CAPEX focus 2024: What matters most in the energy transition

CAPEX procurement is pivotal to the success of large-scale energy projects, enabling the development of infrastructure that supports the energy transition while leading the way to meeting corporate strategic objectives & sustainability goals. These projects often come with unique complexities, requiring tailored strategies to manage their scale, mitigate risks, and ensure successful execution.

Core challenges faced within Energy CAPEX procurement projects 2024:

1. Unique nature of the project
Large CAPEX projects are often bespoke, requiring tailored strategies rather than relying on established approaches and resources suited for business-as-usual operations. Rapid identification of the correct strategy and engagement model with the supply chain is crucial for success.

2. Managing uncertainty and long-term planning horizons
CAPEX projects often start with evolving scopes, creating challenges in aligning project requirements with market supply. An integrated supply-and-demand forecasting methodology is essential to support effective procurement strategies. Employing advanced tools and methodologies to mitigate cost escalation ensures that projects remain resilient and adaptable to changes throughout their lifecycle.

3. Cost assurance and robust financial planning
Cost overruns are common in large-scale projects. By partnering with project teams, procurement contributes to a Total Cost of Ownership (TCO) approach that provides cost certainty and effective risk management throughout the project’s lifecycle. The earlier procurement’s involvement, the greater the impact.

Our study explores questions such as:

How can procurement teams mitigate challenges and risks like long lead times, lack of resources, and cost escalation?
What actions and strategies can CAPEX procurement teams take to ensure project execution aligns with key goals such as cost, quality, and timelines?
What market dynamics do companies with significant CAPEX expect in the next 2–5 years, and how are they preparing to adapt?

Download Inverto’s CAPEX procurement in energy study 2024

CAPEX procurement requires a deep understanding of the unique challenges within large-scale energy projects. Our study, developed by our team of expert procurement consultants, offers actionable recommendations to navigate the complexities of the energy sector and adapt to its shifting landscape.

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