Capital Productivity

Capital programs in today’s power industry must address regulatory uncertainty, increasing competition, mismatches between capital availability and demand, legacy mind-sets and practices, and the erosion of in-house technical expertise. By turning capital excellence into a functional strength, companies can benefit from better-maintained assets, greater customer satisfaction, and higher shareholder returns.

We help clients with capital productivity in all business areas, project types, and stages: portfolio optimization, project concept and design, lean construction, contract and contractor management, contract close-out, and commissioning support. We help clients reassess the logic for allocating capital expenditure (capex) throughout the business and redesign planning and budgeting processes to link project funding to corporate strategy and value-creation potential.

Conventional Generation

As lower gas prices, constrained demand, tighter environmental controls, and shifts to renewable energy combine to exert pressure on generators’ margins, operational excellence is at a premium. Capturing performance improvements will remain a priority, as conventional generation continues to play a major role in global energy supply: by 2035, the projected increase is to 3,700 gigawatts (GWs), 75 percent of it outside OECD countries.

We work with many of the world’s largest power-generation fleets to secure lasting improvements in frontline operations. We help our clients develop capabilities to build a strong foundation for performance excellence. We provide access to an unparalleled global network of specialists who have deep expertise and hands-on experience in the power industry, lean operations, and energy efficiency.

Our distinctive field-tested process, supported by learning modules, IT packages, and lean techniques, helps clients identify improvement opportunities, generate and evaluate ideas, set priorities, and track results. We tailor each program to the relevant generation technology—fossil, hydro, or nuclear—targeting heat rates, individual productivity, and outage times.

By following our systematic approach to evaluating risks and returns, clients can make better decisions on sourcing mix, the wholesale/retail balance, long-term versus short-term sales, and hedging programs. We help clients align commercial and operating incentives to capture opportunities and drive sustained impact.

Our pragmatic emphasis on value creation enables clients to capture operational gains quickly, adjust performance in real time, and track progress effectively. To ensure that transformation delivers continuous improvement, we focus on long-term shifts in mind-sets and behaviors as well as short-term performance gains.

Corporate Transformation

To succeed amid the uncertainties, utilities must stay alert to the evolution of earnings pools and ensure their organizations are flexible and responsive enough to capture opportunities as they emerge in new markets and along the value chain. We help clients design and execute large-scale change programs that engage people at all levels of the organization in finding ways to continually improve performance.

We work with clients to shape a vision of the utility of the future, link targets to business outcomes, and create initiatives to strengthen performance, build skills, and modify mindsets and behaviors. We help leaders become role models, senior teams forge shared commitment and direction, and organizations develop their own capabilities for managing change so that the impact of a transformation lasts long after a project ends.

To tackle the challenges of future power markets, we help clients move from legacy organizations and functional silos to modern streamlined and flexible structures built around business priorities. By reducing management layers and pushing decision making down through the organization, utilities can energize the front line, connect with customers, and meet their business goals.

We work with clients to build a fact base of corporate-center costs and performance, probe the reasons for shortfalls, explore where and how to make savings, and create coherent improvement initiatives. We help develop new lean implementation processes for managing soaring IT investments and support regulated utilities in articulating how corporate spend creates value for customers.

Electric Transmission & Distribution

We help utilities with capital expenditure decisions and strategic, operational, and regulatory challenges; advise component manufacturers on strategy; support financial investors with evaluations and due diligence; and serve governments on policy design. We offer a quick, risk-based approach to optimize capex at both project and portfolio levels, using internal and external comparisons to improve project design and estimation, procurement, contracting, and project management. We help clients save up to 20 percent of their capital expenditure through design-to-cost, 4 percent through best-practice contractor management, and 8– to 10 percent through our asset management methodology.

We use proprietary tools and lean methods to help clients reduce operating expenditure while improving safety, reliability, and customer service. Grid operators can capture savings of 10 to 25 percent in frontline operations, engineering planning, work scheduling, and supply-chain optimization.

To address the causes of commercial and technical losses and bad debt, we have identified a set of levers that are capable of boosting earnings by 5– to 10 percent. For sustained improvement, we help clients redesign their organizations to align central intelligence with regional operational hubs.

As utilities roll out advanced meter infrastructure, grid automation, and dynamic energy management, we help them analyze social and regulatory benefits and build a case for government support. Drawing on our extensive expertise in business technology, we develop insights into trends affecting the industry, from big data to the intersection of operational and information technology.

Energy Marketing, Trading, & Risk Management

Energy markets are undergoing rapid change. Excess natural gas and power-generating capacity is dampening price volatility, renewable operators are setting new trends in dispatch and prices, and regulatory moves are prompting banks to exit the business. To capture opportunities and avoid threats, organizations need to find new ways to deal with markets and manage their risk exposure.

We serve utilities, merchants, oil and gas companies, commodity trading houses, banks, and hedge funds across the value chain, including asset optimization, trading, origination, and contract structuring. We help clients upgrade marketing and commercial activities, identify and pursue growth opportunities, and develop and execute strategies.

Defining strategic posture

We work with clients to assess their strategic position against market developments, identify growth opportunities, and advise on strategic moves. Our analysis includes geographic conditions, regulatory environments, competitive stances, and liquid and illiquid horizons, and redefines the role and scope of supply, asset-backed and proprietary trading, and origination activities.

Refining the operational model

We help clients clarify the resources and capabilities they need to execute their strategies and work with them to establish appropriate structures, interfaces, and processes. New operating models are geared to integrating activities dispersed across countries and commodities, and strengthening performance and risk measurement, management, and culture.

Optimizing commercial practices

As trading becomes more challenging in an increasingly competitive marketplace, companies need to improve their commercial practices to maintain profitability. We help clients assess the sophistication of their trading and origination, hedging, corporate risk, and governance, and identify improvements to boost their profits and risk/return profile.

Removing cost and complexity

Heavy investments in trading units and technology platforms have led to a proliferation in structures and systems, often at the expense of efficiency. We help clients to redesign complex organizations, processes, and legacy IT systems and strip out cost and complexity.