From legacy assets to future readiness: Supporting a major power provider’s energy transition
At a glance
For over a decade, GHD has partnered with a major power utility to bring clarity, consistency and confidence to the closure planning of its thermal generating stations. Through robust, repeatable methodology, we’ve helped them better understand future closure liabilities, manage environmental and regulatory risk and make informed decisions as its energy portfolio evolves.
The challenge
As their thermal generating fleet aged, the need to understand long-term closure liabilities became increasingly important. Historically, closure costs were estimated using a mix of internal assessments and contractor demolition quotes. While workable in theory, this approach did not consistently capture the full scope of activities required to safely and compliantly close large, complex industrial facilities.
Earlier closure projects revealed the risks of this fragmented approach. Actual costs exceeded initial estimates, highlighting gaps related to environmental remediation, regulatory approvals, owner’s costs and site rehabilitation. Our client needed a more reliable, defensible way to forecast closure costs that could be applied consistently across its portfolio and updated over time as conditions, regulations and market values changed.
The challenge wasn’t just about cost accuracy. It was about building a methodology that supported environmental responsibility, regulatory compliance and future site value, while giving the client confidence in long-term financial planning for assets ranging from small diesel plants to large-scale thermal facilities.
Our response
Working closely with the power utility, we developed a comprehensive Closure Cost Study and Estimating Methodology designed to reflect the full lifecycle of facility decommissioning. Together, we established a clear framework that considers regulatory obligations, environmental conditions, engineering requirements and commercial realities while carefully considering critical costs that could impact the budget.
The methodology is delivered through three structured phases. The first focuses on regulatory requirements planning, identifying the necessary approvals, permits and third-party obligations that could influence closure scope and timing. The second phase addresses environmental risk, including updated environmental site assessments and hazardous materials inventories to understand potential remediation requirements. The final phase brings these inputs together through detailed closure planning and cost forecasting.
We inspected buildings and infrastructure, reviewed as‑built drawings and used this insight to develop practical decommissioning plans supported by closure schedules, salvage value estimates and risk registers. Importantly, the cost model is designed to be revisited and refined over time, allowing the power utility to update forecasts as demolition approaches and site conditions evolve.
This approach was first applied to one thermal generating station as a pilot and has since been rolled out across the client’s entire thermal portfolio.
The impact
The results speak for themselves. At the pilot site, the closure cost estimate that we developed proved highly accurate projections, with final project costs coming in approximately 20 percent under the allocated budget and with minimal contractor claims, validating the strength of the methodology.
Since then, we have supported closure cost forecasting for their portfolio of thermal generating stations, with regular five-year updates helping our client stay ahead of future liabilities. The program has improved financial certainty, strengthened regulatory readiness and reduced risk across a diverse portfolio of assets.
By combining technical rigour with practical insight, the work supports the utility’s broader transition planning which helps facilities close in a way that is environmentally responsible, economically sound and aligned with long-term energy system change.