Overview
The power and utilities sector, which includes power generation, transmission and distribution (T&D), equipment manufacturing, and services, has long been tethered to conventional and established infrastructure. However, the sector is evolving to embrace greener, newer and more efficient technologies, which is forcing players to grapple with a range of complex business issues amid a rapidly shifting landscape and regulatory environment. Capital allocation, development of effective growth strategies, and competitive differentiation are more challenging than ever before. Key trends include:
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Upgrades to aging infrastructure: Older power generation, T&D and utilities infrastructure are undergoing critical revitalization aimed at lowering failure and incident rates, ensuring operability and the ability to meet demand, and reducing unanticipated losses.
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Focus on grid reliability: Historical underinvestment has led to an increasing rate of power outages over the past 20 years, drawing the attention of local government, companies and communities.
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Increased regulation to address safety concerns: More rigorous regulatory requirements call for more testing and maintenance work. This has created opportunities for value-added service providers.
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Network optimization: Network optimization helps utilities withstand and bounce back swiftly from supply shocks. Smart power grids, utility network expansion, and modernization are shifting companies toward automation and digitalization — a trend that has been accelerated during the pandemic.
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Renewable energy: Stakeholder interest in renewable energy is incentivizing utilities to invest in renewable energy infrastructure and storage to mitigate the utilities’ potential environmental impact. This has increased demand for a more technical and highly skilled workforce capable of upgrading, replacing, repairing and maintaining renewables infrastructure.
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Stakeholder role in the power mix: Historically, technological advancements and policy changes have driven power mix shifts, but today, corporations, residential and business communities have growing influence.
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Energy efficiency: Government-regulated price structures and utilities infrastructure requirements have increased demand for energy efficiency and resulted in cost savings.
How we help
L.E.K. Consulting uses its extensive expertise and proven methodologies to help clients across the power and utilities sector address critical business issues. Our experienced team has a deep grasp of the myriad challenges faced by companies in this sector. We provide unique analysis and insight to help them grow and invest successfully, focusing on M&A support services, growth strategy development, post-merger integration, organization strategy, performance improvement and market evaluation.
We are often engaged by companies and investors to:
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Assess where and how capital and investment resources should be deployed in the context of energy transition dynamics
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Improve operational performance through developing and implementing sustainable cost-reduction plans, optimizing supply chain operations, benchmarking, and more
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Analyze the power generation, T&D and utilities infrastructure markets and their competitive landscapes
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Support asset portfolio management and efficient resource allocation
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Provide M&A support, including deal thesis development, commercial due diligence, synergy assessment and post-merger integration
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Develop environmental, social and governance (ESG) and decarbonization strategies
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Support commercialization of new technologies through customer value proposition development and assessment of the market opportunity
