January 2, 2020

Commercial Management

What are Commercial Management Jobs in Renewable Energy?

Traditionally, there are three phases to the life of a Renewable Energy asset – Development, Build and Operations. Commercial Management features across all three (as does Technical) with different priorities at each stage.

At the project development stage, the Commercial Management team are, at a most basic level, responsible for commercialising the project. This could take the form of Business Development (originating the opportunity, bringing partners on board), equally, it could be a support function to a business development team ensuring that contracts are carefully considered and awarded; that procurement is optimised and potential project risks mitigated. A project is considered as ‘under development’ up until the point that it reaches FID (Final Investment Decision). At this point, it is expected that all of the key project agreements have been completed, that the land, permits, consents, design and other milestones have been achieved. 

Moving into the build phase, the role of the Commercial Management function shifts from one of commercialising the project to one of delivering the project to operations. Where the commercial management team have been focused previously on structuring agreements and procuring third party services, their attention now turns to successfully executing these contracts and continually managing risk. At this stage it is common for the commercial management team to work closely with a project management function providing on-going contracts advice. A strong commercial manager will know the technical and procedural requirements for each of the contracts that they are overseeing and act as the focal point between work packages and different stakeholders across the projects. 

As a project is nearing the end of its build phase, it will go through commissioning and be handed across to operations. A commercial management function would expect to remain involved to close out any contractual variations and handle claims processes (should the need arise). Projects moving into day-to-day operations will go through FAC (Final Acceptance Testing) and often have an initial warranty period with the equipment suppliers. Depending on the project and organisation, this hand-over might be handled by a commercial management team or the Asset Management function. The role of an Asset Manager is closely linked to Commercial Management but typically with operational projects (not always). 

What is the Job of a Procurement Manager?

The role of a Procurement manager is closely related to broader Commercial Management in Renewable Energy. Typically a Procurement manager will develop and manage purchasing plans and strategies across project development, construction and operations. They will negotiate favourable long-term contracts with key suppliers, manage contract negotiation with regards to price and terms, optimise the efficiency of procuring equipment (using costing models) and managing the logistics process.

What Job Titles are used within Renewable Energy Commercial Management?

Quantity Surveyor – Quantity surveyors manage the costs on a construction project. They help to ensure that the construction project is completed within its projected budget. Alternative job titles for a quantity surveyor include ‘cost consultant’, ‘commercial manager’, ‘cost manager’ and ‘cost engineer’.

Contracts Engineer / Contracts Manager – A Contracts Engineer / Manager deals mainly with writing up and preparing paperwork and working on the contractual conditions of a project; between the clients and the engineers.

 

Commercial Manager – A Commercial Manager job title is the broadest term and can cover any and all of the above outline.  

 

Commercial Director – A Commercial Director can expect to lead a Commercial Management team. Typically this position will oversee a wide range of functions.

 

Purchasing or Procurement Manager – A Procurement manager will develop and manage purchasing plans and strategies across project development, construction and operations.

 

Claims & Variations Advisor – A Claims & Variations Manager will lead negotiations post delivery and look to settle / conclude agreements from any alterations made to the original scope during the build phase. 

 

Commercial Lawyer – Commercial Management is a function of Contract Management and as such, day-day work requires sound legal knowledge. It is common for organisations to employ the services of lawyers (In-House and External) to support the Commercial Management function. Many Commercial Managers have a legal background. 

What types of contracts are common in Renewable Energy?

EPC / EPCI

NEC

JCT

FIDIC

BIMCO

Bespoke

Example Archived Commercial Management in Renewable Energy Vacancy

Commercial Manager – Offshore Wind Project Delivery

Commercial Manager sought by international fund for one of the UK’s largest Offshore Wind projects. The Commercial Manager shall, in support of the Commercial Director, manage all the contracts between the project company and third parties for the execution of the design, fabrication, construction, installation and commissioning of the offshore wind farm. Such contracts include not only main EPCI execution but also specialist consultancy, engineering services, equipment supply and third party interfaces.