The energy sector is the largest source of global greenhouse gas emissions. The IEA’s World Energy Outlook predicts an increase in global electricity demand of more than 70% until 2040. This, despite the current indications of an accelerating low carbon transition, is projected to raise the energy-related CO2 emissions by 16% in the same period. IEA estimates an investment volume of USD 68 trillion until 2040 with 37% thereof in oil and gas supply, 29% in power supply and 32% in end-use efficiency. The major weakness in the energy industry’s low carbon transition is the missing end-use storage medium (with high capacity, low cost, small weight and dimensions, fast recharge cycle, long lifetime and all of that in mass product quantities). Preferential regulatory treatment of renewables has already impacted the income streams and asset values of the generating companies to a life-threatening extent since years and their business model needs urgent adaptation.
Electric power generation and distribution was mostly organized in publicly owned utility companies whereas in the oil and gas industry government involvement was much more limited. In the last decades of the last century, the privatization and liberalization of the energy markets opened up the industry globally across the whole value creation chain. In parallel, growing signs of climate change, the significant environmental impact of fossil fuel extraction and their limited residual quantities began to push for change across the board. A quantum leap in electricity storage technology would, without a doubt, shift the industry towards further substitution of fossil fuels by electricity and decentralization of electricity generation with a big impact on the industry’s organizational structure.
We advise both contractors and OEMs as well as owners and operators across the full spectrum of our expertise, from privately held businesses over publicly traded companies to government owned.
Our expertise and track record in the energy industry is extensive. We have consulted in various key areas:
- Oil and Gas
- Fossil Power Generation
- Nuclear Power Generation
- Renewable Power Generation
- Power Distribution
- Industrial Energy Efficiency
- ‘Big Data’ in Operation and Maintenance
The market trends and environment is challenging for all stakeholders. The stable, non-compete market environment is long gone and electricity has become a low priced commodity traded in spot markets. We offer solutions to owners and operators, e.g. for best suited contractual, technical, and financial setups for their new builds or lifetime extensions projects or how to approach expansion into new geographical regions. We support contractors and OEMs, e.g. to find the right strategy for positioning themselves in global markets, how to participate profitably in suitable projects and help them to identify the best partners for particular projects or find the best solution for a particular customer’s needs.
The division of scope and the risk allocation between the stakeholders has changed significantly. Stakeholders redefined their core competencies and reduced staff accordingly; specialized external service providers took over. Organizational interface management became very important as well as the handling of all kinds of risks and uncertainties. We act, e.g., as independent reviewers of current organizational setups, analyze, evaluate them and propose improvements to achieve the best possible results in project implementations and effective functional line organizations for owners and operators as well as contractors and OEMs; we also take over as interim managers and coaches in key positions.
Technology and Innovation
The advanced economies are the drivers of technological change and fundamental research. The tail end of the global economy will still not have access to reliable electricity supply in 2040, defining technology and innovation totally different. We serve this diverse picture with our global expertise in all major current and forthcoming technologies of power generation and distribution for owners and operators as well as contractors and OEMs in the worldwide energy industry with, e.g., feasibility studies and cost/benefit analysis. And we are, e.g., actively involved in making power to liquid technology commercially available and implementing plant life time extensions with focus on component obsolescence.
Sales and Pricing
Project development and product sales can be a long process and many things can go wrong. It is of great benefit when people with experience on both sides of the process support these efforts in order to stay focused and prevent secondary objectives from becoming priority. Our experienced consultants are exactly the people needed—e.g. be it to support the buyer in his decision making with pricing and costing analyses or guide the seller to a winning bid; or develop such documents and proposals ourselves for them.
Contract Product Negotiation
Both owners and operators as well as contractors and OEMs want to buy respectively sell products and services under the best price—from their perspective, of course. It is important to create a situation that has no designated loser when the contract is signed since this will for sure impact any combination of schedule, budget and scope negatively—total failure in extreme cases. We can, e.g., accompany contract product negotiations or directly act on behalf of the buyer or seller, be it in the forefront or background.
Contract Product Delivery
It is simply impossible to know the future—all the unplanned things that will happen unexpectedly or the planned things that will not happen. This is the true art of contract product delivery: be prepared as much as reasonably possible for potential risks becoming reality; determine necessary action fast when unforeseen events hit and implement it decisively. Our specialists, e.g., support both owners and operators as well as contractors and OEMs in such mission critical situations; we can hands-on drive turn-arounds of problem projects as well as coach the project team to find their way back to success.
Product and plant design works can make or break the envisaged effort and therefore need to be managed very tightly. It is in the very nature of the undertaking that the scope, schedule and budget of the engineering works is not exactly known at the beginning; also measuring engineering progress is much more difficult than checking tangible installation quantities against a plan. We understand this very well and, e.g., advise contractors and OEMs on how to stay within the project constraints or corrective action needed to get back on track as well as owners and operators to maintain an objective view of the earned progress and the estimate to complete. But we also take direct, hands-on roles in engineering management in or clients’ organizations.
Without a doubt, also the business in the energy industry has become more litigious over the years, for various reasons. Should the situation arise that all other efforts to resolve a dispute have failed for whatever reason, the contractually foreseen mechanisms for dispute resolution are set into motion as the last resort. While this appears to be a very legal undertaking—and thus to be performed by lawyers—it is typically a multi-discipline, complex project in itself that is as much ‘technical’ as it is ‘legal’. Our seasoned professionals are, e.g., active in setting dispute resolution strategies, elaborating claim and counterclaim documents, processing records of events or are acting as technical experts in proceedings for owners and operators as well as contractors and OEMs.