The Energy Information Administration predicts that world consumption of marketed energy is expected to increase 50 percent from 2005 to 2030. Nearly half of this projected increase in energy consumption is expected to be in the form of electricity. Significant capital investment into electric generation and infrastructure will be required to meet this global demand.
High public and political visibility and a seemingly evergreen regulatory and global environmental policy coupled with high capital requirements pose significant challenges to the construction of new power plants. To mitigate some of these challenges, the industry has responded by focusing on new technologies that reduce emissions and by investigating construction techniques such as modular construction to lower capital costs.
While the future technology of the power industry is exciting, many of these innovations are years away from being commercially ready. As the industry continues to develop these technologies, capital will need to be invested in order to construct new power plants and to increase the energy output of their existing facilities to meet the near-term global energy demands.
Over the past 20 years, IPA has helped our clients reduce the costs of their capital investments by evaluating their proposed projects using statistical analysis and comparing their planned project performance against data we have compiled from over 11,000 completed capital projects executed all over the globe.
More than 700 of the projects we have collected involve the production, distribution, and/or the transmission of power. We have collected data on coal, nuclear, natural gas, solar, hydroelectric, wind, and cogen projects.
These 700 projects represent over $60 billion of capital investment and range in size from $100,000 to $4 billion. The projects in our database represent various project types, from revamp/retrofit to greenfield/new site development projects. While many of the projects utilized standard technology, we have data from a significant number of power projects that used new technology.
Many in the power industry have sought methods to reduce the amount of capital required for their project, not realizing that significant savings can be achieved by employing good project practices. Because IPA has collected detailed information on actually completed projects in your industry, we have identified practices that will reduce your capital cost by up to 30 percent, accelerate your project schedule by up to 40 percent, and improve your asset’s operational performance for all of your capital projects by as much as 20 percent. Perhaps more importantly, we will inform you of practices that have been statistically proven to make capital projects more predictable from a cost and schedule perspective.
IPA can also provide you with cost and schedule benchmarks for your proposed projects to help align investors around your project's estimated capital cost and schedule. These benchmarks will also ensure that you are not significantly underestimating the cost of your project, thereby reducing the threat of cost overruns.