How to Write an RFP for On-Site Power – Specs Vendors Need
You have a site, a load and maybe a gas line nearby. Now you need someone to build the power plant, and you are about to send an on-site power RFP (request for proposal) to five vendors. Here is the catch: vendors quote what you ask for, and if each one guesses at what you meant, you get five proposals that cannot be compared. What does a good on-site power RFP need to say?
A good on-site power RFP describes the load, the site, the fuel and the reliability target in enough detail that every bidder is pricing the same plant. That means a load profile in MW (not just a peak number), a recent gas analysis with supply pressure, site conditions such as elevation and summer high temperature, the voltage and point where power is delivered, and a clear redundancy and availability requirement.
It also says who will own and run the equipment and exactly how pricing must come back. Leave any of those out and vendors fill the gap with their own assumptions, usually the ones that make their price look best.
What Is an On-Site Power RFP Supposed to Do?
An RFP for on-site power has one job: make bids comparable. You are not asking vendors to design your project from scratch. You are asking them to price a defined problem so that the differences between proposals reflect real differences in equipment, efficiency and terms, not differences in what each bidder assumed.
It also protects you later. Whatever the RFP says becomes the baseline for the contract. If the RFP never mentioned a 105°F design day, do not be surprised when the plant sags on the hottest afternoon of the year and the vendor points out that you never asked.
Start With the Load, Not the Equipment
The most common mistake I see is an RFP that opens with "we want six gas engines." Lead with what you need to power, and let vendors propose how. Somebody may come back with a better answer than the one you had in mind.
Give bidders these load facts:
- Facility load in MW: both day one and at full build-out, with the phase schedule between them.
- Load profile: is it flat around the clock, or does it swing? A data center runs close to flat; a pumping station or a mine may not.
- Largest load step: the biggest block of load that can switch on at once, in kW, and how fast.
- Power quality limits: allowed voltage and frequency deviation during those steps.
- Auxiliary loads the plant itself must carry, such as gas compression or cooling for the generators.
Here is a quick worked example of why the facility number matters. Say the IT equipment draws 20 MW and the design power usage effectiveness (PUE) is 1.3. Facility load is 20 MW × 1.3 = 26 MW. If the plan grows to 40 MW of IT in phase two, the full build-out facility load is 40 × 1.3 = 52 MW. A vendor who only saw "20 MW" would quote a plant half the size you eventually need, with switchgear and gas piping sized to match.
Also be precise about MW versus MWh. MW is the rate of power you need at any moment. MWh is energy over time. Vendors size engines and turbines on MW; they estimate fuel and maintenance on MWh.
What Site and Fuel Data Do Vendors Need?
Vendors need enough site and fuel data to know what the equipment will really produce on your ground, with your gas. Ratings on a brochure are at standard conditions. Your site is not standard. Gas turbines are rated at ISO conditions (59°F, sea level, 60% relative humidity) and lose output as the air gets hotter and thinner, and engines derate in heat and altitude too.
| Data item | Why the vendor needs it |
|---|---|
| Gas composition analysis (recent lab report) | Heating value and methane number decide engine rating, tuning and whether gas conditioning is needed |
| Gas supply pressure, minimum and maximum | Turbines often need higher pressure than engines; low pressure may require a compressor |
| Elevation and design temperatures | Hot, high sites lose output, so more units may be required |
| Delivery voltage and point of interconnection | Sets transformer and switchgear scope |
| Noise limits at the property line | Drives enclosures, silencers and layout |
| Site plan, soils and access | Affects foundations, crane access and delivery of heavy equipment |
| Water availability | Matters for cooling options and some emissions controls |
If the gas comes from a field gathering system rather than a transmission pipeline, say so plainly and attach more than one analysis. Wellhead gas can swing in composition, and engine and turbine vendors will want to see the range, not one good sample.
How Should You Specify Reliability and Redundancy?
State the reliability target as an outcome, then name the minimum design rules you will accept. An outcome sounds like "the plant shall deliver 26 MW to the main bus at least 99.9% of hours in a year, measured as described in Appendix C." A design rule sounds like "N+1 at the generator level, with any single unit out for maintenance."
Ask for both, because they catch different problems. If you are unsure which redundancy level fits your load, our guide to N+1 vs 2N redundancy walks through the trade-offs. Then cover these points:
- Generator ratings: Require prime or continuous ratings under ISO 8528 for a plant that runs every hour. Standby ratings assume limited annual hours. The Cummins summary of ISO 8528 generator set ratings lays out the hour and load limits for each class.
- Operating mode: Islanded (no utility connection), grid-parallel, or both with a transfer between them.
- Black start: Can the plant restart with no outside power? If yes, say what starts first and how.
- Transient performance: Maximum frequency and voltage dip for your largest load step, and the recovery time.
Who Will Own and Run the Plant?
Decide the ownership model before the RFP goes out, or invite bids on two clearly separated options. A plant you buy outright, a plant built under an engineering, procurement and construction (EPC) contract, and a plant a third party owns and sells to you as energy as a service are three different deals. They carry different pricing, risk and responsibility.
In a purchase, you take the equipment, the fuel risk and the maintenance. In a third-party ownership deal, the provider owns the assets and you pay per MWh or per month, often with a minimum term. Mixing these in one RFP without structure produces a pile of proposals that compare apples, oranges and a lease on an orchard.
Be explicit about permits too. Air permits, local zoning, and any gas supply agreement each need an owner. Rules vary by state and by the size of the plant, so check with your environmental counsel or state air agency about what applies. The EPA overview of New Source Review permits is a useful starting point for the federal framework.
What Should Vendors Send Back?
Give bidders a pricing form and require them to fill it in. Free-form proposals look nice and compare terribly. A practical response package asks for:
- Proposed equipment, unit count, and net output at your design hot day, not just at ISO conditions.
- Guaranteed heat rate (Btu/kWh) at stated load points, such as 100%, 75% and 50%, and on which heating value basis (HHV or LHV).
- Capital cost broken out by equipment, balance of plant, electrical, installation and commissioning.
- Operations and maintenance cost per MWh or per year, with the overhaul schedule and who pays for it.
- Availability guarantee, how it is measured, and the liquidated damages if it is missed.
- Guaranteed emissions rates for nitrogen oxides (NOx) and carbon monoxide (CO).
- Schedule from notice to proceed to commercial operation, with equipment lead times listed.
- A numbered list of every exception or clarification to your RFP.
That last item matters more than it looks. Exceptions are where a low price hides its conditions.
A Note on Heat Rate Guarantees
Make sure every bidder quotes heat rate on the same basis. Lower heating value (LHV) numbers look about 10% better than higher heating value (HHV) numbers for natural gas, for the same machine. If one vendor quotes LHV and another quotes HHV, the second looks less efficient on paper even if it is not.
Common Mistakes That Wreck Bid Comparisons
Most bad RFPs fail in predictable ways:
- Giving only a peak MW number with no profile or growth plan.
- Sending a single gas analysis from a good day.
- Asking for "reliable power" without defining it.
- Letting vendors pick the rating conditions.
- Leaving interconnection, gas metering or the substation scope unassigned, so it ends up in nobody's price.
- Allowing two weeks to respond to a complex request. Good vendors need time to engineer a real answer.
An On-Site Power RFP Is Only as Good as Its Assumptions
A strong on-site power RFP does not need to be long. It needs to be specific about the load, the site, the fuel, the reliability target and the deal structure, and it needs a pricing form that forces apples-to-apples answers.
Before you write a word, gather a real load profile, at least two recent gas analyses and your site's elevation and design temperatures. Decide whether you want to own the plant or buy its output. With those in hand, the RFP almost writes itself, and the proposals you get back will tell you something true.