The balance of stakeholder interests in utility ratemaking has shifted over the past decade toward achieving social policy goals. A more sustainable balance is required if utilities and regulators...
The Big Build
Utility infrastructure projects face high costs, labor shortages and global competition for resources.
equipment vendors covering risk for delivery and performance of their equipment. Also, as many owners identify the true costs of this risk avoidance, they are electing to accept and manage the risk themselves. This is all set against a backdrop of uncertainty regarding upcoming carbon legislation, which seems imminent as the socio-political climate changes.
Fortnightly: What role does WorleyParsons have in keeping utility infrastructure construction costs under control?
Martin: We believe our primary role is assisting owners in identifying and managing the risks inherent in investment decisions and through experienced and effective project implementation. This includes extensive “real world” experience, industry knowledge and best practices, and services and techniques such as strategic planning, financial analysis, total project delivery, and plant operations.
It also means collaboratively building quality and value engineering into equipment specifications, effective management of the global supply chain, schedule management and contingency planning, and constructability and modularization, all underpinned with a culture of zero harm in health, safety and environmental matters tailored to meet our customers’ business needs.
Fortnightly: Increases in costs for skilled and craft labor are a problem and some expect a lack of skilled workers going forward. How is WorleyParsons dealing with these issues?
Martin: WorleyParsons is continually expanding our resource base around the country and around the world. Working with the most advanced systems and tools in the industry, WorleyParsons is able to “work share” between office locations. Instead of moving people, we bring the work to them, thereby improving the quality of services to our customer and employee satisfaction while lowering costs.
Fortnightly: How deep is WorleyParsons’ backlog of utility infrastructure projects or projects in general?
Martin: All of our customer sector groups, including hydrocarbons, minerals and metals, infrastructure and power are experiencing an increase in business, which we expect will continue for several more years.
Fortnightly: Are you seeing more interest in new utility infrastructure construction or in refurbishment of older facilities?
Martin: In a carbon-constrained economy, we believe it will be more important for utilities to “get more with less.” By aggressively pursuing air quality retrofits, efficiency improvement programs, power uprates, forced outage reduction programs, etc., utilities are able to maximize generation returns on their capital investment.
In new generation trends, we see pulverized coal projects in the advanced stages of development being completed, an increased emphasis on demand reduction and demand management, quality renewable energy projects, and a return to gas, via simple- and combined-cycle projects.
We also anticipate a renaissance of the U.S. nuclear industry as one of the only carbon-free baseload power generation options, and more focus on renewable solutions.
Fortnightly: What types of utility infrastructure projects has WorleyParsons recently been awarded?
Martin: WorleyParsons is involved with the entire range of utility projects. We are currently working on new nuclear, modern supercritical coal, advanced coal gasification, natural gas, renewable energy projects, including solar, wind, hydro, geothermal and biomass, as well as transmission and substation projects. In addition, a substantial percentage of our efforts remain in emissions reduction and efficiency improvement projects.