Oven Mountain Pump Hydro Project

Scope: Conduct Local Market Testing

Industry: Renewable Energy

Project Cost: $1 billion

The Oven Mountain Pumped Hydro Energy Storage project is a $1 billion, 600 megawatt, 'off river' facility located adjacent to the Macleay River between Armidale and Kempsey, in the New England region of NSW. The construction of this major piece of Renewable energy infrastructure is being overseen by Oven Mountain Pumped Storage (OMPS).

Hughes et al (HEA) were engaged by OMPS to assist with a market analysis that was tailored to meet both Australian Industry Participation (AIP) Plan requirements, and key strategies as required under the NSW Electricity Infrastructure Investment Act 2020 No. 44 and as committed to in the terms of the Long-Term Energy Services Agreement (LTESAs).

372 Total Suppliers

85.5% of Manufacturers conduct 50% of their work in Australia

Overview

Hughes et al (HEA) were engaged by OMPS to assist with a market analysis that was tailored to meet both Australian Industry Participation (AIP) Plan requirements, and key strategies as required under the NSW Electricity Infrastructure Investment Act 2020 No. 44 and as committed to in the terms of the Long-Term Energy Services Agreement (LTESAs).

The objective of the market analysis was to consider specialist elements of hydropower-manufactured items, market services, and areas of mutual benefit between the region and the project. The scope also required HEA to implement our “Local Target Calculator” to measure local and regional market capability and capacity to supply goods, services, and workforce.

The utilisation of this tool enabled HEA to undertake assessments on project deliverability and resourcing approaches, which included a sensitivity analysis on market responses to major project investment. A “Point in Time” local market assessment was also undertaken, identifying risks and opportunities.

Following the completion of these assessments, HEA then facilitated working groups within OMPS to develop the ICN Gateway Expression of Interest (EOI) process. Upon agreement on the capability and prequalification’s required under the various work packages, the information was forwarded to ICN NSW for rollout through their ICN Gateway ecosystem in time to support a community engagement roadshow for OMPS, which was supported by ICN NSW’s Regional Manager.

Following the conclusion of the industry EOI response process, HEA worked with ICN to obtain the EOI data, before undertaking validation and input review of the information provided. The review was undertaken utilising pre-determined weighted criteria based on OMPS obligations and requirements. The final market analysis was presented to OMPS with the results and actions also incorporated into the OMPS Industry and Aboriginal Participation Plan (IAPP) to be utilised by OMPS as an artefact in future procurement activities

    1. Collaboration with client teams and other key stakeholders produces better local industry engagement outcomes.

    2. The importance of hydroelectric construction in the renewable energy mix to underwrite manufacturing jobs.

    3. The active role hydroelectric projects can have in the industrial development of Renewable Energy Zones.

    4. The importance of hydroelectric power in the development of short term regional economic benefits and long-term employment in STEM aligned industry.

    5. Working with ICN NSW Regional Managers provides excellent support and ensures a high level of information input from the supplier market.

  • The were several challenges that arose in undertaking market analysis for the OMPS project. These included:

    • Level of Australian market experience in hydro sector and subsequently relatively new approvals and expectations from various government levels,

    • Regional market supply chain experience in major projects combined with cumulative impacts of other regional projects on supply chain resourcing and capability,

    • Ensuing regional economic benefit and sustainability in an untested market and with an inexperienced supply chain.

    To address challenges surrounding local market capability, and resourcing availability, HEA implemented our “Local Target Calculator” to measure local and regional market capability and capacity in the supply of goods, services and workforce. The “Local Target Calculator” used by HEA has been developed over a number of years and allows for efficient and effective client co-design, data management and professional procurement input.

    The utilisation of this tool enabled HEA to undertake assessments on project deliverability and resourcing approaches, which included a sensitivity analysis on market responses to major project investment. A detailed risk and opportunity local market assessment was also undertaken, with recommendations to inform OMPS regarding:

    • Tendering processes,

    • Design optioneering,

    • Constructability,

    • Procurement bundling strategy,

    • Contracting strategy,

    • ·Supply chain capability development,

    • ·Workforce capacity development,

    • ·Cumulative impacts,

    • ·Regional partnerships.

  • A successful ecosystem is one built on open and transparent communication, a consistent improvement of practices and approaches and a system framework within which to work.

    In building ecosystem technology to support OMPS, HEA again established a shared Basecamp project management system for the rollout of this contract. Utilisation of Basecamp enabled everyone, in every role across the project, to store, work on, discuss, decide and deliver on project requirements. All project information, tasks, events, documents and communication were able to be stored and organised in one centralised place, fostering greater collaboration and open communication within the HEA and OMPS teams.

    To compliment the Basecamp system, a private SharePoint cloud server for OMPS and HEA teams to access was also established, to make sharing of early research and documentation and revisions of Plans and associated documents easier.

    Creating great ecosystem synergies, the HEA team also collaborated with ICN to identify the capabilities of their system and to design the OMPS project specific ICN Gateway page with outputs that would provide intelligent data to conduct a market analysis, and ultimately support the development of OMPS Industry Participation strategy.

  • Upon completion of all assessments, the HEA team worked with OMPS to understand the outputs from the assessments and in turn design the parameters for procurement and employment engagement. HEA made it easy for the OMPS team to attend facilitated sessions designed to capture project requirements quickly and accurately, and from these sessions the parameters for formal engagement (EOI process) with the market were set.

    HEA liaised with ICN NSW during this development stage, drawing on their knowledge and expertise to ensure that what would be provided to the market would meet both client and industry best practice standards. Upon agreement on the capability and prequalification requirement under the various work packages, the information was then forwarded to ICN NSW for rollout through their ICN Gateway ecosystem.

    The HEA team also supported a joint OMPS and ICN NSW roadshow in the New England region. Furthermore, HEA worked with ICN NSW in the establishment and management of the ICN Gateway page, and information releases.

    Following the conclusion of the industry EOI response process, HEA again collaborated with ICN NSW to obtain the EOI data, and then undertook validation and input review of the information provided by ICN including a desktop and case study review. HEA utilised a pre-determined weighted criteria based on OMPS obligations and requirements in undertaking the data review and validation process