Power and energy work concentrates risk into narrow windows and long contracts. Outages compress a year’s margin into weeks of access, and long programmes sit exposed to escalation, milestone cash shapes and liquidated damages that can exceed the margin beside them.
The decisions that shape value
- Where to compete. Outage and maintenance work, connection packages, renewables construction, long-term service agreements — which segments earn a return, and which are bought with margin the business cannot afford to spend.
- What the transition requires. Renewables, storage, firming and grid work demand different capability, risk appetite and balance sheet from thermal maintenance — and the honest answer may be build, buy, partner or decline.
- Whether growth is fundable. Larger contracts consume bonding capacity, working capital and covenant headroom well before they produce cash.
Where value gets lost
- Outage work priced tightly for the relationship, while the contractual downside — damages, delay, access failure — exceeds the available margin.
- Contract economics that looked acceptable at tender but move through mobilisation, sequencing changes and discovered conditions.
- Escalation and milestone structures that leave the contractor funding the project through its middle months.
- Project controls that identify margin erosion after the economics have already moved.
What management tends to see
An outage season that ends profitably on paper and tightly for cash; a forecast that repeats itself for months and then jumps; and the next bid priced from the last bid rather than from delivered cost.
Where Graham Montrose can help
- Enterprise Performance — cash conversion across the contract portfolio, asset productivity, and the management information long contracts demand.
- Commercial Finance — bid and tender economics, contract and milestone structures, project controls and cost-to-complete, and the funding and covenant implications of growth.
- Corporate Development — build, buy or partner assessment, acquisition and target economics, capital requirements for growth, and ownership or succession decisions.