Enhancing the value of generation assets: PwC’s Generation Contribution Margin (GCM) framework

February 2014
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Enhancing the value of generation assets: PwC’s Generation Contribution Margin (GCM) framework

At a glance

PwC’s Generation Contribution Margin (GCM) Framework provides a simple, consistent approach for measuring, monitoring, and communicating performance across generation operations and portfolio management/trading, promoting better decision making that can enhance the value of the generation portfolio.

Power generation asset owners are under constant pressure to optimize the value of their assets. For electric utilities, prudently managing generation assets and reducing ratepayer costs are essential to meeting regulators’ expectations and avoiding the risk of disallowance. For merchant generation, asset enhancement is critical to the ongoing viability of the business.

Enhancing the value of generation assets requires close alignment between the generation operations group and the portfolio management/trading function. Organizational silos, inconsistent performance metrics and incentives, and poor communication make it difficult to achieve alignment.

PwC’s Generation Contribution Margin (GCM) Framework provides a simple, consistent approach for measuring, monitoring, and communicating performance across generation operations and portfolio management/trading, promoting better decision making that can enhance the value of the generation portfolio.