Energy

The energy industry is undergoing a profound shift. The push for sustainable and green energy solutions is not just increasing—it's becoming an urgent necessity. Procurement is key to speeding up this transition, making it an essential driver of the energy sector's transformation.

Procurement Drives Success

Optimizing Investment Costs

Achieving CO2 reduction demands transformative investments. We focus on cost optimization and fortifying energy supply chains to ensure capital efficiency in decarbonization initiatives.

Supply Chain Risk & Resilience

Effective supply chain risk management is essential for navigating the energy transition. We enhance resilience and flexibility with strategic procurement approaches.

Capability Development

We design customized training programs to tackle talent shortages, boosting procurement efficiency and driving sustainable procurement transformation.

KGM Strategy’s CAPEX Procurement in Energy report

Procurement leaders are at the forefront of the energy transition, driving the shift toward sustainable energy production while managing the challenges of rising costs, supply chain disruptions, and the implementation of innovative technologies. The KGM Strategy Energy CAPEX report provides valuable insights into how strategic procurement can address these challenges across major energy sectors such as renewables, hydrocarbons, and energy networks.

Learn how strategic procurement addresses critical energy challenges, from achieving ESG objectives to strengthening supply chain resilience through the use of Long-Term Agreements (LTAs). Discover insights into sector-specific strategies and future trends in costs and lead times.

The mindset shift and future fit procurement practices

Meeting the challenges of the energy transition requires a mindset shift to ensure that procurement is strategically positioned as a key driver within your organization. Procurement is a critical strategic function that must be integrated during the earliest stages of a cross-functional capital project and associated portfolio planning processes. It drives efficiency and resilience in supply chains, maximizing project deliverability and mitigating risks by serving as your organization’s direct interface with the supply market.

By adopting a proactive and strategic approach to

procurement, building long-term supplier partnerships, and prioritizing transparency in supplier and market developments, organizations can foster innovation, achieve cost efficiencies, and ensure a more agile and sustainable response to evolving market dynamics that impact their CAPEX portfolio.

Project lifecycle: End-to-end CAPEX procurement support

Shaping the future of energy procurement

The energy sector is undergoing a rapid transformation driven by the urgent need to decarbonize power generation and electrify industries like transportation and heating. This transition demands large-scale CAPEX investments, positioning procurement as a critical enabler of cost optimization, operational efficiency, and innovation.

KGM Strategy partners with energy companies to strategically manage these investments, optimize costs, and secure supply chain resilience. As the industry navigates complex regulatory frameworks and market volatility, our expertise enables

companies to mitigate risks, achieve ESG compliance, and integrate sustainability into their procurement and supply chain strategies.

Procurement has evolved into a strategic function, driving innovation, building resilient supply chains, and optimizing CAPEX investments. We empower companies to address the challenges of the energy transition while driving long-term growth and success.

The energy industry’s key challenges

Hydrocarbon extraction & refining

The hydrocarbon sector is under pressure to adapt to rapidly changing market demands, stringent regulatory pressures, and evolving energy standards. Companies face the complex task of maintaining traditional energy production while preparing for future needs — balancing operational flexibility, regulatory compliance, and sustainability goals. Aging infrastructure, from pipelines to refineries, presents additional financial, operational, and logistical hurdles. Strategic procurement supports these efforts by sourcing innovative solutions, managing specialized supplier networks, and ensuring compliance with evolving energy standards, helping companies stay resilient, competitive, and future-ready.

Renewables

As the renewables sector rapidly expands to meet global decarbonization targets, it faces significant challenges in maintaining reliable energy flow, economic stability, and scalable operations. Intermittent power generation from novel sources like wind energy and solar require advanced energy storage and modernized grid infrastructure, while reliable backup sources, such as hydropower or natural gas, are needed to bridge gaps during low-output periods. Additionally, evolving policy frameworks, dynamic regulatory changes, and shifting market conditions add complexity, impacting project timelines, budgets, and delivery. Strategic procurement supports this balance by securing scalable storage technologies, fostering resilient supplier partnerships, and navigating compliance and ESG requirements. Procurement ensures renewable projects remain resilient, efficient and adaptable to future demands.

Energy networks and transition

As renewable energy sources grow and demand for electricity continues to rise, transmission and distribution networks are under mounting pressure to expand capacity and modernize infrastructure. Grid operators must integrate renewable energy sources and decentralized power generation, which requires advanced grid balancing mechanisms to maintain stability and efficiency across the grid. Additionally, rapid advancements in grid automation technologies and energy storage solutions introduce supply chain complexities, as many new technologies lack full industrial scalability. Strategic procurement plays a vital role in sourcing smart grid technologies, securing reliable control systems, and mitigating supply chain risks to ensure that grid infrastructure upgrades are both resilient and adaptable to future energy demands.

For a deeper dive into how procurement can address these challenges and drive success, explore our insights article on meeting the energy industry’s challenges with strategic procurement. Learn more