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Power Generation Operations

Power Generation

The power generation industry is experiencing unprecedented challenges. Growth has flattened, renewables and distributed energy resources are on the rise, the mix of traditional fuels (coal, gas, nuclear) is changing, and governments are redesigning policies. This is not a cyclical phenomenon but indications of a transformation that will reshape the industry.

Thriving in this market requires power producers to rethink their business strategy. They need to increase their efficiency to remain competitive and change their way of working to achieve continuous improvements in productivity.

For sustainable, long-term success, the power industry should take a cue from traditional manufacturing. The general manufacturing industry in the US has managed a half-century of pricing pressures using advanced measures to achieve 2% to 3% improvements in productivity annually.

To gain similar results, power producers should take a comprehensive approach:

  • Make rapid cost reductions to regain competitiveness in the short term and fund the journey.
  • Implement a sustainable improvement culture to maintain results in the long term.
  • Adopt digital generation technologies to prepare for the future.

Rapid Cost Reductions

Although most power generators have already embarked on cost and efficiency improvement programs, they can do more in several areas:

  • Benchmarking. By benchmarking their performance against that of their peers, generators can understand their current competitiveness and quantify the potential of cost and efficiency improvements.
  • Applying battle-tested measures. There are 100-plus measures generators can apply to improve their efficiency in asset operations, asset management, working capital reductions, or support functions. By selecting and applying the relevant ones, producers can tap into a global best practice experience and achieve benefits much faster.
  • Improve top-line results through increased availability. Efficiency improvements are not only about cost cutting. By optimizing outages or reduction of time back to service, generators can grow their revenues.

Sustainable Improvements

Power generators must make sure that their changes will increase savings potential in the long run. In order to achieve sustainable operational excellence, they must take steps to establish a continuous improvement pathway. For example, generators can take steps to:

  • Assess power plant processes to identify maturity gaps and best practices within the organization.
  • Implement a lean production system and establish a sustainable cost improvement culture.
  • Establish a culture of continuous improvement.

Digital Generation Operations

The power industry can take advantage of a range of emerging digital tools and techniques—from sensoring tools that trigger alarms through digital operational centers to fault prediction—to achieve changes in efficiency across the power generation value chain and optimize the output of plants in short and long term. Digital tools offer an opportunity for power producers to master the challenges of continuously improving operational efficiency and setting a new standard of operations across leading power plants.

The pressures facing the power industry are here to stay. Power producers must rethink all aspects of their operations and make changes that generate significant short- and long-term impact. Those who lead this change will emerge as long-term winners in the market.

Learn More About Power Generation Operations

Meet Some of BCG’s Experts in Power Generation Operations

BCG’s consultants and industry experts partner with leaders in the power industry to create sustainable, long-term success. These are our experts on this topic.

  • Leads BCG's power markets and regulation topic
  • Gas pricing and transportation; storage tariffs
  • Deregulation strategy for gas and power
  • Chemical companies
  • Power and gas, utilities, power generation, and distributed energy resources
  • Utilities, including lean systems and administration
  • Lean
  • Training and enablement curriculum in lean
  • Power hgeneration
  • Wholesale energy
  • LNG
  • Renewables
  • Value-based management
  • Growth strategy
  • Corporate finance
  • Performance measurement
  • Power and utilities/energy
  • Organizational redesign in the energy sector
  • Efficiency programs in utilities
  • Transformation and turnaround
  • Power generation (operations)
  • Power markets globally
  • Nuclear power
  • Benchmarking analysis in power generation
Benjamin Vannier

Managing Director & Partner

Philadelphia

Power & Utilities

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