SUSTAINABILITY

Success Story

SUSTAINABILITY

A company had developed a technology to convert coal into power that was both environmentally friendly and sustainable. They decided to initiate a project to investigate the feasibility and value of establishing a business to commercialize this proprietary technology.

Decision Strategies, a strategic consulting company in Houston, was invited to be a part of the investigative team and to lead the initiative using our Integrated Decision Managementâ„¢ approach.

What We Did

  • Led the discovery and framing stages to understand the challenges, issues, decision criteria, and business environment
  • Helped assess all the uncertainties the client was facing including environmental legislation, technology, competition, long-range pricing, and third-party research

How We Did It

  • Established the objectives and facilitated team agreement and buy-in
  • Framed the issues and identified potential strategic alternatives
  • Managed a third-party market forecast consultant to assess the potential value for multi-generation plants
  • Gained agreement upon a path forward based on the entire process and resulting findings

The Challenge

Entering this space, which was new to the organization, presented many challenges, not the least of which was that there were many alternative methods in the market for converting coal to clean energy. In addition, although typical in competitive business, the reaction from the existing market players to a new entrant was uncertain. Furthermore, market drivers were unclear, and the resources that the organization had available to them were largely part-time and were geographically dispersed across the globe. This brought additional challenges to the planning, coordination, and communications processes.

Technology and Legislation

Another key uncertainty was in the fact that environmental legislation was continually evolving and there was no clear indication as to which direction it would take. This had an impact on the technology because uncertainty existed as to where innovation would lead.

The Solution

Once the team had completed the framing process to clarify objectives, identify strategic options, and agree on the best alternatives for the objectives, they used a third-party consultant to assess the potential values of first-, second-, and third-generation plants. Included in this was forecast technology improvement for both coal to power, and coal to power with poly-gen. The studies revealed that if the client was to realize expected returns in a third-generation plant, then the returns for the first- and second-generation plants would be significantly lower than the acceptable hurdle rate.

Process Insights

During the process of assessing alternatives, options that at first seemed to be intuitively better instead proved to have limited economic benefits. Throughout the process, the ability to decrease costs and increase performance through technology innovation rose in importance.

Team Conclusions

Based on all the findings, the working team came up with the ideal solution. First, it included developing a technologically advanced plant that gave them the performance of a third-generation plant. Next, they developed a strategy for implementing a commercially successful first-generation plant. Lastly, they used resources available from a standard plant to leverage their resources and knowledge to arrive at the optimum solution and technology.



TESTIMONIAL

Decision Strategies brought an objective and independent viewpoint to the table as we worked through complex situations.

CEO Sustainable Energy Company