French energy companies face challenges winning bids to build centralized power plants in emerging markets. They must develop a long-term strategic framework, anticipate tenders years in advance, and carefully screen projects for strategic fit. When bidding, companies need to submit technical and financially competitive proposals and negotiate effectively. Developing local relationships and coaching potential customers is important for influencing needs and opportunities. Ongoing feedback and service agreements are also crucial for success over the long term.

1. Going global in the energy markets
How can large French companies
win call for tenders
for centralized power production
in the emerging markets?
Audrey KIST GASPARD
MS SMIB 2012-2014
1

2. Summary  Introduction ……………………..p.4
 Call for tender: how does it work
………………………………………….p.6-11
 Project marketing
& competitive intelligence
…………………………………………p.13-18
 Diagnosis and recommandations
…………………………………………p.20-25
 Conclusion ………………………. p. 27
Audrey KIST GASPARD
MS SMIB 2012-2014
2

3. INTRODUCTION
About the FIFA World Cup and the EPR in Abu Dhabi
Audrey KIST GASPARD
MS SMIB 2012-2014
3

4. How can French companies
win call for tenders for centralized power production
in the emerging markets?
Audrey KIST GASPARD
MS SMIB 2012-2014
4

5. INTERNATIONAL CALL FOR TENDER
Live from the field
Audrey KIST GASPARD
MS SMIB 2012-2014
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6. Setting a strategical framework
 Different approaches depending on companies
– Per horizon
• Long-term (30Y) strategic framework with scenarii
• Middle-term (10Y) business objectives
• Short-term (3Y) action plan with country strategy
– Based on values/ vision
 Need to be reevaluated
– Economic crisis
– Disruptive technologies (e.g. shale gas)
– “black swan” events (e.g. Fukushima Daiichi accident)
– …
Audrey KIST GASPARD
MS SMIB 2012-2014
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7. Anticipating tenders
 Developing local footprint
– Depends on the company history and culture
 Business trips / diplomatic trips
– Economic diplomacy recently structured
changes to be expected?
– Useful to show respect and support
 Using intermediaries
– Special needs, special precautions
The aim is to detect the tenders years before they are
published.
Audrey KIST GASPARD
MS SMIB 2012-2014
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8. Screening projects
 Strategic compliance and risks analysis
– Fit with company’s strategy & values
– Relevant with resources and objectives
 Financial evaluation for power-plant projects :
– Power range that has an impact on scale effect and grid
insertion.
– Efficiency in %.
– Fuel consumption and CO2 emissions, fuel logistics
– Required availability and plant lifespan
– Construction, Engineering, Commissioning costs in €/kW
– Fixed and variable operation costs
... + other non specific parameters (currency, taxation, etc.)
Audrey KIST GASPARD
MS SMIB 2012-2014
8

9. Offer and negotiation
 Prequalification round
– Aims at avoiding too much answers
– Reassures the customer
– Data provided: technical references, financial
soundness, economic empowerment policies
 Tendering
 Clarifications and negotiations
– Technical proposal is opened first
– If technical proposal is OK, then on with financial
proposal: price and charges, financing, debt service
etc.
Audrey KIST GASPARD
MS SMIB 2012-2014
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10. Component Unit
Fixed Payment (Capacity)
Generation Capital Charge EUR/kW-Yr
Transmission Charge EUR/kW-Yr
Fixed O&M Charge EUR/kW-Yr
Firm Fuel Transportation Charge EUR/kW-Yr
Fixed Payment (Unit Start) EUR/unit start
Variable Payment (Energy)
Fuel price EUR/ton
Variable O&M Price EUR/MWh
Example of bid price breakdown
Audrey KIST GASPARD
MS SMIB 2012-2014
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11. Feedback integration
 Technical feedback integrated in standard
specifications
– Feedback meeting with customer
– Lessons-learned report
 LTSA Long-term service agreement
– E-monitoring
– Maintenance
– Inspection
– Spare parts etc.
Audrey KIST GASPARD
MS SMIB 2012-2014
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12. PROJECT MARKETING
AND
COMPETITIVE INTELLIGENCE
The rules of the game
Audrey KIST GASPARD
MS SMIB 2012-2014
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13. Preparing the ground for projects 1/2
 Analyzing the milieu and the customer
– Needs methodology:
• Target definition
• Data collection
• Data processing
– Benefits: define accurate typology of customers,
plan relationships development with customer..
 Screening projects and choosing market
approach
Audrey KIST GASPARD
MS SMIB 2012-2014
13

14. Modes of entry in projects
Main
contractor
sole or
grouped
Sole contractor
sub-project
Grouped
contractor
Supplier
of parts
High Medium Low
Company’s strengths
LowMediumHigh
Projectattractiveness
Supplier
of parts
Supplier
of parts
Sole main
contractor
Sole contractor
sub-project
Main
contractor
sole or
grouped
Audrey KIST GASPARD
MS SMIB 2012-2014
14

15. Preparing the ground for projects 2/2
 Coaching the customer to:
– Shape the tender before it is launched
– Help the customer to identify his need
– Facilitate on-shelf projects
 How?
– Identify his stakes 360°. What are the latent needs?
– Bring awareness (e.g. face-to-face meeting)
 Once aware, the client will be the ambassador of
the solution
Audrey KIST GASPARD
MS SMIB 2012-2014
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16. During tendering
 Formulating the offer
– Technical and financial
– But also: political and social
 Each layer of the offer (core/satellite) gives value to a
stakeholder
 Adapt your communication according to stakeholder
Differentiate on the dimension other competitors forget
 Negotiating the offer
– Classical negotiation approach (see Colson/Lempereur)
– Project/emerging markets: pay special attention to intercultural
notions
Audrey KIST GASPARD
MS SMIB 2012-2014
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17. Communication and information
management
 Influence actions
– Chose obectives: dissuasion, discredit, misinformation
– Methods: Direct approach, press campaign, legal
actioin...
 Data protection
 Counter actions of the competitors
– Local bureau protection
– Local employees
– The basis: avoid unnecessary communication
 Keep it light! No suspicion!
Audrey KIST GASPARD
MS SMIB 2012-2014
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18. Closing the loop
Technology transfer and local content policies
are not necessarily dangerous,
rather the basis for later collaboration
… and anyway they are unavoidable
in emerging markets
Audrey KIST GASPARD
MS SMIB 2012-2014
18

19. DIAGNOSIS
AND RECOMMENDATIONS
What’s wrong and what to do about it
Audrey KIST GASPARD
MS SMIB 2012-2014
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20. Approach
 Case studies:
– Abu Dhabi (nuclear, UAE)
– Temelin (nuclear, Czech Republic)
– Safi (coal, Morocco)
 Interviews
– Alstom Power
– Energies Project Services
– Swield Advisory & Services
Audrey KIST GASPARD
MS SMIB 2012-2014
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21. Diagnosis
Price too high
Lack local
connections
Lack diplomatic
support
Wrong procedure
Inappropriate
product
Image Weak financing
No cooperation
No leadership
Audrey KIST GASPARD
MS SMIB 2012-2014
21

22. Diagnosis
Price too high
Lack local
connections
Lack diplomatic
support
Inappropriate
product
Image Weak financing
No leadership
Wrong procedure
No cooperation
Audrey KIST GASPARD
MS SMIB 2012-2014
22

23. Recommandation 1
Invest in Business Intelligence
• Survey capacities in
order to anticipate
projects and actions.
• Competences and
tools for influence
counter-influence,
lobbying.
• Economic security
and protection
means
What?
• Early detection of
project opportunities.
• Influence the need.
• Fight competition
offensively and
defensively .
• Etc.
Why?
• Using specialized
consulting firms for
specific, sensitive
projects.
• Investing in human
resource by training
or hiring.
• Invest time and
attention in the
customer
relationship
How?
Audrey KIST GASPARD
MS SMIB 2012-2014
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24. Recommandation 2
Promote a culture of listening
• Create or restore
customer attention
• Create a culture of
information
What?
• Perpetuate new
practices such as
business intelligence
• Improve solutions
adequacy
Why?
• Match culture and
strategy.
• Focus on a few shifts
• Honor the strengths
of existing culture.
• Integrate formal and
informal
• Measure and monitor
How?
Audrey KIST GASPARD
MS SMIB 2012-2014
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25. Recommandation 3
Create a cooperation framework
• Reorganization of
the French energy
branch
• Creation of a
cooperation
framework
What?
• Clear allocation of
responsibilities
• Conflicts
transformation
• Creation of industrial
synergies and costs
reductions.
• Better image of
profesionnalism
Why?
• Bring all companies
at the table
• Imagine all
configurations
• Appoint a third party
arbitrator
• Imply the State
• Guarantee the
independence and
freedom of all
companies
How?
Audrey KIST GASPARD
MS SMIB 2012-2014
25

26. CONCLUSION
Audrey KIST GASPARD
MS SMIB 2012-2014
26

27. Going further
 Consolidate:
– Other interviews
– Benchmark: Republic of Korea?
 Decline the action plan for each
recommandation
 Investigate the role of the State as Industry
Strategist
Audrey KIST GASPARD
MS SMIB 2012-2014
27

28. Appendices  Power-plant business stakeholders’
map
 Why emerging markets?
 Emerging markets’ risks
 Local representations of Alstom,
Areva, EDF, GDF-Suez, Total
 Abu Dhabi Case: the power balance
shift
Audrey KIST GASPARD
MS SMIB 2012-2014
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29. Power-plants business stakeholder’s map
Customers
Users
Citizens
Opinion leaders
Associations
Medias
Financial partners
Shareholders
Investors
Economicpartners
Subcontractors
Service providers
Large industrial
partners
Governments
Institutions
Local
communities
Company
Management
Employees
Banks
Insurance
companies
Audrey KIST GASPARD
MS SMIB 2012-2014
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30. Why emerging markets?
-1000 0 1000 2000 3000 4000 5000 6000
China
India
United States
European Union
Japan
Coal
Gas
Nuclear
Renewables
Expected
change in power
generation in
TWh, 2010-2035
(International
Energy Agency,
2012)
Emerging markets are
the future of the world’s electricity demand
Audrey KIST GASPARD
MS SMIB 2012-2014
30

31. Emerging markets – risk analysis
Political
Change of regime impacting
project, nationalization, etc.
Legal
Lack clarity or enforcement,
non compliance
Financial
Weakness of the customer
or State, currency risk,
inflation, return uncertainty
Quality – delay
No quality control, non
optimized processes,
technical issues with existing
interfaces
Audrey KIST GASPARD
MS SMIB 2012-2014
31

32. Emerging countries with a commercial
office, for each company
Africa Americas Asia-
Pacific
Eastern
Europe
Middle-
East
Total number
of countries
Alstom 4 8 8 8 3 31
Areva 2 0 2 3 2 9
EDF 1 0 5 4 2 12
GDF Suez 2 7 1 0 2 12
Total NC NC NC NC NC > 130 all
activities included
Audrey KIST GASPARD
MS SMIB 2012-2014
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33. Abu Dhabi - Power Balance Shift
Unnecessary
technologies
raising costs
1 reactor under
construction in
France, 1 in Finland,
2 in China
Best local
networking via
Total and GDF
Suez
Strongest
diplomatic
relationships
Doubts about
technologies, costs
/delays overruns
No credentials,
“Low-cost price
hare”
Arrogance and
inappropriate
communication
World leaders in
nuclear tech &
operation
Confusion on the
consortium
leadership
Advantages
RelationalpositionFunctional position
Disadvantages
Project timeline
No
commercial
relationship
Inexistant
diplomatic
relationship
Best price, by
far
Military
agreement
including tech
and training
Clear
leadership by
KEPCO
Demonstration
of timely
deliverability
4 reactors under .
construction in
South Korea (no
export)
Audrey KIST GASPARD
MS SMIB 2012-2014
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