Early teamwork ignites energy innovation
Rick Gray, Sector Lead - Energy, provides an insight into his thoughts on reading ISG's latest Wide Angle report, 'Rethinking the skills conundrum'.
The urgency is undeniable. The clock ticks down on climate change, while our energy systems struggle to keep pace with growing demand. Energy system aspirations that are easy to vocalise – are much harder to bring onstream – often trapped in a labyrinth of bureaucracy and financial uncertainty. But there is a way through this potential energy quagmire, and far from a radical solution – it’s based around more effective and earlier stage collaboration across the entire stakeholder landscape.
Let’s first address the financial element. Today there are a wealth of projects stuck in pre-investment limbo and it’s undeniable that continued political and economic uncertainties are a destabilising force on planned projects. Despite initial optimism, only a relatively small percentage of projects are fully funded and passing through ‘Final Investment Decision’ (FID). Figures shared by the Energy Supply Chain Trade Association showed some worrying global trends, with 34% of Nuclear New Build reaching FID and only 3% of carbon capture, 5% of hydrogen and 2% of floating offshore moving to delivery.
So how do we work together as an industry to bring certainty to investment decisions? I believe coming together earlier in the programme lifecycle, to implement collaborative forms of engagement and working together to develop the skills and capabilities required to deliver could be transformative.
Early engagement and collaboration
It is understandable that organisations often consider and call upon contractors primarily as delivery engines to engage once a project has been defined. However, this could lead to a broad range of capabilities being underutilised, that could play a crucial role in supporting the development of business cases – from scheduling, 5D modelling, early design integration and industrialisation. In the contractor space, we are experts at deliverable programmes and cost planning – leveraging the vast experience and expertise of our supply chain partners to de-risk and validate the journey towards the coveted FID. By having the opportunity to feed into the planning of schemes earlier in the process, we can then take the opportunity to de-risk them for our clients, bringing even greater confidence in programmes that are rooted in certainty.
To support this level of collaboration it’s important that as industry we look at more collaborative forms of engagement. In recent discussion with the World Commerce and Contracting Association (World CC) it was clear that across the industry when we set contracts up, it feels we do so “for divorce rather than marriage”. Industry standard contract types are often extremely hard to understand, written in a language almost exclusively for specialists in that form. We consider what will happen if we fail and what the remedies are. But what if we were to focus less attention on the pre-requisites of the relationship or dividing accountability, and refocus our energies on how we collaboratively face up to risks and problem-solve. These traditional and somewhat adversarial forms of contract need to evolve in to ‘relationship-based contracting’ for us to tackle the most challenging projects and programmes that are so important to helping us progress against our shared goals.
"We have to change the way we work together from a procurement perspective. We need to unleash the real value from our collaborations, and this means allowing innovation and creativity to thrive. Early contractor engagement unlocks so many more opportunities for delivery excellence, but so too does the right procurement environment."
We are beginning to see more outstanding examples of procurement pathways that are turning historical practices on their heads, actively encouraging information sharing, collaboration and secondment between organisations. Turning competition to collaboration has had a remarkable success for many organisations bold enough to embrace a new way of working, and I believe this approach has the potential to profoundly change our industry’s ability to tangibly deliver on those energy aspirations.
Developing capability
Interestingly, there is growing evidence that running a close second to financial considerations, a core factor impacting the UK’s ability to attract and secure energy investment commitments is workforce readiness. Our recent research paper ‘Rethinking the skills conundrum’ highlighted how important a skilled workforce is becoming as a critical pull factor for global organisations. We believe we have a simple and elegant solution to our future workforce planning conundrum using existing planning data as the catalyst for a skills revolution, but we heard directly from major players in the green energy market that skills confidence is now a core influencer for energy companies and their wider supply chain.
The development of sustainable energy demands specialised talent – a resource currently in short supply. How can we play our part in this challenge? How about co-creating the future workforce. By forging partnerships with educational institutions, co-founding learning academies, and nurturing apprenticeships – a collaborative upskilling revolution fuelled by the visibility of project pipelines and local opportunities. We’ve already started to see the evidence of how collaborative partnerships afford the ability to invest in developing capabilities, by creating more apprenticeships that nurture a talent pipeline that can meet the increasing demands of modern infrastructure. To create the certainty and stability to maximise our commitments and create the legacy we all aspire to, it all has to hang together, the form of engagement, the way we work together and the focus on building the skills we need to set us up for success.
