What is an EPC contract?
Historically, EPC contracts have been the mainstay for large-scale energy projects in Australia, including BESS projects. An EPC contract is a fully integrated solution where a single contractor takes full responsibility for the engineering, procurement, and construction aspects of a project, excluding specified grid connection works.
Can a split contracting model reduce EPC costs in Australia?
However, in the current market a limited number of contractors in Australia are willing to take on a traditional EPC contractor role. A split contracting model opens the market to more tenderers for various packages, which may reduce reliance on a limited pool of EPC contractors and reduce overall project cost.
Do EPC contractors receive a PCG?
It is market standard for developers to receive a PCG covering the EPC Contractor’s payment and performance obligations under the EPC Contract. Separate liquidated damages for each supplier/contractor’s scope. LDs rates and LDs caps may be lower than those accepted by an EPC contractor (individually and in the aggregate).
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