Helping you make the right moves

Helping you makethe right moves

www.pwc.com/utilities

Global power & utilities statement of capabilities

Energy is transforming. Globalmegatrends such as technologicalbreakthroughs, climate change,urbanisation and economic shiftsare creating new opportunitiesand challenges. In the power sectorwe’re seeing rapid change withpolicy, technological and otherchanges heralding an era of newenergy sources, distributedgeneration, smart grids, digitaltransformation and moreempowered customers. And PwC’sservices are changing to ensure the right services are on hand tomeet your needs in this world ofenergy transformation.

Introduction

2 Global power & utilities statement of capabilities

Innovation to keep you ahead

The changes that are taking place in the power sector are of great potentialsignificance. So we’ve developed a new energy transformation toolkit to support your future strategies and map out the risksand opportunities ahead. We’ve added new workstreams covering market design,distributed generation, supply chainmanagement and customer transformation,alongside the range of our existingworkstreams, to give extra focus to ourservices. And last but not least, PwC’scombination with Booz & Co to createStrategy& gives us a bigger, broader, andbetter opportunity to help you connect strategy to execution.

These changes are a demonstration of ourcontinual innovation to help you be reallysuccessful in a challenging marketplace.Making the right moves has always beenimportant. But in this world of energytransformation it’s more important than ever.

Through our extensive global network, we are able to help with the big issues facing the sector. With more than 4,000 sectorspecialists and offices in 157 countries, wework with power and utilities companies injust about every location in which they dobusiness. Our power and utilities centre ofexcellence is a way of delivering that expertiseto you. It’s not a physical centre. It’s muchmore powerful than that. It’s a channel for accessing the knowledge of all our subjectexperts around the globe.

The world of energy is changing...

...and we’rechanging too

Global power & utilities statement of capabilities 3

We’re constantly innovating to make sure wehave the right products, services and skills tofit with your changing needs. This statementof our capabilities for the power & utilitiessector outlines how we can help you be reallysuccessful in an era of energy transformation.

A relationship that you can trust

Teaming up with PwC gives you a professionalpartner that can help you move rapidly, andwith assurance and rigour, to deliver what you need. When you call on us, our depth andbreadth mean we’re in a good position todeploy the right expertise to respond to yourissues. You can depend on us as a trustedpartner.

This statement of our capabilities is designedto show how we can help you. Whether it’s the challenge of energy transformation, orwhether your company needs help on othermatters such as controlling costs, improvingyour asset management and processes,developing a global tax strategy, preparingstrategy for entering new markets, we canhelp.

Speak to us now. We live and breathe this sector.

Introduction 2

The power and utility world of the future 4– your trusted transformation partner

PwC – focused on you 6

Working together – on your issues 8

Customer transformation 8

Market design 10

Supply chain management 12

Smart energy and distributed generation 14

Renewable and cleaner energy 16

Nuclear energy 18

Deals and energy financing 20

Capital projects and infrastructure 22

Enterprise asset management 24

Financial reporting 26

Commodity trading and risk management 28

PwC – on hand wherever you need us worldwide 30

Contacts 31

Contents

Norbert SchwietersGlobal Power & Utilities Leader

Energy transformation is a number one issue for theindustry. It goes right to the heart of many of our clients’concerns. When we spoke to senior leaders from power &utilities companies around the world recently, 94% saidenergy transformation will lead to complete transformationor important changes to the power utility business model.1

In response, we’ve launched a specially-designed EnergyTransformation initiative to help companies ensure thatthey use the momentum and translate it into success.

Our Energy TransformationFramework

Making the right moves now will be vital if companies are to be a successful part of energy transformation. PwC’s andStrategy&’s Energy TransformationFramework lies at the heart of our work on this topic. The framework helpscompanies, or indeed regulators and otherstakeholders, to map the effect on them all the way from the root causes through to impacts on future market designs andbusiness models.

The changes affecting the power utilitiessector have provoked some apocalypticphrases from headline writers. We’re muchmore optimistic. True, if companies don’tstay ahead of change, the dangers theyface will intensify. But if they make theright moves to address the challenges they face and embrace the opportunities,they can be a successful part of energytransformation.

Our Energy Transformation Frameworkhelps companies plan ahead. The fourlayers address four key questions:• How are megatrends affecting the

energy sector?• What are the disruption effects on the

power sector?• What could this mean for future market

models?• What business models are likely to

evolve and how can my company or market best transform?

The framework helps companies drilldown from the megatrends affecting thesector to consider the specific effect onthem, including potential disruptiveimpacts. These can flow from a number ofsources – customer behaviour, competitoractions, the way production and channelsto market work, and the impact ofgovernment policy.

Blueprint your future

Companies need to determine the futuredirection of their own markets and whatthis means for their business models.Markets and business models are changingand are undoubtedly set to change further.We believe companies can’t afford to waitas the next decade is crucial.

Within the next decade we anticipate thatstep-change milestones will be reached in at least some of the key disruptivetechnologies, such as the grid parity ofsolar distributed generation, lower costand mass-scale storage solutions, andattractive electric vehicle options.

By using our energy transformationframework to work all these issuesthrough, we can help you ‘blueprint thefuture’.

We hope you’ll take an in-depth look at the energy transformation framework.

Pick up the phone or email us to discusshow you are affected by thesedevelopments and how you can respond.

The power and utility world of the future– your trusted transformation partner

Energy Transformation GlobalExpert Panel


1 A different energy future: where energy transformation is leading us, 14th PwC Global Power & Utilities Survey, 2015.

PwC has established a panel of expert professionals, each ofwhom has experience of the transformative challenges facing the industry. The panel works closely together to share the latestknowledge and insights on the energy transformation topicgained from working with our clients around the world. This insight ensures that we are able to bring the full weight ofPwC’s network experience to bear on our energy transformationclient engagements. The creation of this panel as an establishedcommunity is unique and allows PwC to provide greater levels of insight to our clients around the world.

A digital future

The promise of digital transformation ishuge. From grid management to customerrelations, an effective digital strategy canrevolutionise all areas of the power utilitybusiness. It’s at the heart of the energytransformation challenge.

Digital transformation is top of companyagendas. Digital is affecting not just theway companies face their customers orhow that relationship is disintermediatedbut is also bringing deep changes in the

core operational activities of utilities. But successful capture of the benefits ofdigitisation is a tough call for manycompanies and power & utilities is a sector that is a little way off the pace.

PwC can help you address the hardquestions that power utility companiesneed to ask about their digital strategies.What are the key strategic issues? Whichareas are best prioritised? How to addressnew business model opportunities? Whatare the critical choices along the way? And what lessons are being learnt?

We’re helping companies around the worldto address these questions and implementeffective digital strategies. Whether yourambition is to be an ‘industry leader’ or a‘smart follower’, we have a range of digitaltransformation services, ranging from thevery important investment case, businessmodel and people aspects to the technicaland software side of projects.

We can help you make sure that yourdigital vision really fits your businessmodel, your customers, the nature ofthe solutions you’re delivering, your

infrastructure and your regulatory model. We can advise on the best way ofinvesting in digital and the balancebetween in-house and out-house strategiesor venture capital investment. We can also help you make sure you are ‘digitalready’ by addressing existing process andsystem issues that might stand in the wayof building an effective foundation tosupport your digital strategies. And we canhelp you with the crucial organisationalchange and internal culture aspects ofdigitisation.


Demographic changes

How are megatrendsaffecting the

energy sector?

What are the disruption factors

affecting the power sector?

What could thismean for future market models?

What business models are likely to evolve?

What transformations are necessary?

Customer behaviour Competition

Production service model

Green command and control

Ultra-distributedgeneration

Local energy systems

Regionalsupergrid

Distributionchannels

Government andregulation

Shift in economic power

Acceleratingurbanisation

Climate change and resource scarcity

Technological breakthroughs

PurposeBusiness

modelOperating model/

capabilities HR modelFinancial

performance

Disruption dynamics

Power & utility company transformation

The PwC Energy Transformation Framework

PwC named a leader in Worldwide Digital Transformation Consulting

PwC has been named as a leader in the IDC MarketScape:Worldwide Digital Transformation Consulting and SystemsIntegration Services 2015 Vendor Assessment. The IDCMarketScape research assesses the capabilities and businessstrategy of consulting firms with global scale, positioningthem according to IDC MarketScape analysis and buyerperceptions.

All the power and utilities expertise of PwC is broughttogether with one focus – you, the client. Our priority is on the issues that matter to you. PwC’s Global Power & Utilities Group provides professional services tocompanies and industry players of all sizes, across allsegments of the industry. We provide industry-specificsolutions in the fields of audit and assurance,transactions and tax. And with the addition of Strategy&,we’re able to offer a much wider range of advisoryservices to meet your more specific needs.

Three out of every ten leading companiesin the sector choose us as an audit partner.PwC is on hand when governments andregulatory bodies need top-level advice onreform of market structures or hands-ondelivery of the resulting changeprogrammes.

PwC is a member of the World NuclearAssociation and of Eurelectric. PwC andthe World Economic Forum have beenstrategic partners since the mid-1980s.PwC is a knowledge provider for theAnnual Meeting in Davos-Klosters,Switzerland, and regional summitsconducted by the World Economic Forumevery year. In many of the individualcountries in which we operate, we aremembers of leading industry associations.For example, in the US we are an activemember of the Edison Electric Institute,providing speakers for some of their majorevents and expertise as instructors for alarge number of the institute’s membertraining courses. We have similarinvolvement in industry associations incountries ranging from Brazil to Japan,from China to Chile.

PwC – focused on you

At a glance – why PwC ?

PwC’s global power & utilitiescentre of excellence


is a channel for accessing the knowledge of all our subjectexperts around the globe relevant to your needs. It deliverspoints of view and thought leadership on the future of thesector and provides a platform for debate between industrystakeholders. Most importantly, it gives you maximum valuefrom our strong team of 4,000 power and utilities specialistsaround the world. Find out more at www.pwc.com/utilities

• We live and breathe the sector, understanding your issues and able to respond to your priorities.

• We have over 4,000 staff worldwide dedicated to the power & utilities sector.

• Our global coverage means we are on hand wherever you need us.

• With the addition of Strategy& we can offer strategy through execution services to our clients.

• We deliver to a single PwC global quality standard, giving you the assurance of local market insight matched with worldwide professionalism and rigour.

• We listen to you and continuously build your feedback into our work.

• Our audit projects are reviewed by a PwC partner who is not part of the project team, building independence into your feedback and appraisal of us.

• We give you the best talent from around the world. We are recognised as a number one employer of choice in many key locations.

Working together – our starting points

Audit and assurancePwC audits major utility companies in key energy markets – gas, electricity,water, renewables and other services.Power & utilities companies want auditteams that know their issues andunderstand their business challenges. Our industry-dedicated professionalsreceive specialised training, includingregular updates on utility-specific issues.We have the knowledge and experiencenecessary to help you with complexfinancial accounting issues related tomatters such as valuations, pensions andshare plans, listings, InternationalFinancial Reporting Standards (IFRS)conversions, and corporate treasury andcompany secretarial functions.

Advisory servicesWhether you are pursuing newopportunities, responding to events orcoping with the daily pressures of growth,we are there to help. We do this bycreating unique, value-added solutionsbased on the combination of industryknowledge, subject matter expertise andour collective experience and expertisefrom all areas of PwC.

PwC and Strategy&

ConsultingOur specialist consulting teams work withyours to innovate and grow, improveoperations, manage risk and regulation,and leverage talent. We’re strong on lots of things – including technology, people,process, data, governance and strategy.But our big strength is bringing them alltogether – making sure every project youundertake is connected to making yourbusiness stronger overall.

Tax servicesWe have the largest network of taxspecialists in the world, with over 30,000dedicated tax specialists in 150 countries.This means that we can support you bothlocally and globally, wherever you requiretax advice. Our tax professionals solvechallenging issues, anticipate changes thatcan affect your tax situation and financialstatements, and keep you apprised of local, state, foreign and international tax regulations as they relate to yourcompany’s operations. We can help youconstruct effective cross-border strategiesand manage your global structural tax rateand advise on the best tax strategy for arange of situations such as mergers andacquisitions, joint ventures and other new projects.

Human resourcesWith more than 6,000 professionals in over 150 countries, the PwC network has one of the world’s largest humanresource (HR) advisory organisations. Our multidisciplinary approach allows us to advise on all aspects of peoplemanagement, helping our clients to createvalue and deliver competitive advantagefor their businesses through people.


Representative audit and other assurance clients Agl Resources Inc. Ameren Corporation ATCO Ltd A2A SpA Calpine Corporation Centrica plc China Huaneng Group CLP Holdings Limited CMS Energy Corporation DTE Energy Corporation Edison International E.ON SE Exelon Corporation FirstEnergy Corp. Gas Natural SDG SA National Grid Plc Pepco Holdings, Inc. Puget Energy, Inc. RusHydro RWE AG The Hong Kong and China Gas Company

Limited UGI Corporation

Representative advisory and tax clientsAbu Dhabi Water & Electricity Authority Commissariat à l'énergie atomiqueÉlectricité de France Electricity Supply BoardEnel SpA Eskom Holdings Ltd Fortum Oyj Engie National Water Company PG&E Corporation Power And Water Utility Company For

Jubail And Yanbu Saudi Electricity Co Severn Trent Plc The AES Corporation The Southern Company The Tata Power Company Limited United Utilities Group Plc Vattenfall AB Veolia Environnement Xcel Energy Inc

PwC’s addition of Strategy& (formerly Booz & Co) to its network gives aconsiderable boost to our ability to deliver for clients. Strategy& brings a100-year heritage of practical strategy advice to PwC’s broad and deepportfolio of expert advisory services.

Together PwC and Strategy& are in a stronger position to deliver superiorvalue to our clients and stakeholders, attract premium talent and helpbusinesses around the world build their capabilities on a global scale.Strategy& has extensive energy sector experience, serving:

• over 10,000 clients in 75 countries – 400 of the Fortune 500 companies

• 40 leading regionals in Australia, Canada, China, eastern Europe, Europe, and the US

• 25 of 30 utilities in the United States and four out of the top five utilities in Europe

• and being involved in over 80% of all the mergers in North America.


How PwC can help

Developing the right customerstrategyChange is happening and utilities have tomake a clear statement about how they aregoing to be part of it or, even better, getahead of it. Understanding the customerbase, meeting their expectations in thisnew environment and tailoring themessage to individual customers arepriorities that can deliver enhanced valuefor customers and utilities.

Getting ahead of customer needsWe can help address the big importantquestions. How are you going to deal withthis ever-changing market? How can youoptimise business processes to capturethese opportunities? How can you be greatat managing customer data and being right at the forefront of customer needs?Can there be an environment that is low-cost and with high customersatisfaction? All of this is changing with a more engaged and digitally savvyconsumer and the traditional products,services, and channels of a traditionalutility have to change with it.

Thinking smart about smarttechnologyTwo-way communication lies at the heartof smart grid technology. Its effectiveness,though, relies on such communicationtranslating into behaviour change. Evenwith smart grid technology in place,customers have to be won over and thereare many trust issues and other barriers to overcome along the way. Customers’smart experiences have to be motivatingexperiences for smart grid investments todeliver the best returns.

Having the IT strategy to match yourcustomer strategyWhether it is mobile connectivity, web-based tools or better use of data,companies need to have strong ITfoundations in place. Whether you arestruggling with outdated systems or need a push to get the best out of newinvestments, PwC can help give youmomentum.

Customer transformationAside from billing matters and service calls, customershistorically have had little interaction with their utilityproviders. Today, that model is rapidly changing.

New technology and the evolution of thesmart grid mean that customers willcontinue to have more reasons tocommunicate with their utility providers.At the same time, deregulation has armedcustomers with the power of choice – sokeeping them satisfied is critical to keepingthem engaged and loyal.

Other industries have raised the bar forwhat customers expect from serviceproviders. As a result, regulated utilitiesare playing catch-up while they developservices aimed at tech-savvy customerswho have grown accustomed to calling theshots – and having companies respond.Tomorrow’s utility will likely need aflexible organisational structure andsupporting capabilities to harness thepower behind an unprecedented amount of data. Companies can use this data toinform new product and servicedevelopment, anticipate market needs,increase customer satisfaction, and boostrevenue. The result should be a new, morecollaborative type of customer relationship– one that puts the customer at the centre of a utility’s business strategy.

While modernising the grid will likelycreate new value for customers andutilities, the need for utilities to reshapethemselves around the customer will likelygrow. In other words, a utility shouldtransform or risk becoming a relic from a bygone era.

Working together – on your issues

Yvonne BrzesowskyGlobal subject matter expert:Customer transformation

Experience James Curtin has over 25 years’consulting experience and leads PwC’s Powerand Utilities Customer practice, focusing ontransforming utility companies’ businessstrategies, business operations and technologyplatforms to better align with changing customerdemands.

Main clients served Exelon, Alliant Energy, Detroit Edison, and Southern Companies.

His view on the single biggest customer transformation challenge lying ahead for thesector “Utility companies keeping up withrapidly changing customer needs, driven by new technology and a connected consumer,while still focusing on delivering safe, reliableand cost-effective services.”

Favourite leisure pursuits Rebuilding late 60s and early 70s US muscle cars

Contact [email protected] or phone +1 713 356 5188

James CurtinGlobal subject matter expert:Customer transformation

Experience Yvonne is a partner in theConsulting practice of PwC Netherlands. Her career has been built in the internationaltelecoms, energy, utilities and chemicals sectorsin Europe and Asia. She has gained experiencesupporting clients with complex transformationprojects, specifically at the commercial, client-facing and operational parts of the organisation.

Main clients served Dutch banks, international telecommunications carriers,Japanese multinational companies in Europe,utility & grid companies.

Her view on the single biggest customer transformation challenge lying ahead for thesector “Making the customer experienceseamless and extremely relevant.”

Favourite leisure pursuits Playing a round of golf with interesting people in scenery that is both wonderful and challenging.



Working together – PwC improvingefficiency, quality and performance atSouth Jersey Gas

OutcomeThe ‘go live’ went successfully, with the following results:• An automated EDI solution, minimising many previous

manual processes.• A CIS solution that provides a technical and functional

platform to meet existing and future operational objectives.• A solution that enables one-stop shopping at the client’s

call centre.• An asset management solution that decommissioned

multiple standalone databases and spreadsheets and automated previously manually-intensive business processes.

ContextThe client’s legacy CIS and AssetManagement “KUST” application wasoriginally implemented in 1973. It hadbeen heavily customised over the years to keep up with the user needs but hadbecome increasingly complex to use andmaintain in its present archaic platform.PwC was selected through a competitivebidding process as the systems integratorto implement Oracle CC&B 2.4.01, Oracle Business Intelligence (OBIEE),Oracle Analytics, Oracle MTM and Oracle CSS. Subsequently, we wereawarded the contract to complete the IBM Maximo implementation on theclient’s behalf.

What PwC didPwC led the implementation to migratethe client from its legacy application toCC&B by providing an experiencedimplementation team to deliver servicesaround project management, applicationconfiguration, business process re-engineering support, data conversion,development of customisations,integration, solution design, testing, and end-user training support utilisingPwC’s Transform Methodology.


How PwC can help

We have advised on power sector reformfor the past 25 years across the world. We can support you in:

Thinking through future marketdesigns Looking at the market trends anddevelopments that drive market structuresand regulatory frameworks in order tohelp you devise market frameworks thataddress the future challenges ofaffordability, sustainability and security of supply.

Anticipating and implementingmarket changes Determining preferred outcomes fromspecific change proposals, fromunbundling to support mechanisms. We can guide and support change projectsand capital programmes that may benecessary for compliance.

Managing competition issues Being mindful of market power issues and maintaining a level playing field.

Evaluating rates of return We can develop effective systems formeasuring and modelling revenues andcosts, assisting in regulatory dialogue and assessing the timing and capitalstructure of investments.

Benchmarking system performance International benchmarking andcomparison of best practice.

Compliance with regulatoryrequirements Whether it’s financial reporting, industryregulation, emissions or commoditymarket regulation, we can help you put in place the internal systems for audit and compliance.

Market designPower markets are facing a period of major change.Technological breakthroughs, climate change, demographics,rapid urbanisation are having fundamental impacts onpower market design.

The emergence of new market roles, newways of producing and delivering energyand new competitive dynamics presentsignificant challenges for companies andpolicymakers alike.

Unlike markets for many other productsand services, the role of governments issignificant given the importance of powerto everyday life and economic activity. So the exact market shape for individualcountries will depend on policy directionas well as on other local factors such as theextent of competition and customer choice,access to fuel, the nature of existinginfrastructure, the degree of electrificationand degrees of interconnectedness orisolation from neighbouring territories.

A crucial factor is the pace of globaltechnological change. Among the issues:• Greening of the grid – requiring new

approaches to managing volatility and system balancing.

• Localisation of energy – with the need to manage distributed generation, storage, micro-grids and local markets.

• A demand-side revolution – challenging companies to capture competitive advantage from customer demand-side initiatives.

• A fragmented future market – needing new regulatory definition.

• Smart and local grids – requiring an innovative approach to TSO regulation.

These developments pose a number ofquestions for companies and policy-makers. Is the market design providingappropriate incentives for investment? Is the balance right between regulator-ledand market-led innovation? What are theimplications for security of supply andaffordability? How can incumbents bestmeet the threat from new market entrants?Are there appropriate opportunities fornew entrants? What will be the impact ofmicrogrids and distributed generation ontraditional utility revenues?


Experience Over 20 years of experience ofadvising on restructuring, market change and itsimpact on utilities and market entrants in theglobal energy sector, including Europe, NorthAmerica, Asia and Africa.

Main clients served Centrica, RWE, Nalcor Energy, Energy Regulatory Commission ofThailand and TEPCO.

Her view on the single biggest market design challenge lying ahead for the sector“Developing business strategies to addressfuture energy market scenarios based onrenewables, digital technology and increasingcustomer participation.”

Favourite leisure pursuits Cycling in the summer, skiing in the winter.

Contact [email protected] or phone + 44 7711 771387

Karen DawsonGlobal subject matter expert:Market design

Experience Paul is a partner in PwC’s DutchStrategy Practice and is a global market designsubject matter expert. He specialises in energy& utilities, renewables, and economic & marketanalyses, and is the author of more than 20academic papers on energy economics.

Main clients served Attero, Gasunie, Dublin Council, Energie-Nederland, E.ON, andGasTerra.

His view on the single biggest market design challenge lying ahead for the sector“Navigating in an increasingly uncertain futurewith large capital outlays requires cooperationand vision.”

Favourite leisure pursuits Reading and spending time with my family.

Contact [email protected] or phone +31 88 792 72 37

Paul NillesenGlobal subject matter expert:Market design


Working together – PwC and powersector reform in Tanzania

OutcomeThe ‘go live’ went successfully, with the followingresults:• Successful presentation of the strategy by the

client to government.• Cabinet approval was secured for the power

sector reform strategy.• The Ministry of Energy and Minerals is in the

process of implementing the proposed strategy.

ContextThe Ministry of Energy and Minerals waslooking for a consultant to assist with therestructuring the power sector through the design of a sector framework thatwould better support economic growth.The country’s power sector faced a number of challenges: the verticallyintegrated utility TANESCO wasfinancially distressed, electricity costswere high due to emergency powerprocurement, the country had a lowelectrification rate and lacked finance for power system expansion.

What PwC did• Assessed the current power sector setup

and regulatory framework.• Reviewed sector reform strategies from

power markets across the globe and highlighted lessons learnt.

• Identified strategic options and actions, with associated information, including risks and risk mitigation options.

• Prioritised strategic options, based on timelines, funding limitations, and performance requirements from key stakeholders and the Ministry of Energy and Minerals.

• Developed an implementation roadmap which includes the high-level scheduling of implementation activities and milestones.


How PwC can help

Business engagement Do utility business units value the supplychain teams? Is supply chain managementbeing defined too narrowly, limiting itspotential to contribute to strategicchallenges? Certainly, reducing costs andincreasing efficiency should always be part of supply chain management’s role. But to be relevant today, the supply chainorganisation must effectively take on newstrategic roles in cost containment, supplyassurance, and risk management.

Operations management Is the cost of supply understood? Is thesupply chain operating model in sync with the business requirements? Are youworking with suppliers to understand their cost structures? By understandingcontractors’ cost structure, utilities cangain a better sense for where there mightbe opportunities to help the contractorsreduce costs to the utility without lowering their margins.

Risk and responsivenessIs the supply chain effectively respondingto changing customer needs or externalevents? And are you learning from crisisevents such as storms? Are the responsesto risks and regulations appropriate?Supply chain management teams need tohave an integrated view of future demandfor the major categories of materials andservices spending and combine this with adeep understanding of the supply marketsoutlook – both regionally and, more andmore, globally – so that they are wellplaced to deliver when they need to.

Capital performance Are large capital projects meeting theirobjectives? Most utilities’ skills andcapacity to manage these projectsthemselves have eroded over the years,owing to earlier gaps in the flow of largeprojects and the aging demographics of the workforce. We can help you strengthenthe capabilities you need in order to besuccessful in managing projects.

Technology Are information technology investmentsunderperforming due to unresolvedbusiness issues? Are your IT procurementsmodels still stuck in a world of multi-yearhorizons when today’s digital platformsare evolving by the month? And are youconfident that your IT choices are robustenough to keep pace with changing powertechnology requirements? We can help you address underperformance intechnological investment as well asaddress the risks associated withtechnological evolution.

Supply chain operating model We can help you ensure your supply chain operating model is fit for purpose. Is it being driven by clear and appropriateobjectives in line with your company’schanging strategic and operationalcontext? And is it being supported by arigorous approach to performancemanagement, with metrics that evaluatehow successfully the processes,organisation, and technology aresupporting the supply chain function’sagenda?

Supply chain managementA powerful set of global trends is affecting how utilitiesacross the world structure their business models. This has a major impact on the traditional supply chain.

Most important of all, energytransformation is putting pressure onsupply chains as new energy sources comeonline, smart grids evolve and distributedgeneration technology combines withthese other developments to create newsupply chain demands.

The sheer volume of tactical work –requests for proposals, purchase ordersand contracts – generated by this newactivity is stretching supply chainorganisations’ resources. Utilities thatexcel in supply chain performance seebetter network reliability, robust capitalprogrammes and stronger financial results. Leading companies share distinctsupply chain characteristics that set them apart from their peers.

It is important for companies to align their supply chain strategies to the new evolving business models that are arisingfrom these technological changes. The supply chain has traditionally beenregarded as a necessary cost burden forutility businesses. That’s understandable,of course, as a reliable flow of materialsand services is key to achieving thecompany’s critical mission of ‘keeping the lights on’. Nonetheless, utilities haverealised that an effective supply chain has much to contribute to the overallperformance of the utility.


Experience Eric leads PwC’s US power andutilities supply chain practice. He has more than20 years of experience in operations strategy,supply chain management, and informationsystems in industries ranging from capitalequipment to consumer retail and electronics.For the last ten years, he has focused onhelping utilities rethink their supply chainstrategy and adopt leading practices andtechnologies.

Main clients served Pacific Gas & Electric, Duke Energy, Entergy, OGE Energy.

His view on the single biggest supply chain challenge lying ahead for the sector“Transitioning supply chain from a transactionalfunction to a strategic enterprise asset.”

Favourite leisure pursuits Reading, hiking and fly fishing.

Contact [email protected] phone +1 408 817 4435

Eric FinchGlobal subject matter expert:Supply chain management


Working together – PwC and supplychain improvement

OutcomeThe project delivered the following benefits that far exceededclient expectations:• A 28% increase in productivity across the teams through

visibility of performance, coaching and more efficient ways of working.

• An 85% decrease in backlogs by reviewing performance, sharing best practice and increased communication.

• An immediate US$240,000 in realised cost savings and US$175,000 in realised cost avoidance.

• An estimated US$624,000 of cost savings to follow through programme sustainment.

ContextA major North American pipelinecompany’s supply chain group waschallenged to meet internal customerexpectations following an organisation-wide SAP implementation. Theyencountered setbacks because of theabsence of standardised processes, clearroles and responsibilities and effectivecommunication with their internalcustomers. The result was servicebacklogs, maintenance and project delays,costly contractor services and poorcustomer satisfaction.

What PwC didPwC delivered substantial improvementsacross the supply chain using ourinnovative ‘Perform’ methodology coveringsix different groups to help the clientachieve value chain excellence.

The engagement focused on:• Building capability – we trained

managers to proactively lead their teams and increase daily managerial visibility within the teams.

• Increased capacity – we helped identify and reduce non value-adding activities and enhanced standardised routines and practices to improve productivity and increase capacity.

• Planning and control – we designed and implemented capacity management tools to balance workloads and resources and encourage a supportive team dynamic.

• Sustainability planning – we supported knowledge transfer and planned the next steps to facilitate the ongoing benefits realisation of the transformation project.

How PwC can help

Whatever the stage of your thinking androll-out of smart energy initiatives andwherever you are in the world, PwC canhelp give you momentum.

Full lifecycleOur approach considers the full lifecycle of smart energy initiatives and focuses ondriving the technology requirements froma complete review of future businessmodels.

Focus on regulatorsWe help regulators and utility companiesalike handle risk and ensure that thedesign of regulatory frameworks supportsthe development of smart energy and thenew business models.

Roll out of smart gridsWe are on hand to help with the businessand investment case and we havesignificant project expertise in the rolloutof smart grid programmes in all majorpower markets around the world.

Customer is keyWe can also help you plan carefully yourcustomer relations strategy. Without suchcareful planning, all the technologicalinnovation in the world can beundermined if customers don’t buy intothe opportunities that smart metering and smart grids bring.

Smart energy and distributedgenerationThe rollout of smart energy technologies by utilities isreshaping the way power companies and users manageand think about electricity. It is necessitating majorcapital programmes and is, in effect, re-engineering manyaspects of the way in which energy systems are controlled.New technologies and new ways of working are required.New players are entering into the industry and theindustry’s relationships with its customers is changing.

Smart energy is challenging utilities tothink outside the box and look for newsolutions. The stable nature of thetraditional utility business is becominga thing of the past.

But behind the hype, there is the reality.We’ve all heard about the immensepotential of smart energy but, if you arepart of delivering this future, you’ll know the transformation won’t be easy.Smart grids and smart metering needsubstantial capital investment. Theyrequire a complete overhaul of the gridfrom an electromechanical to a fully digital system.

If you are to get the full potential of smartenergy, you have to make a lot happen onmany different fronts. You need to judgethe timing of investment and the bestchoice of technology partners. You alsoneed to get the right balance between thecost-benefit to your company as well as the wider grid and society. On top of allthis, there is the big challenge of delivering the necessary upgradesefficiently and on time.



Experience Over 20 years of experience in the energy and utilities sector and specificexperience of smart metering and smart gridsgained in Europe, North America, Asia, Africaand the Caribbean.

Main clients served Ontario’s Independent Electricity System Operator, National Grid,Scottish and Southern Electricity.

His view on the single biggest smart grid challenge lying ahead for the sector“Getting used to a world where customers cantake control of their own electricity.”

Favourite leisure pursuits Walking in the high peaks of Britain and Ireland.

Contact [email protected] or phone + 44 753 205 8626

Steve MullinsGlobal subject matter expert:Smart energy and distributedGeneration


Working together – Pacific Gas & Electricand PwC

ContextPacific Gas and Electric (PG&E) hadalready deployed 3.5 million gas andelectric smart meters throughoutnorthern California as part of NorthAmerica’s largest smart meter rollout. As part of the next phase of the rolloutthey had to deliver 10.2 millionsmart meters in a $2.2bn, five-yearprogramme to 2012.

ApproachWe provided extensive consulting servicesto the project, including participation in allexecutive steering committee discussionsand contribution to eight distinct workstreams. This included key areas such asprogramme management office (PMO)processes and controls design, businessprocess design, and deployment of realtime cost and customer impact metrics. We also provided an integrated qualityassurance and process design team, which reviewed PMO processes andprocedures across nine functions.

ImpactWe leveraged our understanding of the industry to implementprocesses and improvements that fitted with the needs of theproject and the project team. As a result, the project hasdemonstrated strong PMO capability to the utility regulator,and has been able to operate and manage scope, schedule and budget to successfully meet project goals. A collaborativeproject environment was key to the project’s success, andenabled us to effectively implement the real-time processchanges which were needed to ensure the best outcome forthe client and their customers.


Business and market entry strategy We support a range of companies – fromutilities, independent power producers,and developers to manufacturers andenergy solution providers – with thedevelopment of their renewable energystrategies. Examples include marketassessments, business plan development,commercial due diligence, business modelinnovation, and internationalisation.

Project execution We provide advice to developers,manufacturers, operators, financialinstitutions, and investors throughout theproject lifecycle, including feasibilityanalysis, financing, tender andprocurement, construction, operations and management, and project exit. We have experience with solar, wind,energy storage, biomass, and othertechnologies, and we have also worked on projects for large utilities as well as the distributed generation market.

Operational excellence We support renewable energy companiesin all aspects of operations such as salesand marketing, supply chain, productdevelopment, finance effectiveness,operations and maintenance, andcustomer service. We can help you designyour company’s strategy and operatingmodel as well as identify operationalefficiency improvements and other meansof improving company performance.

Deals and investments We help with M&A and investment–relatedservices to power and utility companies,developers, and investors. Our advisoryservices include assisting with valuation,corporate finance, deal structure designs,business evaluation for stakeholderinvestments/divestments, due diligence,post-merger integrations and powerpurchase agreement definitions.

Renewable and cleaner energy Renewable energy is coming of age, but the regulatory,investment, and market support context are still complex.While there is clear interest from the investor community,many projects would benefit from more diligent, cross-functional planning and execution.

PwC provides advice across the renewableindustry value chain in a diverse range ofways to ensure that projects are bothefficiently developed and the power theygenerate earns a profit for investors.

How PwC can help

Our expert teams can help you throughevery stage of the renewable energylifecycle, no matter where yourorganisation resides in the value chain.

Government strategy and regulatory frameworksWe support public administrations and a wide range of renewable energyorganisations to determine an appropriateenergy mix and renewable energydevelopment frameworks. We provide a range of services, from designing policy and regulations to assisting withfinancial incentive structure design andtariff forecasts.

Financial and tax structuresWe develop financial models for renewableenergy projects, taking into account thetax and regulatory implications. Theseinclude financial and tax modelling,financing and tax structure evaluation, and debt and equity raising strategies. We also help assess and launch newfinancing vehicles such as ‘yieldcos’ andasset-backed securities.


Experience Brian has over 20 years ofexperience in strategy, deals and operations inthe energy, utility, and technology industries,much of it focused on helping design andimplement strategies for clean energy solutiondeployment. He has deep expertise in solar,wind, energy storage, smart grid, energymanagement, and biofuels/bioenergy.

Main clients served Vertically integrated solar manufacturers and developers/IPPs,energy storage/smart grid solution providers,major power electronics conglomerates,Japanese trading houses, and utilities.

His view on the single biggest challenge lying ahead for the renewables sector “The ability of renewable energy developers, utilities, andregulators to work together to figure out abalanced market structure that both drives theadoption of distributed generation and satisfiesthe needs of all (or at least most) keystakeholders.”

Favourite leisure pursuits Travelling, spending time outdoors, and playing sports with myfamily.


Brian D CareyGlobal subject matter expert:Renewable and cleaner energy

Experience Carlos is PwC’s Energy Leader inSpain. He also leads the Valuation & TransactionServices group with over 20 years’ experience inproviding professional advisory in Energy andInfrastructures. He has broad due diligence andvaluation experience for both corporate andprivate equity transactions, as well as taxvaluations, takeovers, independent valuations,intangible assets valuations and PPAs. He hasbeen involved in some of the most importantdeals in recent years.

Main clients served SunEdison, MSI, Macquarie, GIP, Iberdrola, Gas Natural Fenosa,ADIA, RwE.

His view on the single biggest challenge lying ahead for the renewables sector “Furtherpressure arising from the regulatory side leadingto M&A.”

Favourite leisure pursuits Enjoying outdoor activities with my family.


Carlos Fernández LandaGlobal subject matter expert:Renewable and cleaner energy


Working together – PwC and the SouthAfrica Renewable Energy IndependentPower Producer (REIPP) Programme

OutcomeThe REIPP Programme has mobilised large-scale finance fromboth local and international investors. To date, it has resultedin commitments to build 2,872MW of wind, solar PV andother renewable power facilities in Bid Rounds 1 & 2 with afurther 1,457MW at preferred bidder stage in Bid Round 3. In total, this represents approximately US$12bn of privatesector investment. With at least two further rounds of biddingplanned this figure can be expected to exceed US$20bn by2015.

ContextPwC has worked with the Government ofSouth Africa over a number of years aspart of a multidisciplinary advisory teamto develop the REIPP Programme that has set the benchmark globally for thecompetitive tendering of large-scalerenewable capacity.

What PwC didProviding both international expertise anddeep market knowledge, PwC’s team hasplayed a central role in the:• development of a procurement process

to stimulate the renewable energy market in South Africa.

• design of a transparent, fair, open and competitive procurement process and evaluation methodology.

• solicitation and evaluation of bids received, and

• assistance in the financial close of all projects selected.


Financing and procurement We can assist with the development of anappropriate financing strategy consideringthe various stakeholders and investmentoptions. We can design and assist with the implementation of an appropriateprocurement strategy that considers thedesired timelines, the financing andinvestment strategy (e.g. power purchaseagreements) and the technical approach(e.g. EPC).

Contracting and deliveryWe can assist in developing programmeand project management capabilities. We can help put in place the rightgovernance structures, controlenvironments and risk management toolsand processes to support the engineering,procurement and construction phase ofnuclear plants.

Start up, operations andmaintenance Commissioning a nuclear power plantinvolves a massive transfer of knowledge,information and data from the build team to operations. We can guide theestablishment of your managementoperating model, organisational design,management and regulatory compliancesystems, policies and procedures and helpimplement proven information technologysolutions for sustained high performance.

Decommissioning and disposal We’ve got direct insight into ways to plandecommissioning and the issue of legacywaste. We’re on hand to help you managerisks, maximise asset value and minimisecosts.

Nuclear energyNuclear power is an established part of the world’s energymix, providing a source of large-scale, low-carbon baseloadsupply in many countries.

The worldwide nuclear industry is in themiddle of a three-fold challenge ofextensive new build, increased efforts tomanage and extend the life of an agingglobal fleet and the widespreaddecommissioning of the oldest plants.

This brings particular challenges. How canfinances be raised to build new powerstations? How can projects be structuredand developed to the satisfaction ofinvestors while meeting the highest levelsof safety, security and safeguarding? Willthe supply chain cope with the increaseddemands upon it? Furthermore the role of nuclear in the energy mix entailsconsiderable public and political securitywhich adds to the intrinsic complexity ofdeveloping nuclear power projects.

How PwC can help

We have suitably qualified andexperienced experts, including nuclear,mechanical, electrical and civil engineers,project management professionals, ITprofessionals, lawyers, accountants, and other business support serviceprofessionals who can help you throughout the whole lifecycle of yournuclear programme (development,building, operation and decommissioning)within the highly regulated environmentthat applies.

Strategy and integration We can assist with developing a robuststrategic case for the development of anuclear power plant or the expansion ofexisting facilities, as well as designing asuitable road map for its implementation. This includes an understanding of the key regulatory regimes and global bestpractices.


Experience Nuclear Engineer with over 20 yearsof experience of project and programmemanagement in the nuclear industry in Europeand North America.

Main clients served EDF, French National Radioactive, Waste Management Agency,Alstom, Areva.

Her view on the single biggest challenge lying ahead for the nuclear energy sector“Long-term waste management.”

Favourite leisure pursuits Sailing in the Mediterranean Sea.


Françoise BergéGlobal subject matter expert:Nuclear energy

Experience Chris leads our global nuclearbusiness and our nuclear business in the UK.His personal expertise is in structuring andfinancing joint ventures and partnerships in thenuclear industry. He has worked on numerousinternational transactions alongside investors,developers, operators and government. He isalso an international tax expert dealing with alltax aspects of cross-border transactions,investments and day-to-day operations.

Main clients served Toshiba, NuGen, RWE, Westinghouse, EnergySolutions and Nuvia.He has also been involved with numerousinvestors on confidential sell-side and buy-sidetransactions.

His view on the single biggest challenge lying ahead for the nuclear energy sector “In theaftermath of Fukushima and in the currentchallenging economic environment, governmentsneed to be brave in their support for nuclearpower and in particular to encourage fundingand investment.”

Favourite leisure pursuits A keen trail runner and also enjoys both the destructive and thecreative aspects of garden landscaping!


Chris GreenGlobal subject matter expert:Nuclear energy


Working together – Emirates Nuclear EnergyCooperation strategic transformation

ContextThe Emirates Nuclear Energy Corporation(ENEC) is responsible for powering thefuture growth and prosperity of the United Arab Emirates through a safe and sustainable civil nuclear energyprogramme. Currently, ENEC has theworld’s most ambitious nuclear energyprogramme. It is committed to startoperating four reactors consecutively, each year, over a four-year period, the firststarting in 2017, in a country with zeronuclear operating history and experience.PwC was engaged by ENEC to resolve anumber of issues that the organisation was facing. The organisation structurewasn’t keeping up with the rate at whichthe organisation was growing which,among other things, resulted in lowemployee satisfaction. Other significantproblems included inconsistent views on organisational direction, priorities,measures and targets, inconsistencies in business planning and performancemanagement, and slow and cumbersomedecision making processes.

ApproachThe PwC team delivered a set ofsolutions in two phases: (1) the designand implementation of a transformationprogramme at ENEC headquarters tosupport operational readiness; and (2)the development of a detailed businessplanning and performance managementframework and set of processes for thefuture operating company.

OutcomesPhase 1• Clear and common strategic objectives, critical success factors,

measures, and targets at the corporate level.• Improved planning and performance management for ENEC’s

organisational structure.• Efficient and effective decisionmaking processes.• Improved support function performance, specifically HR/procurement

improved process efficiencies.• A new operating model that is commonly understood and

communicated within the entire organisation.

Phase 2• Commonly understood and bought-into objectives, critical success

factors, measures and targets.• Clearly defined planning and performance management framework

and processes.• Functional plans that are completely aligned to the objectives and

enterprise process architecture.


How PwC can help

We help you do better deals and createvalue through mergers, acquisitions,disposals, restructuring and joint ventures.

Before and during the deal We work with you to develop the rightstrategy, identify the right target, negotiateterms and finance and get the best dealstructure. We can help execute the dealseamlessly and identify issues and pointsof negotiation and value.

After the deal We’re on hand to implement changes todeliver synergies and improvements. We’re able to help you manage the post-deal integration process, carve outnon-core assets, and make changes torealise improvements in long-termperformance.

Joint ventures and strategicalliances JVs and strategic alliances are becomingincreasingly important in the utilitiessector. We can help with a detailedexamination of risks and how the structurecan reflect the fact that different partieswill be contributing different componentsto the venture.

Strategic insight PwC’s Strategy& provides its clients with a unique blend of strategic perspective and execution insights. We provideguidance on which deals can achieveclients’ strategic goals and how and when they should be undertaken, and we work alongside clients to activate thatvision across the entire deal spectrum. We provide a better deal outcome and amore robust process that helps clientstransform their business through dealsthat realise strategic goals, capture value,and deliver to shareholders.

Deals and energy financingYou know you’re on to a good thing if the markets smilewhen you announce a deal. The conventional reaction isfor the stock to take a knock. But that’s not been the caselately in the power and utilities sector.

Deals are firmly back on the table in theUS, for example, and Wall Street has been smiling. Companies are diversifyingtheir businesses and seeking to get a good balance between regulated and non-regulated earnings.

That’s not the only thing that’s changing.In Europe network divestment is movingapace as companies respond to regulatorymoves and strengthen their balance sheetin preparation for major capital projectinvestment. We’re seeing new buyerscoming into the sector. For example, theinfluence of international Chineseinvestors is important and likely to grow.

The shape of the sector is also changing as consolidation remains a strong force.And convergence between sectors can’t be ruled out as companies address fuel supply issues, the implications of smartergrids and new ways of thinking about and using electricity.


Experience Tom has more than 40 years ofexperience in a wide range of strategy andperformance consulting areas and has beeninvolved with the majority of the power and gasmergers in the US, as well as a number ofinternational privatisations and transactions.

Main clients served Southern Company, Duke Energy, NextEra Energy, Oncor, AEP, Xcel Energy.

His view on the single biggest deals and energy finance challenge lying ahead for thesector “The discipline of buyers will be tested in a shrinking target market.”

Favourite leisure pursuits Spending four hours on a mountain golf course.


Tom FlahertyGlobal subject matter expert:Deals and energy financing

Andrew McCrossonGlobal subject matter expert:Deals and energy financing

Experience Rob has been with PwC for 23years and in the deals business for 19 years. He specialises in providing acquisition servicesin the power & utility industry on behalf of bothcorporate and financial sponsor clients includingsignificant experience in cross-bordertransactions.

Main clients served Canadian Solar, Exelon, Laclede, Pattern Energy, TECO, Topaz Power,SunEdison.

His view on the single biggest deals and energy finance challenge lying ahead for thesector “The increasing competition forrenewable power assets.”

Favourite leisure pursuits Travel, skiing, reading.


Rob McCeneyGlobal subject matter expert:Deals and energy financing

Experience Andrew leads the InternationalDeals team in UK PwC Transaction Services. He also is Global leader of PwC’s Power &Utilities Transaction Services team.

Main clients served National Grid, Itochu, EDF, GIC, Wren House, GIP and CPPIB.

His view on the single biggest deals and energy finance challenge lying ahead for thesector “As energy transforms, targetidentification will cover a broader canvas.”

Favourite leisure pursuits Golf, travel, music and walking in the Lake District.


Working together – delivering insightinto value, synergy and growth

ContextNatural gas distribution companies have been attractive properties to put tothe market due to their scarcity and value-chain presence. Often, an auctionprocess is the preferred way to maximisethe value received. An existing naturalgas distribution client chose toparticipate as an auction bidder andknew that the pricing of its offer wouldbe highly dependent on the amount ofvalue that could be derived from theacquired company through growth oroperations. The client retained us to helpthem define and quantify that value.

What Strategy& didStrategy& has been involved in more than80% of the announced utility transactionsin the US. This prior transactionparticipation has enabled the developmentof unique insights into value creation andthe creation of a robust database onpotential synergy areas, values and prioroutcomes. The client requested that weapply our specialised knowledge to thetarget company to identify areas of overlapand duplication, economies of scale, capitalminimisation, revenue growth and costavoidance. We worked with the client todevelop a framework for synergiesassessment and for quantification anddetermination of the potential value ofthese benefits.

OutcomeThe client prevailed in the auction process and became theowner of the natural gas distribution company. The clientsubsequently retained us to design and support an overallintegration framework to bring the two companies together intoa single combined entity. We worked with the client to definethe overall integration philosophy, establish the integrationprocess, set up the respective teams, analyse integrationchallenges and opportunities and capture the identified valuefrom the combination. Currently, the client is ahead of itsexpectations for the capture of synergies and using the acquiredcompany to support a broader platform for growth andoperations enhancement.



How PwC can help

Effective project appraisal: getting itright from the start Sound project definition and effectivedecisionmaking at the outset of a capitalproject are critical to a successful outcome.We can assist you in taking the rightactions early to avoid costly errors later.

Avoiding surprises: getting the rightrisk management in place We can help you select from acomprehensive suite of control tools andprocedures to address detailed planningand scheduling, active changemanagement, cost controls, riskmanagement, quality controls, safetymanagement contract administration andregulatory compliance. You will also wantto establish detailed control analytics thatregularly analyse performance parametersand report timely, relevant and accuratemetrics to senior management and projectstakeholders.

Safeguarding success: strengtheningproject management andgovernance We can help you make the organisationalchanges needed to ensure you are ‘capitalproject ready’ or determine whether youneed to make changes in the middle of the project. We help large energyorganisations design and implement major change programmes that improveperformance, build capabilities, andstrengthen behaviour over time. Oursupport gives you the guidance and thepush to drive organisational change – such as moving from good to greatperformance, cutting costs, or turningaround a crisis.

Always ready: being your strategicdelivery partner During the delivery phase, we can help youkeep on track with support on scheduling,construction management, progressmeasurement and reporting as well as riskand chance management. If problemsarise, we can remedy matters with status

reviews, schedule slippage analysis,improvement measures and otherinterventions. We can help preventdisputes but, if you do have to go intodispute with a contractor, we can assistwith resolution and settlement.

Getting the project funded:overcoming obstacles We offer comprehensive financialadvisory services, helping you choosebetween debt or equity funding andproviding the experience to support youalong both routes.

Capital projects and infrastructureThe scale of capital project investment in the utilities sectoris immense. Many companies are managing the biggestcapex programmes they’ve ever undertaken.

It’s not only the scale that is bigger; thenature of capital projects is very differentfrom earlier periods of capital projectexpansion in the sector.

New and challenging locations add to therisks that have to be managed. Deepwateroffshore windpower development inEurope’s North Sea, for example, is nowbeing planned at 50-metre depths, withsubstantial shipping, port, foundations and rig requirements. There’s also thesheer variety of requirements. Gridinfrastructure, new transmission networks,better interconnectors, replacement ofageing assets are all pressing concerns,quite apart from investment in newrenewable, nuclear and fossil fuelgeneration capacity.

The challenge is all the greater because,often, companies find themselves havingto rebuild know-how and resources. In sectors such as nuclear power, a wholegeneration of experience may have beenmissed because of a hiatus in projects.

Sound project definition and effectivedecisionmaking at the outset andthroughout a capital project are critical to a successful outcome. It’s obvious andmost entities involved in a project knowthat. But still outcomes go wrong.


Experience Ten years of industry experience asproject manager of large-scale internationalprojects and 16 years of consulting experience,all around the setup and execution of large-scalecapital projects, both from operators’ as well ascontractors’ point of view in several parts of theworld.

Main clients served Vattenfall, Tennet, Transnet, RWE, EON, Siemens, MAN Power.

His view on the single biggest capital projects challenge lying ahead for the sector“The increasing competition for renewablepower assets.”

Favourite leisure pursuits Spending time with family and friends.


Martin BorkGlobal subject matter expert:Capital projects and infrastructure

Daryl WalcroftGlobal subject matter expert:Capital projects and infrastructure

Experience Daryl leads the CP&I practice in the US for a number of sectors. He is a civilengineer and subject matter specialist with over 22 years of programme management,project controls, programme governance,dispute analysis and construction experience on a variety of major capital projects andprogrammes.

Main clients served Southern Company,Pacific Gas & Electric, Duke Energy, CaesarsEntertainment, Apple and ContinentalEngineering Corporation.

His view on the single biggest capital projects challenge lying ahead for the sector“Finding experienced professionals with the right capabilities and skills to successfullydeliver large and complex projects.”

Favourite leisure pursuits Boating in and around San Francisco Bay.



PwC and project risk management for a leading European utility company

OutcomeThe risk assessment gave the utility company a muchmore secure evaluation of the risk in the project. The benchmarking provided some assurance as muchof the project set-up and performance compared withindustry best practice. Some improvements in selectedareas such as risk management and claimsmanagement were identified for action.

ContextIn a review of a major capital project, itbecame apparent to a leading Europeanenergy utility company that its riskmanagement approach was focused onrather qualitative descriptions of findingsand not enough on quantified riskevaluations. PwC was asked to conduct a risk assessment of the project with theproject team. The objective was to gain a sound assessment of the project risksituation and define pragmatic mitigationstrategies based on industry best practices.

What PwC didThe PwC team began by compiling aholistic assessment of the risks in theproject. Current risks were re-evaluated ona firmer basis and the potential for futurerisks during the remainder of the projectduration was assessed. Using theseinsights, the team conducted abenchmarking of the commercial projectmanagement areas against industry best practice to locate and identifyimprovement areas. Mitigation strategieswere then determined and ad hoc supportwas provided to the project team.

How PwC can help

PwC has developed a full set of leadingpractice capabilities in the core businessfunctions of a power and utilityorganisation. We are able to help you mapthe required business capabilities neededto support your key strategies relating toasset management, assess their maturityand gaps (in terms of structure, people,process, technology, data, metrics andculture) and develop roadmaps andbusiness cases to develop these capabilitiesas needed to successfully execute yourstrategies and accomplish your businessgoals. Examples of required strategicresponses in asset management include:

Delivering operational efficiency and cost control Flat revenue has meant that many powerand utility organisations must controloperating costs. Effective levers includeimproving workforce productivity viabetter work management (planning andscheduling, GIS, mobile, metrics etc.),supply chain management (strategicsourcing, robust procurement, contractormanagement) and performancemeasurement.

Improving operational performanceof your assets (reliability, unit costc/MWh etc.) Whether in the developed or developingworld, improving asset reliability is a corestrategy – accomplished by understandingyour critical assets, developing the rightmaintenance strategies/PMs and ensuringthey are implemented, eliminating badactors and leveraging new assettechnology.

Managing capital efficiency Understanding asset risk and assetcondition to support risk-informedcapital replacement decisions enables theintegration of asset investment planningand capital project portfolio managementso you invest where you most need to – and then leverage an efficient and well-measured capital project executioncapability to execute the optimisedportfolio.

Workforce renewal and knowledgetransfer With the average age of the powerutilities workforce in developed countriesclose to retirement age in many parts ofthe world, clear strategies are needed to‘renew the work force’. These need to be accompanied by effective ways oftransferring knowledge from the existingworkforce into systems, procedures andprocesses for the next generation ofworkers. We can help you with betterprocesses, accessible information andprocedures and proactive knowledgeretention – all part of an improved assetmanagement system.

Leveraging technology Advances in technology (materials,process, engineering, information) createthe opportunity for new strategies to dealwith the business and challenges issuesfacing utilities.

Enterprise asset management Depending on where they are in the world, power andutility organisations face a variety of asset managementchallenges which require appropriate business strategiesand supporting capabilities to address them.

Some of these challenges and strategiesare common, some are different – theyplace differing priorities and requirementson the capabilities of the assetmanagement system.

In the developed world many power andutility organisations are struggling withchallenges resulting from ageing assetsand an ageing workforce. At the same timeenergy demand is flattening and there iscompetition from other energy sources,since the business model is changing asrenewables and distributed generationmake an impact. The steady-state nature of the sector has changed. Governmentsand regulators are clamping down onemissions and setting renewables targets,while in gas transmission and distributiontighter regulations are forcing attention oncompliance activities, integrity and riskmanagement. Major investment is requiredto replace assets, upgrade and hardennetworks, store power and addresschanges in fuel supply, emissions targets,usage patterns and reliability. The detailedpicture varies from country to countrywith many common themes.

In developing countries, the businesscontext and drivers are typically quitedifferent. Demand for reliable power isgrowing strongly – although the worldwide focus on greenhouse gases and carbon still prevails, but usually with less intensity. Asset managementchallenges in the developed world aremore focused on the reliability andperformance of existing generation,transmission and distribution assets andthe construction of additional assets tomeet demand and extend supply toprovide better grid coverage. Growingfocus is being placed on safety and theenvironment in the more advanceddeveloping nations.



Experience Chris has focused on enterpriseasset management (EAM) throughout his careerand leads PwC’s EAM practice for the power &utilities sector in the US and globally.

Main clients served Pacific Gas and Electric, China General Nuclear Corporation, LacledeGas, Enel.

His view on the single biggest EAM challenge lying ahead for the sector “Given the globalchanges occurring in energy supply and usage – the biggest challenge for EAM is to developthe business capabilities and operating modelsrequired to support successful, adaptive P&Ubusiness strategies.”

Favourite leisure pursuits Golf and skiing – time with family and friends while wrestling with the course or slopes in great locations.


Christopher C FynnGlobal subject matter expert:Enterprise asset management


Working together – process and metricstandardisation on a single enterpriseEAM/ERP business platform for a largeand growing nuclear fleet

ContextOne of the three large state-ownedentities in China responsible for growing China’s nuclear power fleet to 100 reactors over next ten yearswanted to adopt a fleet-wide standardset of leading nuclearpractices/processes/metrics on a singleenterprise system. The company is itselfgrowing from four operational reactorsin 2009 to more than 25 by 2020,accompanied by explosive growth intheir nuclear workforce. The project was to be accomplished with minimaldisruption to the business operations oftheir nuclear plants. The programmealso included another importantrequirement – the need to support plansfor an IPO launch by implementingrobust, transparent managementsystems on a modern tier 1 businessplatform.

What PwC didLeveraging PwC’s nuclear solutiontemplate and Leading Enterprise AdvisoryPlaybook (LEAP), PwC successfullyimplemented a full ERP and EAM solutionon the SAP ECC platform. The scopeincluded work and asset management,operations support, financials, core HR,supply chain management,document/records management and othernuclear applications to fully support theStandard Nuclear Performance Model.PwC integrated SAP with Oracle PrimaveraP6 for scheduling outage work andimplemented SAP WCM for WorkClearance Management. PwC alsodesigned and developed role-based front-end “control panels” designed tosimplify access to SAP transactions for all functional areas – finance, SCM,maintenance, engineering, correctiveaction, operations and other roles. Theproject included an intensive training andOCM effort – thorough role/process-basedmandatory training for several thousandusers across the various plants.

OutcomePwC accomplished a smooth and successful go-live of the standard fleetsolution in an initial implementation across world’s largest reactor site(six reactors) in 18 months. This standard solution was then rolled out to five additional multi-reactor plants with around 20 reactors in variousstages of construction and commissioning – a number of which have now linked to the grid in full production. Our client has accomplishedtheir objectives of a fleet-wide solution with standard metrics andprocesses – incorporating the leading US nuclear practices. They haveaccomplished a successful IPO and are highly regarded and recognised as a leading force in nuclear power.

Financial reporting in the powerand utilities industry


Financial reportingPwC audits power and utility companies in all the mainsectors – gas, electricity, water, renewables and otherservices – and in all main markets around the world.

We bring a deep understanding of thespecific issues that your company and the sector is dealing with. We’re in a good position to ensure that these areappropriately responded to in audit andreporting.

One of the challenges of financialreporting is how best to interpret andimplement accounting standards in thecontext of a specific company or industry.Those standards are themselves constantlyevolving. And the challenge is all thegreater in an era of energy transformationwhen the nature of the sector is evolvingrapidly and companies are moving intonew business areas. We have considerableexperience of helping power and utilitiescompanies apply standards effectively.

How PwC can help

Insight into your sector We pride ourselves on matching our auditskills with knowledge of your sector. One of the big challenges of any financialreporting standard is how best to interpretand implement it in the context of aspecific company or industry.

Handling complexity We have the knowledge and experiencenecessary to help you with complexfinancial accounting issues related tomatters such as valuations, pensions and share plans, listings, InternationalFinancial Reporting Standards (IFRS)conversions, and corporate treasury and company secretarial functions.

Best practice methodology We use a single, global audit methodology,fully compliant with International Auditing Standards and applicablenational standards. Our globally consistentapproach to audit means that regardless of location, PwC people can understandand evaluate your business using a singlelanguage and common methods. In turn,that gives you a uniform level of quality in all our audits.

Able to respond to your needs Our methodology also enables us toquickly organise and deploy the kinds ofmultinational audit teams often requiredby larger power & utilities companies.

Non-financial reporting We are leaders in the development of non-financial performance reporting,helping our clients respond to the need forgreater transparency, improved corporategovernance, and business models basedon the principles of sustainability.


Experience Philippe is a partner in PwC’sCapital Markets & Advisory Services groupbased in Paris and leads the French capitalmarkets practice.

Main clients served Engie (GDF-Suez), Enel, Solairedirect.

His view on the single biggest financial reporting challenge lying ahead for the sector“Financial reporting, financial communication:how to reconcile both.”

Favourite leisure pursuits Cooking and tasting!


Philippe KubisaGlobal subject matter expert:Financial reporting

Experience Michael has many years ofexperience in the energy industry, has technicalaccounting expertise in German GAAP and IFRSand is the lead partner for a major multinationalutility audit client.

Main clients served RWE, E.ON.

His view on the single biggest financial reporting challenge lying ahead for the sector“Communicating progress in the transformationto new business models transparently.”

Favourite leisure pursuits Running, swimming, hiking.


Michael ReutherGlobal subject matter expert:Financial reporting

This regularly updated, highly practical handbooklooks at the particular challenges of applyingInternational Financial Reporting Standards (IFRS) in the power and utilities sector. Drawing on ourconsiderable experience of helping companies applyIFRS effectively, we include a number of real-lifeexamples to show how companies are responding tothe various challenges along the power and utilitiesvalue chain.


Working together – IFRS 15 project

OutcomeThis project gives us a strong foundation and reference pointfor future proposals related to IFRS 15. The application ofthe new revenue standard is mandatory from 2017, meaningthat many companies will have to perform diagnostics.

ContextThe new revenue recognition standard,IFRS15, is effective from 1 January 2017.In order to prepare, a major power andutilities company asked us to help them in their diagnostics project. Given thestructure of the group (multiple businessunits (BUs) with various activities), thegroup requested our assistance withcontrol and coordination of the project,IFRS 15 diagnostics within each BU, andtechnical interpretation of the standard in specific complex situations.

What PwC didWe tailored our services in order to meetthe client’s specific needs across all thephases of the project. Teams were deployedto each BU, comprising a mix of clientemployees and PwC experts. We providedthe company with assistance in:• the identification of the different

categories of contracts within each business unit

• drafting preliminary analysis of the contracts

• completing the analysis of contracts• preparing presentations for the CFO,

the Audit Committee, and the group’s external auditors.


How PwC can help

PwC has a global expert team dealing withcommodity trading and risk managementwith a special focus on the power &utilities industries.

Setting the right strategy We can help you develop clear policies andstrategies to understand and engage withthe market environment in ways that areconsistent with your commercialimperatives and risk appetite. We can helpyou align your activities to fit with marketchanges and new developments.

Managing risk effectively We can advise on the risk frameworks,controls and systems that need to be inplace to manage risks and opportunitieseffectively. This includes defining adequateprinciples for risk measurement.

Implementing trading processes and systems We can design and assist with theimplementation of trading processes,support selection and rollout of tradingsystems, improve the effectiveness andefficiency of trading execution andtest/audit trading control frameworks.

Governance, accounting andcompliance We advise on a wide range of requirementsto ensure you are compliant withregulatory requirements and have effectivegovernance in place in order to managethe accounting and tax impact of anytrading or use of financial instruments.

Commodity trading and riskmanagementThe trading environment in the power and utility industriesfaces substantial changes. This is driven by increaseddecentralised energy production on the one hand and byregulatory changes in market setup on the other hand.

This economic environment is putting theprofitability of trading under pressure.

On top of this, utilities are treated byfinancial regulators more and more in the same way as banks. This has thepotential to lead to a decrease in marketparticipants, reduction in liquidity and – as a consequence – higher trading costs.Some financial players have already moved out of the commodity tradingbusiness.

Companies are heavily engaged in tradingto balance their portfolio and add moreflexibility to their asset position.Commodity trading is an integral part ofthe companies’ activities and managesmarket risks for the whole value chainfrom generation to sales. But the changesthat are taking place and the decreasingprofitability of trading activities requirecompanies to revisit their risk strategies,the setup of trading activities (includinglocations) and the way they conduct theirrisk management.


Experience Over 25 years of experience,including 15 years with the PwC and ten as a partner, Vincent’s main areas of expertise are:treasury, financial & commodity riskmanagement.

Main clients served Engie (formerly GDF SUEZ), EDF, Veolia, Total.

His view on the single biggest CTRM challenge lying ahead for the sector“Integrating the physical and the financialelements.”

Favourite leisure pursuits Vincent majored in philosophy and he still is an avid reader.


Vincent Le BellacGlobal subject matter expert:Commodity trading and risk management

Experience Folker heads PwC’s internationalcommodity trading and risk managementnetwork. He has 19 years of experience withPwC and has specialised in energy trading andrisk management as well as corporate treasuryactivities since 2000.

Main clients served E.ON, RWE, Gazprom, OMV, various regional utilities.

His view on the single biggest CTRM challenge lying ahead for the sector“Generating profits in a more regulatedenvironment with low margins.”

Favourite leisure pursuits Opera and hiking/skiing in the Alps.


Folker Trepte Global subject matter expert:Commodity trading and risk management

Experience Pankaj has broad experience of integrating commercial power operationsincluding merchant, reliability, renewable andgeneration functions. He has implemented end-to-end energy trading functions includingphysical, financial, and renewable products.

Main clients served Xcel Energy, PSEG, PGE, Iberdrola, AES.

His view on the single biggest CTRM challenge lying ahead for the sector“Integrating renewable and dispatchableresources in the energy supply and tradingportfolio.”

Favourite leisure pursuits CrossFit and cricket.

Contact [email protected] or phone +1 213 217 3563.

Pankaj Sahay Global subject matter expert:Commodity trading and risk management


Working together – PwC putting tradingon firm foundations

OutcomeThe result of the project was a development of a targetoperating model for the trading activity within thegroup. We provided a full overview of the new activityand the structural changes that were needed, includingIT systems, processes, organisation, locations, tax andreporting. The final setup of the new trading companywas defined and an implementation plan to bring it tolive was formulated.

ContextA multinational energy company hadcommodity trading activities spread overthe group and performed by decentralisedunits around the world with no uniformtrading steering. This was mainly causedby the past setup of the group andacquisitions. The company wanted toestablish a new commodity tradingstrategy and setup to efficiently managethe relevant risks in the group, specificallymarket risk in generation. The transferprice mechanism between trading,generation and sales also needed to beadjusted.

What PwC didWe supported the company by defining the main objectives for the future tradingstrategy. Based on this strategy, the targetoperation model for the trading businesswas developed. Key issues were thecentralisation of the trading business with local hubs, the hedge strategy forgeneration and sales as well as thedefinition of transfer prices. As well astaking the economic view into account,other implications such as taxes, regulationand reporting were assessed.


PwC – on hand wherever you need us worldwide

Customer transformation Yvonne [email protected]

James Curtin [email protected]

Market designKaren Dawson [email protected]

Paul Nillesen [email protected]

PwC global power & utilities centre of excellence

Over

4,000 power & utilities specialists...

In

157countries...

More than

195,000people worldwide...

Global Power & Utilities Leader Norbert Schwieters [email protected]

Global Power & Utilities Assurance Leader Jeroen van Hoof [email protected]

Global Power & Utilities Advisory Leader David Etheridge [email protected]

Global Power & Utilities MarketingOlesya [email protected]

Supply chain managementEric Finch [email protected]

Smart energy and distributedgenerationSteve [email protected]

Renewable and cleaner energyBrian D [email protected]

Carlos Fernández Landa [email protected]

Nuclear energyFrançoise Bergéfrançoise.bergé@fr.pwc.com

Chris [email protected]

Deals and energy financingTom [email protected]

Andrew McCrosson [email protected]

Rob [email protected]

Capital projects and infrastructure Martin [email protected]

Daryl Walcroft [email protected]

Enterprise asset management Christopher C [email protected]

Financial reporting Philippe Kubisa [email protected]

Michael [email protected]

Commodity trading and riskmanagementVincent Le [email protected]

Folker [email protected]

Pankaj [email protected]


SpainCarlos Fernandez LandaTelephone: +34 915 684 839Email: [email protected]

SwedenAnna ElmfeldtTelephone: +46 10 2124136Email: [email protected]

SwitzerlandMarc SchmidliTelephone: +41 58 792 15 64Email: [email protected]

TurkeyMurat ColakogluTelephone: +90 212 326 64 34Email: [email protected]

United KingdomSteven JenningsTelephone: +44 20 7212 1449Email: [email protected]

Middle East and Africa

Middle EastJonty PalmerTelephone: +971 269 46 800Email: [email protected]

Anglophone & Lusophone AfricaAngeli HoekstraTelephone: +27 11 797 4162Email: [email protected]

Francophone AfricaNoel AlbertusTelephone: +33 1 5657 8507Email: [email protected]

The Americas

Argentina/Latin AmericaJorge BacherTelephone: +54 11 5811 6952Email: [email protected]

BrazilRoberto CorreaTelephone: +55 31 3269 1525Email: [email protected]

CanadaBrian R. PothTelephone: +1 416 687 8522Email: [email protected]

United StatesMichael A. HermanTelephone: +1 312 298 4462Email: [email protected]

Norbert SchwietersGlobal Power & Utilities LeaderTelephone: +49 211 981 2153 Email: [email protected]

Jeroen van HoofGlobal Power & Utilities Assurance LeaderTelephone: +31 88 792 14 07Email: [email protected]

David EtheridgeGlobal Power & Utilities Advisory LeaderTelephone: +1 925 519 2605Email: [email protected]

Olesya HatopGlobal Power & Utilities MarketingTelephone: +49 211 981 4602Email: [email protected]

Territory contacts

Asia-Pacific

Australia & East ClusterMark CoughlinTelephone: +61 3 8603 0009Email: [email protected]

ChinaGavin ChuiTelephone: +86 10 6533 2188Email: [email protected]

IndiaKameswara RaoTelephone: +91 40 4424 6688Email: [email protected]

IndonesiaSacha WinzenriedTelephone: +62 21 52890968Email: [email protected]

JapanYoichi Y HazamaTelephone : +81 90 5428 7743Email: [email protected]

KoreaLee-Hoi DohTelephone: + 82 2 709 0246 Email: [email protected]

Europe

AustriaMichael SponringTelephone: +43 1 501 88 2935Email: [email protected]

BelgiumKoen HensTelephone: +32 2 710 7228Email: [email protected]

Global contacts Central and eastern EuropeAdam OsztovitsTelephone: +36 14619585Email: [email protected]

DenmarkPer TimmermannTelephone: + 45 39 45 91 45Email: [email protected]

FinlandMauri HätönenTelephone: + 358 9 2280 1946Email: [email protected]

France Pascale JeanTelephone: +33 15657 1159 Email: [email protected]

GermanyNorbert SchwietersTelephone: +49 211 981 2153Email: [email protected]

GreeceVangellis MarkopoulosTelephone: +30 210 6874035Email: [email protected]

IrelandAnn O’ConnellTelephone: +353 1 792 8512Email: [email protected]

IsraelEitan GlazerTelephone: +972 3 7954 830Email: [email protected]

ItalyGiovanni PoggioTelephone: +39 06 570252588Email: [email protected]

NetherlandsJeroen van HoofTelephone: +31 88 792 1328Email: [email protected]

NorwayHildegunn Naas-BibowTelephone: +47 9526 0118 Email: [email protected]

PolandPiotr LubaTelephone: +48227464679Email: [email protected]

PortugalJoao RamosTelephone: +351 213 599 296Email: [email protected]

RussiaTatiana SirotinskayaTelephone: +7 495 967 6318Email: [email protected]

Contacts

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should notact upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express orimplied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law,PricewaterhouseCoopers does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone elseacting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

© 2015 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms ofPricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each memberfirm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients.PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professionaljudgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it controlthe exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.

PwC helps organisations and individuals create the value they’relooking for. We’re a network of firms in 157 countries with morethan 195,000 people who are committed to delivering quality inassurance, tax and advisory services.

The Global Energy, Utilities and Mining group is the professionalservices leader in the international energy, utilities and miningcommunity, advising clients through a global network of fullydedicated specialists.

For further information, please visit:www.pwc.com/utilities

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