Wind Energy – New FIDIC Contract
Work has started on developing a new FIDIC contract for offshore wind farm projects to meet a growing need in the market as decarbonisation gathers pace across the construction and infrastructure sector.
FIDIC is the International Federation of Consulting Engineers.
Responding to this need the FIDIC contracts committee has set up a new task group (TG14) to look at the area of renewable energy and the development of a contract for offshore wind farm work. Given that offshore wind projects are an ever-growing area given the net zero agenda, it is very timely for FIDIC to be developing a contract in this field.
FIDIC forms of contract have been increasingly used for renewable energy projects, especially in the wind farm subsector, both onshore and offshore. For offshore wind farm projects, FIDIC forms have been heavily amended mainly to address these projects’ specific requirements, so it is important to develop a balanced form of FIDIC contract dedicated to and addressing the special features and requirements for the offshore wind farm sector.
The task group includes a range of experts with knowledge of the offshore wind farm sector. They include engineers, lawyers, project specialists, contractors and experts from the energy and power industry. The group met for the first time on 4 July 2023 (see picture above) under the leadership of FIDIC contracts committee vice-chair Mahmoud Abu Hussein, a senior manager at Dolphin Energy, who also drafted the task group’s terms of reference.
The group will develop a standard form of FIDIC contract specifically designed for offshore wind farm projects which will address their special features and challenges.
The new contract will reflect FIDIC contracts’ long-standing core principles of fair and balanced risk allocation that is reasonably proportionate with the differing risk bearing capabilities, objectives and obligations of wind farm project key stakeholders.
The contract will also be flexible, adaptable and suitable for various offshore wind farm project locations, requirements and delivery methods and enable proper interface and alignment between the main contract(s) and subcontracts and also facilitate a timely and efficient procurement process for projects to support the urgent global energy transition efforts and net zero objectives.
This is vital work by FIDIC, the significance of which has been further underscored by recently intensified global initiatives aimed at combating the rapidly deteriorating effects of climate change.
Coupled with soaring global energy prices due to post-Covid surging demand and the war in Ukraine, it is more important and urgent to speed up the energy transition away from fossil-based energy sources and to promote decarbonisation and reduce CO2 emissions to meet global net zero targets.
The development of this much-needed FIDIC contract for offshore wind farm projects will help the construction and infrastructure sector to play its part in speeding the energy transition by providing the industry with a robust, fair and equitable contractual framework for undertaking work on projects that will make a positive impact on the environment.
The anticipated delivery date for the new contract is yet to be confirmed but is expected to be towards the end of 2025.