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Empowering utilities

Empowering utilities

Creating value from physical assets

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Partner, Advisory Global Infrastructure Advisory & Mining

KPMG in Canada

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Aging energy assets are a problem in many regions in North America. For example, in the Province of Ontario, the Mowat Centre’s Report on the Ontario Energy Sector notes an average of $15 Billion a year will need to be invested over the next two decades just to maintain current service levels1.

Planning for future population and growth needs

In its 2017 Long Term Energy Plan, the Province of Ontario highlights the current need to right size and expand assets at their end of life to align with the needs of a rising population.

On one hand, rising regulatory and public pressures are pushing to keep costs to a minimum and customer rates low, while on the other, utilities are faced with maintaining, upgrading or replacing aging assets and delivering reliable service to a growing population; According to Statistics Canada, the population of Canada will continue to grow over the next 45 years to between 40.0 million ~ 63.5 million in 20632.

How do utilities strike a balance between these competing challenges? First, utilities need to ensure they deploy capital effectively, and reduce lifecycle costs by applying robust Asset Management Processes. These Asset Management Processes target optimizing the use of capital by focusing on value based maintenance (as opposed to periodical maintenance), and scheduling right-sized maintenance interventions, asset upgrades, or replacement projects, at the right time, to minimize lifecycle costs while ensuring reliability of service.

Eight step methodology

In our experience, an effective Asset Management Process should incorporate an eight step methodology. To learn more, read the full report.

 

1 Mowat Centre. (2016, December). Background Report on the Ontario Energy Sector. Retrieved from Mowat Centre: https://www.mowatcentre.ca/wp-content/uploads/publications/134_EET_background_report_on_the_ontario_energy-sector.pdf

2 Statistics Canada. (2015, November 30). Highlights. Retrieved from Population Projections for Canada (2013 to 2063), Provinces and Territories (2013 to 2038): http://www.statcan.gc.ca/pub/91-520-x/2014001/hi-fs-eng.htm

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