Accelerating the journey to net zero

are in high demand. As another example, Ontario’s Express Entry Skilled Trades Stream has removed requirements for domestic experience for foreign nationals with experience in skilled trades. Now, those with the right work experience can transfer their accreditations by passing an exam. Apply digital tools Project owners can build smart, data-driven setups across the value chain and life cycle. Advanced analytics and digital twins are now table stakes; including them from the outset will help optimize the system as a whole. Digital twins in particular are needed not only for operations but also for optimizing or right-sizing project designs and delivering the lowest life cycle costs needed to make projects economical. Advanced analytics or an AI-enabled digital twin can add 5 to 15 percent savings over so-called basic techno-economic models. This is achieved by subcomponent granularity, a look “inside” the chemical or physical properties, and increasingly accurate dynamic optimization. In addition, if the digital twin is set up correctly during the design phase, it can serve as the basis for a variety of use cases throughout the plant life cycle, ranging from operations and maintenance to strategic investment. Without a large pool of project examples to learn from, many project owners may feel that they’re starting from scratch, and they may be tempted to take it slow and steady. But at the current pace, the world will never hit its 2050 goals. Capital project leaders have a range of options to reconsider how they approach project costs, from project design to future-proofing the partnerships and capabilities that will provide the foundation for hyperscaling.

are designed for the minimum technical solution. This can be done in part by taking a radical approach to design and standardization. For example, Tesla claims that it has been able to reduce the capital expenditures per gigawatt-hour of its gigafactories by 70 percent, which has led to knock- on benefits of standardized materials and supplies. 10 In addition, this approach has been facilitated by the creation of an ecosystem of partners and suppliers that are aligned on aspirations related to speed, massive scale, and low costs. Engage in collaborative contracting Players can pursue strategic partnering models across the value chain with suppliers that are new to the industry. Companies can also consider investing time and energy into building more collaborative partnerships with contractors rather than relying on transactional bid—buy relationships. One option is developing an ecosystem of contractors, for which shared incentives and partnerships can be improved with each subsequent build, as opposed to changing up contracts each round. Our analysis shows that undertaking multiple projects in parallel and using the same contractors can improve performance by an additional 15 to 20 percent beyond the average. Build next-generation capabilities Simply put, the industry needs more people with clean-energy expertise. Although training can help upskill current employees and ensure they’re ready to tackle climate change on the ground, more skilled workers will be needed. On this point, players can partner with unions, trade schools, and vocational schools to build their talent pools. For instance, in 2018 Quanta Services acquired Northwest Linemen College, which focuses on the electric power industry. This allowed Quanta to create a pipeline for certified line technicians, who

10 Global Energy Perspective, April 26, 2022 .

Zak Cutler is a senior partner in McKinsey’s Toronto office, and Sam Linder is an associate partner in the Houston office.

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