wm brand Cost Insights

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

Key Global Cost Trends in Mining: December 2021 - December 2022 Forecast

February 2, 2022 at 2:55 PM / by Wood Mackenzie Supply Chain posted in Cost Reduction, Industry Insights, Mining

2022 presents a challenging cost environment for mining operators as inflation in cost inputs pressures operating margins. Meanwhile, the stakes of effective cost management will be high as operators face complex capital allocation decision-making as they re-position for the Energy Transition.

In our January report, we provide global 12-month forecasts for key mining cost categories, including mining loading and hauling equipment, explosives and maintenance services.

Operators leverage these forecasts to enhance their budgeting accuracy and to drive market-based cost reductions.

 

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2022 EMEA Power & Utilities Market Report

January 19, 2022 at 10:45 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

2022 marks an opportunity for Power, Utilities and Renewables’ operators to overcome cost challenges presented amid last year's turbulent market through appropriate CAPEX and OPEX forecasting. In our January report, we identify and provide cost forecasts for key CAPEX categories including transformers, switchgears and solar modules; and OPEX categories including different construction and maintenance services.

 

 

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Debrief of 2021 Power & Utilities Executive Forum

December 6, 2021 at 10:58 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

In October, executives from over 30 utility firms joined us at our 2021 Power & Utilities Executive Forum to share their perspective on a growing number of complex, compounding challenges, from the energy transition to supply chain risk management.

In this brief report, we highlight 3 key themes & strategies shared by utility executives to deliver higher levels of enterprise-wide value through the supply chain, focusing on: pushing key ESG objectives; navigating market volatility to deliver savings and market competitiveness; Defining new processes for identifying and managing novel supply chain risks.

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Key Cost Trends in EMEA Upstream: September 2021 - December 2022 Forecast

December 2, 2021 at 11:56 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

Our EMEA Oil & Gas Upstream Market Report provides granular historical and granular cost trends for key categories of spend.

In our November 2021 report, we expect deflation of -2.4% in CAPEX costs and inflation of 3.3% in OPEX costs over the next 12 months.

Notable cost trends include sharp reverses from recent bullish inflation with OCTG costs expected to fall by -29.6%, Subsea Equipment costs by -14.2% and Production Chemicals costs by -0.8% from September to December 2021.

 

 

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Supply Chain Impact Analysis of Chinese Power Shortages

November 3, 2021 at 4:26 PM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

PowerAdvocate is a global data analytics provider and consultancy. For over 20 years, we’ve been working with over 150 energy operators, establishing supply chain as a strategic value creator for cost and risk performance improvement.

Market intelligence is key in driving procurement decision making that optimises costs to future market movements, enhances cost competitiveness to peers and monitors and minimises risk across the global supply chain.

In this Thought Leadership Report, we share our proprietary analysis of the impact of power shortages in China on the global supply chain. The analysis was conducted by our in-house Market Intelligence Group of experienced energy specific analysts and economic forecasters.

 

 

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Tackling the Global Supply Chain Crunch: Key Cost Trends for EMEA Power & Utilities September 2021

September 27, 2021 at 1:36 PM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

As commodity prices decline, labour shortages and freight constraints relieve, we expect the aggressive market inflation of the last year to soften and reverse, translating in forecasted price decreases in the next twelve months. In our September report, we provide cost forecasts for key utility & solar specific CAPEX categories including switchgears, transformers, solar modules; and OPEX categories including vegetation management, inverter maintenance and engineering services.

 

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Key Cost Trends in Onshore & Offshore Wind Aug 2021 - Aug 2022

September 27, 2021 at 11:33 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities, Renewables

Input costs for new wind construction projects are estimated to have increased by more than 31% since the beginning of 2020, driven predominantly by the rising price of metals and other raw materials used in major wind turbine components, including the tower, foundations, nacelles, rotor and transformers.

Steel prices have climbed by more than 200% as the demand continues to outweigh the supply.

You can find out more about how Capex and Opex trends will change as well as category level cost forecasts into 2022 in our latest report.

 

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Key Cost Trends in EMEA Upstream: July 2021 - June 2022

September 27, 2021 at 10:44 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Oil & Gas

2021 marks an opportunity for upstream operators to overcome cost challenges presented amid last year's turbulent market through appropriate CAPEX and OPEX forecasting.

In our July update, we identify and provide cost forecasts for key CAPEX categories including OCTG, onshore & offshore drilling rigs; and OPEX categories including production chemicals and equipment rental.

Some notable trends include equipment rental likely to experience one of the most notable cost increase (~5%) amid price increases in 2022.

Operators are leveraging these forecasts to estimate key cost changes, forecast spend, and use industry data to optimise costs in 2021.

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Whitepaper: Impact of Global Shortages on the Energy and Natural Resources Industry

July 29, 2021 at 9:00 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

In the first post of our multi-part series, we discussed the market forces driving today's inflationary environment for energy and natural resources firms. Now, we dive deeper into one of the consequences of those market forces: longer equipment lead times. PowerAdvocate recently conducted a survey of dozens of top suppliers in the energy industry and found an average 50% increase in lead times for critical electrical infrastructure equipment since January of 2021. 

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Impact of Global Shortages on the Energy and Natural Resources Industries

July 28, 2021 at 10:31 AM / by Wood Mackenzie Supply Chain posted in Industry Insights, Power & Utilities

As global economies recover from the economic downturn, a combination of market forces is creating an inflationary cost environment for energy and natural resources firms. Severe shortages for key commodities, materials, and labor have businesses scrambling to mitigate the operational downsides, including longer lead times for critical equipment. 

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