We help electric power generators enhance revenue, reduce costs, and transform fleet performance.
As lower gas prices, constrained demand, tighter environmental controls, and shifts to renewable energy combine to exert pressure on generators’ margins, operational excellence is at a premium. Capturing performance improvements will remain a priority, as conventional generation continues to play a major role in global energy supply: by 2035, the projected increase is to 3,700 gigawatts (GWs), 75 percent of it outside OECD countries.
What we do
We work with many of the world’s largest power-generation fleets to secure lasting improvements in frontline operations. We help our clients develop capabilities to build a strong foundation for performance excellence. We provide access to an unparalleled global network of specialists who have deep expertise and hands-on experience in the power industry, lean operations, and energy efficiency.
Frontline plant operations
Our distinctive field-tested process, supported by learning modules, IT packages, and lean techniques, helps clients identify improvement opportunities, generate and evaluate ideas, set priorities, and track results. We tailor each program to the relevant generation technology—fossil, hydro, or nuclear—targeting heat rates, individual productivity, and outage times.
Portfolio and operational risk management
By following our systematic approach to evaluating risks and returns, clients can make better decisions on sourcing mix, the wholesale/retail balance, long-term versus short-term sales, and hedging programs. We help clients align commercial and operating incentives to capture opportunities and drive sustained impact.
Our pragmatic emphasis on value creation enables clients to capture operational gains quickly, adjust performance in real time, and track progress effectively. To ensure that transformation delivers continuous improvement, we focus on long-term shifts in mind-sets and behaviors as well as short-term performance gains.
Examples of our work
In the past 5 years, we have completed more than 500 projects for regulated and merchant generators globally, including efforts such as these:
- helping a power generator develop an energy-efficiency program achieving a heat rate increase of 5 percent in a 3 gigawatt pilot plant that was subsequently rolled out to its entire 30 gigawatt fleet
- supporting a client with an operational transformation in its coal and nuclear plants that achieved a $90 million increase in gross margin and a $130 million lift in annual earnings before interest and taxes
- working with a merchant generator to increase its margin by $60 million per year through dispatch optimization and systemized trading and bidding
We commit extensive resources to developing cutting-edge knowledge, analysis, and tools to bring to our clients, such as the following:
- McKinsey Power Gauge. A global benchmarking tool that uses data from 600 coal- and gas-fired power stations (steam and combined cycle gas turbine) to develop insights into operational best practices and improvements.
- Plant performance tools. A 48-hour plant diagnostic that uses case examples, frontline observation, and expert interviews to form an evidence-based view of improvement opportunities; an energy-efficiency framework that compares actual performance with theoretical limits, enabling generators to increase heat rate and save 10 to 20 percent of energy costs; and a database of more than 12,000 proven ideas for optimizing plant performance, coupled with a suite of analytic tools for diagnosing reliability and capturing improvement opportunities.
- Commercial optimization tool kit. A proprietary dispatch-optimization model that helps generators maximize revenue in varying wholesale market conditions.