused case studies is on going

•      Further Development of Supporting Theory is ongoing

•      Porter’s 5 model of investment was adopted due to a difficulty in linking to the other models and relevance to the objectives.

 

 

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