Renewables is the fastest growing segment in the energy sector. Read on to learn how BCG is helping companies understand this new market segment.
Those that succeed have found the right fit between the capabilities they have and the opportunities that exist in the market. They also prioritize innovation along with efficient operations, to keep pace with or lead the dramatic price reductions that continue to occur.
Company leaders contemplating entering the renewables sector or expanding their renewables business must answer the following critical questions:
The pace of change in large-scale renewables requires continuous innovation. Evolving markets and regulations create new opportunities and shift traditional value pools. Companies must:
Rapid developments in renewables technology, cost, and scale make operational excellence an imperative for all participants in this space. With developers regularly breaking records for low-cost energy supply, businesses need to proactively drive costs down to remain competitive.
At the front end, cost levers include value engineering and excellence in engineering, procurement, and construction (EPC). Value engineering can optimize product specifications, design, and go-to-market strategy to manage margins. In project preparation and execution, companies typically realize significant value through a comprehensive assessment, including processes such as site selection, component design, quality assurance, and supply chain.
Operations and maintenance (O&M) optimization is important to control the lifetime costs of the asset. While leaders often focus on improving O&M process and productivity, there are two additional questions to address. The first is what support to provide and for how long; this is a significant way to influence returns. The second question is who will provide that support, OEM or asset owner. Finally there is the question of how to improve cost, time, and quality of ongoing O&M.
Digital is a critical tool in the effectiveness of each of these levers. During project development and planning, digital tools can identify optimal sites and simulate plant economics. During design and engineering, advanced grid integration models and tools can improve component design and standardization. Micro-weather forecasts and supply chain and inventory optimization are able to enhance manufacturing construction. Digital tools for O&M include remote plant operations, smart control of assets and components, optimized energy trading based on production forecasts, and real-time component monitoring and diagnostics.
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BCG’s consultants and industry experts partner with leading companies to define and optimize their renewables business. These are some of our experts on this topic.