Tearing down

There's a saying that it's easier to tear down than to build up. Think of an old ballpark that took years - and millions of dollars - to build. You can see videos of them being blown up in seconds, and bulldozed in weeks.

In the power industry things are even more difficult. There is an array of opponents with a goal to shut down power plants, and to stop new ones being built. This means that it takes years and millions of dollars just to get permission to build. It also sometimes costs a lot of money just to fend off people trying to get your plant shut down.

All this makes it even more important to plan ahead. Not just the next quarter, or the next year, or any time frame for the investment community to consider. You need to think decades ahead, and to have projections of a wide range of possibilities. For example, imagine a plant with a decade of planned life remaining. First, calculate all the factors that will go into the cost of that plant, and all the profit that will come out of it. Now imagine that in one year an environmental group will target that plant. What does that do to future costs, and all your projections? Just the legal costs of a successful defense of the plant could turn it from a profitable end-of-life to a negative one.

Is there a way to plan for the unknown? Well, that gets you into risk analysis, but examining other locations will give you some historical similarity to compare. The problem is that everyone is different, and everyone wants to think they will be special. The trick is to avoid that kind of thinking, and to be as realistic as possible.

First, plan for every eventuality, and keep those plans up-to-date. Make sure that if something happens, you can quickly switch plans without having them disrupt business too much.

Second, market those plans. Get out in your community. Be a good neighbor. Convince locals of your worth, and you might have a friend in an unforeseen fight.

Third, market to the wider industry. Write white papers. Bring in contractors. Push your plant to be the best, while making sure you're staying on your target. No point saving an old plant if it's going to shut down anyway.

For the marketers out there, ensuring that others know your value is the first step in getting a sale. For others, ensuring that people know your value may be the difference between a plant's life and being on the short end of a demolition charge.