Importance of Having a Utilities Strategy

We often refer to utilities as being the umbilical cord to the magnificent buildings and infrastructure around us. Any development would be a lifeless unusable shell without adequate utility provision, capacity, and connectivity.

Yet utilities are often overlooked by organisations who seem unaware of the opportunities within a deregulated marketplace that can generate a real competitive advantage on a project and whole lifecycle benefits that include CAPEX efficiencies that can be in excess of 80% and significant OPEX benefits to the landlord and consumer.

With power costs and availability increasingly becoming a key focus for the construction industry alongside sustainability and decarbonisation, can companies afford not to have a utilities strategy?

One size does not fit all

Building development is, to an extent, relatively linear. A structure and its integral components can be developed to plan using a general arrangement and service diagrams. The resulting design can be priced and procured with very little variation other than economic influences. However, the approach to procuring and delivering utilities differs considerably. For example, there could be a need for two entirely different utilities strategies for two identical buildings in two different geographical areas. This example emphasises the importance of a bespoke and cohesive strategy for each project.

Infrastructure availability can make or break a development

The location of a development is dependent on land availability/suitability, planning and of course the availability of utility services. In some instances, the feasibility of a project will be dependent on the utility infrastructure available to service a site. This is especially true for technology, industrial or manufacturing facilities where connections into high-capacity power and water networks are required. Another example being data centres, where power and telecommunication infrastructure availability and resilience is critical to the operation of the facility. However, service and supply can also impact smaller developments such as residential, retail, and commercial facilities in areas of high demand such as towns and cities, and in rural areas where network capacity is limited. In these instances, it is necessary to develop appropriate strategies in areas where the availability of utility connections are limited or demand is high, to minimise offsite infrastructure and identify true availability on the networks. This may result in a need to rationalise designs and use technology and innovation to reduce project costs and risks.

Dealing with dynamic

Utility networks evolve and develop as does the demand put on them. We can therefore deem these networks to be dynamic in nature with no two sites ever being the same, even if upon inspection networks appear similar in capability. When considering a development during the master planning or feasibility stages of a project, the focus is not just on how the development will be served but also the land legacy and any residual utility infrastructure residing within the redline development area. This infrastructure is generally considered by the project team as being a site constraint and a risk, that will often require disconnection, diversion or where highway boundaries alter, stopping up. With the right utility strategy in place, perceived project risks can often deliver opportunity.

To create the greatest impact on a project, the utilities strategy must be considered as a whole lifecycle process that factors in existing utility constraints, temporary construction requirements and the demands of an ‘in use’ operational facility. To maximise the opportunities available on each project it is important that utilities strategies are developed during the preparation and briefing stages and refined through RIBA plan of works stage 2 and 3. However it is also possible to develop ‘value add’ opportunities in the later procurement and delivery stages of a project.

Missed opportunities

We often talk about the ‘missed opportunities’.  These arise in the absence of a cohesive utilities strategy, where utilities are not considered until the later RIBA plan of work design stages or where a client developer procures the packages using a traditional approach . The latter can often be referred to as linear utility procurement and this type of procurement offers little in the way of benefit to the client, the project, landlord or future tenants.

Put simply, a major failing of procured utility packages is the absence of choice to the client. A dynamic strategy will not only provide the client and project team with options but will develop contingency to meet the demands of a developing design.

Other indicators that a utility procurement and delivery strategy is not working hard enough for a project include costs estimates and costs plans that comprise £/m² pricing or cost assumptions benchmarked on previous projects, pure outlay to the client and an absence of value management opportunities and control through the delivery stages.  A hard working utilities strategy should deliver CAPEX savings  or below the line rebate revenues, whilst providing landlord and consumer with whole life cycle OPEX efficiencies,

A cohesive utility strategy is a critical requirement for unlocking potential cost opportunities and mitigating risk on a project. It also addresses key issues relating to corporate and social responsibility, providing clients with a true competitive advantage in the marketplace. Currently many organisations are unaware of the flexibility that results from operating within a deregulated market place. Cost efficiencies which can be as high as 80% can be achieved with the right solution. Realising that unique strategy on a scheme can sometimes be the determining factor as to its viability.

Written by Rees Westley who is Head of Utilities at Business Critical Solutions the specialist services provider to the digital infrastructure industry.

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