Cost Insights
by PowerAdvocate

Intelligence for energy companies seeking a data-driven approach to cost management

Solar Tariffs Expected to Impact Costs for Solar Projects: How to Mitigate, Plan, and Prepare 

February 26, 2018 at 2:49 PM / by Samantha Walter & Justin Steimle posted in Cost Reduction, Industry Insights, Utility, Capital Projects, Data and Analytics, should-cost, solar

Higher prices are on the horizon for utility-scale solar projects due to tariffs and quotas recently approved by President Trump. This new legislation could seriously impact financial plans for solar projects, but expertise in capital projects, specifically renewable projects, can help utilities, EPCs, and developers mitigate these costs and prepare for future changes.

Why are the rules changing?

In September, the International Trade Commission (ITC) determined that U.S. solar manufactures experienced significant injury due to imports of crystalline silicon photovoltaic (CSPV) solar cells and modules. This investigation stems from the United States’ Global Safeguard law, where an industry representative may petition the ITC to determine if imports are causing “serious injury” and recommend remedies. The petition was filed by the recently bankrupted Suniva and later joined by SolarWorld.

On January 22, the Trump Administration followed through with the recommendations from the ITC and imposed a four-year solar import tariff that will start at 30 percent in the first year and gradually drop to 15 percent. This tariff will apply to all CSPV solar cells and modules that are imported into the U.S. There is a quota specifically for solar panel cells which excludes the first 2.5 GW of cells imported into the U.S. each year, but the details on how the quota will apply remain undetermined. Like the tariff, the quota will last four years.  All countries are included except for Generalized System of Preferences (GSP) beneficiary countries, which account for less than three percent of total imports.

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One of the Greatest and Most Overlooked Savings Opportunities in 2016

February 24, 2016 at 2:31 PM / by PowerAdvocate posted in Cost Reduction, Industry Insights, E&P, Utility, Midstream, Downstream

In the midst of $30 oil, no savings opportunity should be overlooked. Even still, with so many categories of spend among a multitude of suppliers to consider, it's difficult to prioritize, and even more difficult to find unexpected areas of savings.

Read on to find out how freight is one of the greatest (and most overlooked) savings opportunities in 2016…

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Top 10 Categories to Save on Steel

May 12, 2015 at 5:24 PM / by PowerAdvocate posted in Cost Reduction, Industry Insights, Utility

The historic drop in steel prices continues.  Leading the pack is hot-rolled coil, down almost 35% since last year.

 

Decline

 

We looked at over $50 Billion dollars of sourceable, North American Utility spend in 2014 to see what the top steel dependent categories were.  Below are the top 10 ranked by steel exposure.

 

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Tactical Savings Guide: Supplier Efficiency Analysis

March 6, 2015 at 1:21 PM / by PowerAdvocate posted in Cost Reduction, Industry Insights, Inefficiency Costs, E&P

This post lays out the details behind a tactical execution of Supplier Efficiency Analysis, and provides strategies for driving back inefficiencies both internally, and with OFS vendors. Specifically, it outlines:

  • Data requirements: What data do you need access to?
  • Steps of the analysis: What are the steps to follow in running the analysis?
  • Suggestions on execution: How have we seen other companies actually execute and realize the savings opportunities uncovered by the analysis?
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Don't Just Stand-By on Inefficiency Costs

March 6, 2015 at 11:15 AM / by PowerAdvocate posted in Cost Reduction, Industry Insights, Inefficiency Costs, E&P

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In our last post, we covered price variance analysis, and how it allows E&P companies to recognize huge opportunities for price standardization. This post – the 3rd in our Smart Savings Series – covers a different type of internal benchmarking: Supplier Efficiency Analysis. Firms that can identify and minimize service providers’ inefficiencies, as well as their own inefficiencies, typically achieve an additional 5-10% savings across oilfield service (OFS) items like “Rig Operations”. To put that number in perspective, 40% of a typical E&P firm’s spend is on OFS, meaning this analysis can help you achieve enterprise-wide savings of 2-4%, which amounts to $20 - $40 MM of annual savings for each $1 B you spend each year.

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Oil Has Crashed. Which of Your Suppliers are Withholding Savings?

March 4, 2015 at 5:44 PM / by PowerAdvocate posted in Cost Reduction, Industry Insights, E&P, Utility, Midstream

When oil prices crash as they have recently, some suppliers will try and keep those savings for themselves.  By looking at the prices of products and services that are affected by the price of oil you can identify savings opportunities.  As an example, let’s take a closer look at how freight costs (which are largely driven by the cost of gasoline and diesel) have reacted as gas prices have plummeted over the last 9 months.

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The 3 Biggest Challenges the Midstream Industry Faces in 2015

February 3, 2015 at 4:13 PM / by PowerAdvocate posted in Project Estimation, Industry Insights, Midstream

The midstream industry is experiencing more pressure than ever before: with rising costs, missed estimates, and the threat of declining volumes, midstream companies are experiencing challenges from all sides. In this industry overview, our energy experts show you the hard data behind the 3 biggest challenges you’ll face in the coming year.

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