This article was written in collaboration with Arnaud Rorgiez, eng., EMBA, PMP, a partner at Strategia Conseil, and Pier-Olivier Leclerc, eng., PA LEED, a project management consultant at Strategia Conseil.
The energy sector in Québec is currently undergoing a major transformation driven by the rise of renewable energy, including solar, wind, hydro, biomethanization and green hydrogen. This evolution is of a piece with a government policy seeking to effectively promote energy transition in the province.
This transition isn't merely technological. It is an opportunity to rethink the contractual strategies used for delivering projects and to institute best practices for project management and cost control. The goal is two-fold: to de-risk projects and ensure that established timelines and budgets are met.
In keeping with long-standing practice, energy sector projects have typically followed the traditional model, where each phase – from design to construction – is segmented and assigned to different entities. Alternatively, some projects follow the engineering, procurement and construction management (EPC/M) model. Although this model integrates the various stages of the project, its transactional framework can often be quite rigid, primarily due to its fixed-price structure. It also transfers a substantial portion of the risk to the contractor, which in turn reduces flexibility and limits the client's ability to make changes once the project is underway.
New project delivery trends
The construction industry has changed significantly over the last few years, moving progressively towards more collaborative approaches. This shift towards collaboration is driven by the desire to optimize value for each dollar invested, improve efficiency, shorten lead times and stimulate innovation in a context characterized by increasingly demanding technical, technological, regulatory and environmental constraints and adapt to such growing challenges faced by the energy sector.
The current transformation in project management is largely grounded in collaborative approaches, particularly through the models of integrated project delivery (IPD) and progressive design-build (PDB), which offer several major advantages:
- Collaboration beginning at the design phase: As of this step, the various parties involved, including the general contractor, work in close collaboration. This interaction fosters deeper understanding of the project's objectives, allows for the integration of diverse sets of expertise and perspectives, and paves the way for more innovative design solutions better suited to the specific requirements of the project.
- Effective risk management: These models promote proactive risk allocation and management as of the project's inception. All the key players participate in identifying, analyzing and collectively managing the risks, which reduces uncertainty and allows for risk to be shared more evenly among the stakeholders.
- Optimized communication and coordination: Smoother communication and closer coordination among the parties are also major benefits. Transparency and the constant exchange of information help avoid misunderstandings, reduce errors, anticipate eventual problems and accelerate decision-making. These aspects contribute to smoother project execution and can significantly reduce costs and shorten lead times.
- Technological agility and innovation: Collaborative models improve agility, allowing projects to keep up with technological innovations in the energy sector. As engineers, suppliers, contractors, and clients work closely and collaborate with one another, it is easier to integrate new technologies and sustainable solutions as they emerge.
By adopting these models (or hybrid versions of them), energy sector stakeholders, i.e. owners, promoters, financial backers and contractors, can work together to identify, assess and manage risks from the outset. This not only leads to better predictability and control of costs and deadlines, but also fosters an environment of trust and cooperation, which are essential for innovation and the success of the project.
These models are particularly well-suited to energy projects due to the high degree of technical complexity and the risks associated with the procurement of highly specialized equipment and components.
The contractual framework, being the project's ownership structure, along with the supply and construction contracts, must be thought out and structured in accordance with this new management model.
The role of project management
In this context, project management is not limited to budget and timeline monitoring. Instead, it plays a direct role in facilitating effective collaboration among all stakeholders.
Objectives are defined and plans are developed and elaborated in consultation and with the participation of all parties involved. Proactive risk management is a hands-on problem-solving exercise. Project managers no longer merely identify potential risks but work with the team to develop concrete and responsive mitigation strategies and have to monitor such risks during the execution phase.
Collaborative project management helps keep all the parties aligned with the project's long-term goals. It ensures that projects involving multiple parties and complex tasks progress coherently and efficiently towards completion.
In summary, under collaborative models, energy construction project management is no longer merely an administrative function. It plays an essential role in the project, transforming challenges into opportunities and ensuring success in a constantly evolving sector.
Conclusion
Collaborative project management and delivery models have undeniable advantages for the construction industry, particularly in the energy sector, which is characterized by a high degree of technical complexity and involves the procurement of highly specialized equipment and components.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
