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The hidden risk to North America’s energy infrastructure boom

Published by , Editorial Assistant
World Pipelines,

The transition to clean energy and the associated rise in demand for gas and renewable energy infrastructure represents a double-edged sword for North America’s construction industry. New waves of development for the region have seen it lead the world on LNG projects and spending on new pipelines, while recent legislation will unlock over US$500 billion of investment in renewables and climate change technology. Yet new energy projects will also involve unprecedented complexity and collaboration across previously separate industries, from gas and wind to batteries and power, posing a challenge for a fragmented construction industry characterised by data silos.

The walled gardens of construction

Renewable energy projects such as offshore wind-to-hydrogen will involve integrating construction data across partners from industries as diverse as offshore gas, solar, wind, batteries, and power. Even the initial FEED is growing more complex, and increasingly involves sharing thousands of equipment datasheets, equipment lists and calculation sheets across multiple teams often working remotely.

Yet traditional project delivery models such as design-bid-build encourage silos between stages such as design and construction, and stakeholders such as suppliers, contractors, and owners. This could impede traceability and transparency across increasingly collaborative, complex new energy projects. Project delivery models growing in popularity such as integrated project delivery methods (IPD) will necessitate centralised, standardised data to enable common oversight of project progress among all stakeholders.

Currently, vital capital project documentation is often hidden within a series of ‘walled gardens’ instead of being held in a single universally accessible and auditable space. This disparate approach to construction is already severely impeding project delivery. A recent survey by InEight found North America has more projects running late or over budget than any region. Inefficiencies linked to non-standardised systems, processes and communication barriers with stakeholders were among the chief causes.

The fundamental problem is that the construction industry remains mired in traditional stand alone systems and processes from paper-based records to in-house or proprietary platforms and point solutions. Some EPCs use outdated home-grown systems from email, Microsoft Excel spreadsheets and rudimentary file store systems to paper-based document management and record keeping. Other contractors use purpose-built point solutions and proprietary documents or asset management tools. Data is often stored on premises by each of the various project partners.

The fragmentation of project documentation in different systems and places is worsened by the raft of mergers and acquisitions among major EPCs, and the increasing need for collaboration across sectors for projects such as renewables. One major EPC noted that its expansion left a proliferating array of incompatible internal document management systems which hampered project setup.

This siloed, splintered data landscape obscures visibility over everything from design changes to equipment specifications among increasingly complex, iterative, and collaborative energy projects. A fragmented data trail impedes traceability and thus accountability over everything from late vendor deliveries to overdue deliverables, concealing causes of project underperformance. Crucially, it creates uncertainty around version control which can mean inaccurate engineering data causing everything from incorrect equipment specs to fundamental design flaws requiring substantial subsequent rework. The challenging policy-driven delivery timetables for infrastructure such as renewables and power grids will only increase the risk of errors.

A forthcoming IDOX EIM report has found that a single unapproved pump design document accidentally submitted to a vendor caused US$780 000 of unforeseen costs and significant project delays. There are also instances where missing documentary records impede transparency over project status, leaving contractors blindsided by risks. Gaps in the paper trail can have a further ripple effect from construction to operations; up-to-date asset information is vital for maintenance and compliance with safety and security regulations across new energy projects.

Joining the data dots

As renewable energy drives the convergence of previously separate industries, this will require a parallel convergence of construction data to ensure this does not come at the expense of traceability and transparency. This will involve a shift from separate stand alone systems towards cloud-based systems designed around collaboration, visibility, and auditability.

Some pioneering energy and utilities construction projects are harnessing digital engineering information management platforms that create a cloud-based single source of truth across complex, cross-sector, multi-party projects. This enables universal transparency and traceability across increasingly collaborative projects and delivery models, and ever more diverse EPC portfolios. Smart dashboards can help all parties visualise and mitigate hidden bottlenecks to project targets from late vendor deliveries to overdue engineering reviews.

These technologies automatically record end-to-end changes from revisions to reviewer comments, and remind those responsible for each deliverable, reducing the risk of critical document errors or delays. The automation of traceability takes human error and inconsistency out of the process, and ensures a trustworthy and up-to-date audit trail while relieving demand on human resources.

Tag-centric search functions allow all engineering documents to be rapidly located so that contractors or owners can quickly see all changes across asset lifecycles and identify the origin of any faults. This also allows project owners to rapidly retrieve and display asset histories for operational maintenance and regulatory compliance. This data can be used to train data analytics systems for predictive maintenance, progressively improving safety over time. Comprehensive and complete audit trails of projects will also produce insights to drive smarter projects and fuel future AI platforms that will predictively optimise project performance over time.

Connected data to unite a fragmented industry

Breaking down silos between disparate disciplines, departments and companies will illuminate and eliminate hidden bottlenecks to project performance. Automating the capture and curation of documentation will further eliminate uncertainty around version control and remove the risk of critical risks creeping into projects. Creating a single source of truth on project data is the key to delivering complex, collaborative projects while minimising costs and risks.


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