For the ten largest conventional-generation producers in Europe, annual revenue potential per gigawatt of installed conventional capacity has declined over 40% in real terms since 2005.
In the US, the shale revolution has upended traditional thinking about electric generation just as asset owners are turning away from coal-fired generation. In Europe, asset owners are closing coal and nuclear stations and building gas-fired generation.
Since 2008, the combination of declining coal prices and increasing availability of photovoltaic (PV) and wind generation capacity (promoted by feed-in tariffs for renewables) has caused a sharp decrease in load hours and wholesale prices for European owners of conventional generation.
In response to today’s challenges, power producers have aggressively cut costs to obtain some short-term relief. But companies cannot cost-cut their way to success over the long term. Eventually new value-creation strategies are needed.
Digital transformation affects virtually all work processes:
A leading utility turned to BCG to develop the roadmap for the establishment of a combined-cycle gas turbine (CCGT) control center as part of the company’s ongoing expansion. We identified options for the most efficient and cost-effective approaches to the project, and in the end successfully executed the plan and roadmap.
The results were clear. With the integrated control center, the utility gained significant value and brought the plant to the next level. It secured maximized plant reliability, availability, performance, and cost efficiency.