A targeted benchmarking and maintenance review helped a regulated Nordic power utility pinpoint process-level inefficiencies, reduce unplanned outages, and clarify where cost reduction was feasible without increasing reliability risk.
Client Background
The client was a large Nordic electric utility operating a mixed portfolio of hydro, wind, and thermal assets. As a regulated operator with long asset lives, cost discipline and reliability were under continuous scrutiny from both regulators and internal boards. The work was triggered by a forthcoming rate review cycle and internal pressure to demonstrate operational efficiency without compromising system reliability.
The Situation on the Ground (Before Engagement):
The utility suspected that maintenance costs were drifting upward but lacked clarity on whether this reflected asset age, harsher operating conditions, or genuine inefficiency. Internal benchmarks varied by business unit, and external comparables were inconsistent. There was no shared view on how far costs could realistically be reduced without increasing outage risk.
The Real Challenge:
The risk was not just higher opex. An aggressive cost-cutting program could have increased unplanned outages, undermined regulatory credibility, and exposed the utility to political and public backlash. The challenge was separating structural constraints from avoidable inefficiencies in a system where “best practice” varies widely by geography and asset mix.
Our Approach:
We ran a targeted benchmarking exercise against a small set of comparable European utilities, rather than broad industry averages. Secondary data was combined with structured discussions with maintenance leads, asset managers, and two independent service providers. Where data conflicted, we focused on process-level comparisons rather than headline cost ratios. The analysis explicitly excluded capital renewal decisions and assumed no change in regulatory service obligations.
Key Insights
- Roughly 12% of maintenance spend variance was process-driven, not asset-driven.
- Planning and condition-monitoring gaps explained more downtime than staffing levels.
- Specialist outsourcing delivered value only for specific asset classes, not system-wide.
- Industry leaders accepted higher planned maintenance to avoid costly forced outages.
Outcome & Impact:
The utility reprioritized maintenance planning, addressed 14 specific process gaps, and piloted partnerships with three specialist providers. Management estimated potential operational savings of up to USD 80 million over several years, with an indicative 18% reduction in unplanned downtime. These figures remain directional and subject to execution.
Why This Work Mattered:
The engagement did not promise certainty, but it replaced vague cost concerns with a clearer map of where intervention was justified and where it was not.
Applicability to Similar Organizations:
Relevant for asset-heavy utilities facing regulatory cost pressure. Less applicable where reliability standards or asset profiles differ materially.