As the renewable energy sector is blooming, ‘implementors’ are coming to the picture
Within the energy sector, very few companies were prepared to see ‘the renewables’ grow so fast, and the demands going from 1 to 1000 within just a decade. It became almost impossible for operational teams to keep responding to bids while keeping up with evolving technologies. Many of them brought in consulting partners but the need was more in operations and implementation rather than in strategy. For the first time in almost half a century, the demand grew so much that what was needed was the good expertise at the good moment to respond to the one key project and being able to implement it even in the most challenging situations.
Renewable energy implementors have almost became the commando forces of the energy sector. Site managers, engineers, buyers, new technology experts are the new specialists that firms need to respond with efficiency to today’s needs. If today we estimate that over 50% of business projects aren’t generating all the incomes that they could potentially bring to their organization, the number is much higher when it comes to renewable energy projects. The reason is simple: the field is relatively new, firms have limited experience and little feedback on the technologies, yet the demand keeps increasing and they are just not ready to face it on their own. Where strategists or consultants can temporary give you a theoretical response on how to act or re-act in these situations, implementors are here to help you going through the work peak until the completion.
One of the top projects of the Asian Development Bank (ADB) within the coming years is within the energy sector. In Nepal for example, ADB and the Nepal Electricity Authority (NEA) had signed a project agreement for the implementation of the Electricity Transmission Expansion and Supply Improvement Project in April 2012. The project was initially designed to improve Nepal’s capacities and increase its potential energy trades. But the implementation has been slowed down for several reasons: “ADB has identified delay in land acquisition, right of way (RoW) and forest clearance, limited manpower in project implementation agency, and insufficient project management capacity as the major obstacles in the timely implementation of the energy projects”, according to the Himalayan Times (0)
With a good implementation, the major delays could have been avoided and millions of dollars saved. One of the key obstacle was in the poor financial health of the NEA which could have easily been detected by an implementation firm working on the case: “In this regard, ADB has suggested the government to begin full-fledged implementation of NEA’s financial restructuring plan, rationalize electricity tariff and devise an effective plan for loss reduction to improve NEA’s institutional capacity in project implementation”, adds The Himalayan Times.
In an implementation engagement, the consulting team must take the recommendations from the strategy and operations engagement and help the clients meet their targets. In the energy sector and especially within the uprising sector of renewable, meeting the targets can sometimes be tricky. Delays are frequent, costs can be unknown or hidden with the new technologies, and the competencies within the sector have to be looked for, all these reasons make implementation a ‘must’ when it comes to the energy sector.
“We usually start by a specific project for which we build up the optimal solution in order to guaranty its implementation” says Flavien Kulawik, from KLB Group (1). “We associate the three dimensions: advising, to make sure we do the right things, management, in order to do them well, and execution, to be able to do them until the end”, he explains. KLB Group is today one of the leading consulting firms to have placed implementation at the core of their job. For them, implementation represents 90% of the work. Implementation requires much more expertise and knowledge of the field than consulting, as the implementor has to go through the challenges along with the organization and to make sure their strategy will be implemented despite many risks and complications.
Former McKinsey Partner & Worldwide Strategy Practice Co-Leader, Kevin Coyne, takes the hypothetical example of a consulting firm advising an airline to set up a new low-cost airline division: “The strategy calculated that doing this would lead to the airline saving $100 million over 3 years” states Coyne. “The implementation consultants need to determine the pieces of activity required to take all the existing employees within the airline, create a new division, brand it, set up the operating structures and move the employees to the new division. Although the implementation consultants will not do everything, like branding where a brand specialist firm would do the work, they will manage everything.”
This aspect is essential in understanding how implementation works and how it can today be “implemented” within the renewable energy field. We can imagine the concrete need for an energy competitor to take a few steps in order to make a difference within the sector. The steps that can be set with an implementor go from setting up a new division, to transferring employees, setting up a new accounting system, setting the start date, managing the labor unions and much more. Implementors don’t only take control for one project but they can help the organization to transition towards more efficiency and independence in the future.
In the U.S, the renewable energy sector is already involving consulting firms to go on an implementation level. The business has flourished in the past years and in order to keep up, FTI Consulting, Inc. recently announced that it has undergone a period of strategic hiring that included the additions of six professionals with renewable energy and power experience in Houston and Dallas for future market in the green energy sector (2).
2017 should be the year of “the launch of new and renewable energy projects” according to Mohamed Farag from Daily News (3), many major projects should be implemented especially in Europe and the Middle East within the next year.
In Europe, major renewable energy projects including multilateral cooperation are now emerging and we can see the tendency spreading to the old continent as it is involving American actors as well. GE Renewable Energy Europe, led by Jérôme Pecresse is today one of the main actors of the trend by boosting renewable-energy unit with $1.65 Billion wind deal. “It shows GE’s true commitment to the wind industry” Pecresse said (4). The American trend of using implementation firms in that sector could therefore spread more and more in the upcoming years.
“Implementation is not just for the smartest MBAs. It’s for smart people who can roll up their sleeves and literally work alongside a client to solve countless tedious problems and march towards a common goal”, says Michael Boricki from Firms Consulting LLC.
In the field of renewable energy, we should see more and more firms going for implementors to broaden the spectrum of their possibilities. And we should see more and more of these “smart people who can roll up their sleeves” in the field within the next few years. In the long run it should also benefit the entire sector which will be more competitive and will gain in rentability overall.
(0) ADP ‘dissatisfied” with performance of major energy sector projects, The Himalayan Times, January 31st 2016
(1) Flavien Kulawik, KLB Group: ‘Les dirigeants doivent muscler la capacité d’implémentation de leur organisation’, Les Carnets du Business (LCDB), September 15th 2016.
(2) FTI Consulting Bolsters Energy, Power & Products Industry Expertise in Houston and Dallas, newswiretoday, January 12th 2017
(3) The launch of new and renewable energy projects in 2017, Daily News Egypt, Mohamed Farag, January 21st 2017
(4) GE boosts renewable-energy unit with $1.65 Billion wind deal, Rick Clough, Bloomberg, October 11th 2016
Renewable energy implementors have almost became the commando forces of the energy sector. Site managers, engineers, buyers, new technology experts are the new specialists that firms need to respond with efficiency to today’s needs. If today we estimate that over 50% of business projects aren’t generating all the incomes that they could potentially bring to their organization, the number is much higher when it comes to renewable energy projects. The reason is simple: the field is relatively new, firms have limited experience and little feedback on the technologies, yet the demand keeps increasing and they are just not ready to face it on their own. Where strategists or consultants can temporary give you a theoretical response on how to act or re-act in these situations, implementors are here to help you going through the work peak until the completion.
One of the top projects of the Asian Development Bank (ADB) within the coming years is within the energy sector. In Nepal for example, ADB and the Nepal Electricity Authority (NEA) had signed a project agreement for the implementation of the Electricity Transmission Expansion and Supply Improvement Project in April 2012. The project was initially designed to improve Nepal’s capacities and increase its potential energy trades. But the implementation has been slowed down for several reasons: “ADB has identified delay in land acquisition, right of way (RoW) and forest clearance, limited manpower in project implementation agency, and insufficient project management capacity as the major obstacles in the timely implementation of the energy projects”, according to the Himalayan Times (0)
With a good implementation, the major delays could have been avoided and millions of dollars saved. One of the key obstacle was in the poor financial health of the NEA which could have easily been detected by an implementation firm working on the case: “In this regard, ADB has suggested the government to begin full-fledged implementation of NEA’s financial restructuring plan, rationalize electricity tariff and devise an effective plan for loss reduction to improve NEA’s institutional capacity in project implementation”, adds The Himalayan Times.
In an implementation engagement, the consulting team must take the recommendations from the strategy and operations engagement and help the clients meet their targets. In the energy sector and especially within the uprising sector of renewable, meeting the targets can sometimes be tricky. Delays are frequent, costs can be unknown or hidden with the new technologies, and the competencies within the sector have to be looked for, all these reasons make implementation a ‘must’ when it comes to the energy sector.
“We usually start by a specific project for which we build up the optimal solution in order to guaranty its implementation” says Flavien Kulawik, from KLB Group (1). “We associate the three dimensions: advising, to make sure we do the right things, management, in order to do them well, and execution, to be able to do them until the end”, he explains. KLB Group is today one of the leading consulting firms to have placed implementation at the core of their job. For them, implementation represents 90% of the work. Implementation requires much more expertise and knowledge of the field than consulting, as the implementor has to go through the challenges along with the organization and to make sure their strategy will be implemented despite many risks and complications.
Former McKinsey Partner & Worldwide Strategy Practice Co-Leader, Kevin Coyne, takes the hypothetical example of a consulting firm advising an airline to set up a new low-cost airline division: “The strategy calculated that doing this would lead to the airline saving $100 million over 3 years” states Coyne. “The implementation consultants need to determine the pieces of activity required to take all the existing employees within the airline, create a new division, brand it, set up the operating structures and move the employees to the new division. Although the implementation consultants will not do everything, like branding where a brand specialist firm would do the work, they will manage everything.”
This aspect is essential in understanding how implementation works and how it can today be “implemented” within the renewable energy field. We can imagine the concrete need for an energy competitor to take a few steps in order to make a difference within the sector. The steps that can be set with an implementor go from setting up a new division, to transferring employees, setting up a new accounting system, setting the start date, managing the labor unions and much more. Implementors don’t only take control for one project but they can help the organization to transition towards more efficiency and independence in the future.
In the U.S, the renewable energy sector is already involving consulting firms to go on an implementation level. The business has flourished in the past years and in order to keep up, FTI Consulting, Inc. recently announced that it has undergone a period of strategic hiring that included the additions of six professionals with renewable energy and power experience in Houston and Dallas for future market in the green energy sector (2).
2017 should be the year of “the launch of new and renewable energy projects” according to Mohamed Farag from Daily News (3), many major projects should be implemented especially in Europe and the Middle East within the next year.
In Europe, major renewable energy projects including multilateral cooperation are now emerging and we can see the tendency spreading to the old continent as it is involving American actors as well. GE Renewable Energy Europe, led by Jérôme Pecresse is today one of the main actors of the trend by boosting renewable-energy unit with $1.65 Billion wind deal. “It shows GE’s true commitment to the wind industry” Pecresse said (4). The American trend of using implementation firms in that sector could therefore spread more and more in the upcoming years.
“Implementation is not just for the smartest MBAs. It’s for smart people who can roll up their sleeves and literally work alongside a client to solve countless tedious problems and march towards a common goal”, says Michael Boricki from Firms Consulting LLC.
In the field of renewable energy, we should see more and more firms going for implementors to broaden the spectrum of their possibilities. And we should see more and more of these “smart people who can roll up their sleeves” in the field within the next few years. In the long run it should also benefit the entire sector which will be more competitive and will gain in rentability overall.
(0) ADP ‘dissatisfied” with performance of major energy sector projects, The Himalayan Times, January 31st 2016
(1) Flavien Kulawik, KLB Group: ‘Les dirigeants doivent muscler la capacité d’implémentation de leur organisation’, Les Carnets du Business (LCDB), September 15th 2016.
(2) FTI Consulting Bolsters Energy, Power & Products Industry Expertise in Houston and Dallas, newswiretoday, January 12th 2017
(3) The launch of new and renewable energy projects in 2017, Daily News Egypt, Mohamed Farag, January 21st 2017
(4) GE boosts renewable-energy unit with $1.65 Billion wind deal, Rick Clough, Bloomberg, October 11th 2016
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