Energy Transition: Mission Impossible?
Energy Transition / Net Zero 2050
The primary theme throughout the Advanced Work Packaging (AWP) annual European conference held in London this year on 5/6 April was, unsurprisingly, Energy Transition / Net Zero 2050. These represent an unprecedented reallocation of capital: USD 9.2 trillion per annum for the next 28 years (McKinsey, Charting new approaches to capital projects delivery, February 2022).
According to McKinsey, the global project delivery system;
- has a critical role to play in delivering the massive number of engineering construction projects required to meet the Net Zero objectives, and
- its challenge is to deliver large and complex projects rapidly, cost-effectively and with a low carbon footprint, but it
- has a legacy of failed projects: 3 out of 4 mega projects (>USD 1 bn.) are late and over budget, and many do not start up as planned or meet safety levels mandated by the industry.
A unique opportunity
Energy Transition / Net Zero 2050 project portfolio represents a unique opportunity for the industry to change fundamentally the way in which projects are conceived and delivered in order to reduce delivery times, eliminate waste, lower risk, reduce costs and increase value. Capital reallocation of USD 9.2 trillion per annum over 28 years represents a pipeline of continuous work that provides the opportunity for industry to implement the transformational change that has been needed but has not been pursued for the last 20 years or more. Other industries (aerospace, shipbuilding, automotive etc) made transformational changes many years ago. So why not engineering construction?
The consensus of opinion at the AWP conference from a broad representation of industry (owners, contractors, supply chain) was that unless engineering construction replaces the ‘traditional’ contracting methodologies that have seen so many failed projects, with collaborative working and contracting models, the industry will be unable to meet the Energy Transition / Net Zero 2050 objectives.
Join us
The Collaborative Contracting Community of Practice free webinar Implementing Project Collaboration for Net Zero on 28 September 2022 will consider what is needed to implement projects based on collaborative working and contracting models. Interested to learn more?
To reserve a place on this free webinar, email us at events@kingsfieldacademy.com
The event will be hosted by the Collaborative Contracting Community of Practice, supported by Kingsfield Academy.
John Fotherby – Partner – Kingsfield Academy / Chair – European Construction Institute