The voracious global appetite for energy will continue to grow. As a PwC report observes, there are “…trillions of dollars invested in capital projects around the world” in the energy sector.
Construction of nuclear and fossil power plants, electricity transmission, gas-gathering and processing systems and oil and gas pipelines and storage facilities proceeds apace worldwide. The contributions to the energy mix of renewable resources such as wind, solar and hydro power, though still fractional, are also rising.
Technologies for producing alternative fuels efficiently continue to evolve. Shale, both gas and oil, has come into its own. And increasingly challenging depths are being plumbed in search of conventional fossil fuels.
Much of investors’ interest has focused on energy infrastructure: power plants, utilities, pipelines and like projects. The capital-intensive nature and strategic locations of these assets, along with the long-term nature of supporting contracts, provides stable, reliable cash flows – although returns can vary significantly depending on risk.
Few capital projects are as large and complicated as the construction of energy infrastructure. Project management and oversight, careful strategic planning and enterprise asset management (EAM) are critical success factors and keep managers focused on the asset as a whole – asset management, optimised maintenance, work execution and business performance measurement – from the beginning to the conclusion of the asset’s lifecycle. The acquisition of existing assets requires thorough due diligence.