Delivering the power build out

By Pedro Caruso, Christopher Millican, Mark Uffhausen and Mike Granowski

The U.S. power industry is set to spend more on capital projects over the coming decade than its current market capitalization. Even small deviations in project performance will materially affect company valuations. As a result, the ability to deliver a large and diverse capital portfolio has become a core competitive imperative for power companies.

As discussed in our article The golden age of the utility, the United States is entering a period of rapid power demand growth after decades of stagnation. This creates a historic opportunity for power companies, but capturing it will require substantial investment. According to a variety of sources including the U.S. Energy Information Administration (EIA), Edison Electric Institute (EEI), Regulatory Research Associates (RRA), and Roland Berger analysis, companies are expected to deploy more than $1.5 trillion over the next decade into extending existing infrastructure lifespan and building new generation, transmission, and distribution capacity, an increase of at least 50% in spend compared to the prior decade.

While the scale of capital deployment alone is challenging, the nature of investment is also shifting. Over the past decade, most greenfield capital has been directed toward renewable energy sources. Going forward, however, investments in new capacity will increasingly focus on large-scale generation plants, particularly natural gas combined-cycle, as well as reliability-related upgrades, including batteries.

At the same time, the acceleration in power demand is global, creating supply chain and workforce constraints that go beyond the U.S.. Access to critical equipment, engineering talent, and permitting capacity will be constrained, all while companies face heightened expectations for reliability and affordability.

The challenge

Scaling capital expenditures to this magnitude introduces significant risks across cost, schedule, and safety dimensions. Companies that rise to the challenge will materially outperform their peers, while those that struggle will likely experience familiar pitfalls: under-delivery of planned capital, projects that fail to meet intended outcomes, schedule delays, cost overruns, lost revenue opportunities, and increased friction with stakeholders and regulators.

When addressing such complexity, it is helpful to return to first principles. From cross-industry experience, several core truths consistently emerge. First, not all projects are equal: building a nuclear plant differs fundamentally from constructing a transmission line or executing a transformer replacement program, just as greenfield projects differ from brownfield portfolios. Second, value creation shifts across the project lifecycle, with early stages emphasizing technology selection and planning, and later stages focusing on execution excellence.

Additionally, capital projects are inherently multidisciplinary, requiring tight coordination across engineering, supply chain, finance, scheduling, and construction. They also cannot be delivered in isolation – success depends on collaboration with suppliers, regulators, and communities. Finally, repetition and standardization matter; consistent frameworks, tools, and processes significantly improve outcomes.

A new principle now joins these: artificial intelligence and related technologies will reshape how capital projects are delivered. While they present meaningful opportunities for efficiency and effectiveness, they also introduce new risks, including overreliance on automated outputs and the potential for flawed insights.

Siezing the moment

Project delivery capabilities already exist across the power industry, though performance varies widely. Simply matching current best-in-class practices is unlikely to be sufficient given the scale and urgency of the challenge. Fortunately, other industries have faced similar expansions in capital delivery and offer valuable lessons.

Successful organizations begin by developing a clear understanding of the portfolio they intend to deliver and the level of risk they are willing to accept. They then design a project delivery system tailored to that portfolio.

Project portfolio characterization

Establishing clarity on the project portfolio requires answering several foundational questions. Companies must define the types of projects they will pursue, including technologies, sizes, locations, timelines, and levels of certainty. They must also articulate their risk posture across safety, financial, reputational, and environmental dimensions. Equally important is an understanding of current capabilities relative to future needs, including the role of outsourcing, as well as the strength of stakeholder relationships and the complexity of regulatory environments across the portfolio.

Project delivery systems

Designing an effective project delivery system is multidimensional. Organizations must determine which teams will deliver which projects (whether plant maintenance teams, dedicated project teams, or centralized groups) and how those teams should be structured. For example, central teams may be organized by technology or geography, and companies must decide whether to create dedicated teams for early project stages.

They must also identify which capabilities should be shared across projects, such as engineering or project controls, and determine the appropriate level of partnership with EPC or EPCM contractors. Geographic footprint decisions and governance structures further influence effectiveness. Critically, organizations should codify a clear project delivery system architecture, establishing a common language, defining project stages, and clarifying roles and responsibilities across stakeholders.

This system must be adaptable, with rigor tailored to project type. Small, repeatable projects should not be burdened with excessive early-stage requirements, while large, complex projects demand structured discipline. Distinguishing between programs and standalone projects, and aligning delivery approaches with internal maturity, are equally important.

At the center of the system is the capital project common process (CPCP). More than a standardized workflow, a well-designed CPCP defines deliverable quality expectations, links to technical standards, and provides guidance on organizing project teams and managing contractor interfaces. It should also account for variations across project types.

Getting started

There is not a single way to start the journey of scaling and improving project delivery capabilities, but there are some best practices that are worth taking into account. In particular, any journey should include an early assessment of the existing capabilities, as well as a deep understanding of the likely project portfolio.

We at Roland Berger have the tools, expertise and passion required to accelerate, derisk and enhance your journey. From help on a particularly important project, to support designing and implementing a full project delivery system, we’re ready to partner with you in capturing the opportunities presented by this new era of power investment.