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Why energy projects fail in the gaps between disciplines

Why energy projects fail

Adam Butler, Associate at Norton Fulbright South Africa, describes himself as a maritime and energy lawyer who spends half his life putting projects together and the other half suing people when the projects go wrong. Speaking at the second annual Root Cause Analysis Conference held in Stellenbosch earlier this year, he argued that most crises in large energy developments are not purely technical failures. Rather, they emerge in the gaps between disciplines – where the engineers, lawyers, financiers and policymakers do not fully understand one another, or simply do not talk enough, or early enough.

He began his presentation by arguing that timing is one of the main causes of projects being made vulnerable.

Using the Richards Bay liquified natural gas (LNG) project as the perfect example of his statement, Butler explained how the internal Front-End Engineering and Design (FEED) process and prefeasibility work were completed around 2016, with an ambitious target to commission by 2020. However, that date drifted through tendering, appointments, and currently litigation, around the associated gas‑to‑power plant, with final investment decision indications recently pushed out to around 2028.

A Power Purchase Agreement (PPA) is a long-term contract in which a buyer, usually a utility or large corporate, commits to purchasing electricity from a generator at agreed rates over a set period. Butler argued that from a legal or financial perspective, a project’s exposure might be framed simply as the length of that PPA or concession, typically 20‑ or 25‑year. From an engineering and materials point of view, the real exposure is closer to 35 to 40 years when you add the pre‑FID years to the operational life.

He said that this extra decade can change everything from design assumptions, to corrosion allowances, maintenance strategies, and even the question of whether the fuel itself (LNG as a “transition fuel”) will still sit comfortably in the global energy mix by the time the project is mid‑life.

In Butler’s view, effective engineering becomes a form of risk insurance, or risk avoidance. He pointed to designs like the Aurora vessel, initially configured for LNG but with the capacity to transition to ethanol or methanol in future.

While multi‑fuel flexibility may add complexity and cost at the outset, he suggested it is precisely this kind of future‑proofing design and thinking that can prevent energy infrastructure from becoming stranded by technological, regulatory or market shifts.

Who is making the decisions?

Understanding, (or too often, the lack thereof) was the second big risk factor, and the abandoned proposal for small‑scale LNG imports into South African ports was used as an example of how risk is mismanaged when non‑engineering decision‑makers refuse to engage with the technical detail.

Transnet’s discomfort with LNG truck‑to‑shore operations, which Butler said was rooted in limited internal experience and a belief that LNG was somehow more dangerous than LPG, translated not into a rigorous, engineer‑led risk assessment, but into bureaucratic inertia. The audience heard how years were spent on expressions of interest and information requests, while no real feasibility work or licensing progress followed.

For Butler, this was not a story about an inherently risky technology being abandoned through informed choice. It was an example of opportunity lost because technical expertise was neither trusted nor properly integrated into institutional decision‑making.

He argued that effective engineering cannot mitigate risks if engineers are kept at arm’s length and their risk analyses are reduced to annexures that nobody reads.

He contrasted that aborted LNG scheme with a large solar project that did get built, only to become mired in a decade‑long arbitration. Here, the root cause lay in how poorly engineering realities were translated into the contract. Availability and upside payments were governed by multiple conflicting formulas in a sprawling Engineering, Procurement, and Construction Management (EPCM) agreement, drafted by lawyers with only a partial grasp of how plant performance should be measured and how O&M shortfalls ought to be treated.

According to Butler, this was a textbook example of risk that could have been mitigated if engineers and lawyers had communicated and collaborated closely with each other at the beginning of the project.

He believes a clear, technically correct availability definition, agreed with the engineers and baked into the contract may not have prevented every dispute, but it would have narrowed the battleground dramatically. Instead, years of expert evidence and legal fees were spent retro‑engineering clarity into a document that should have reflected the physical realities from day one.

Wrapping up, Butler explained that the best solution for mitigating risk in energy projects came down to four strategies: Early, integrated risk analysis at concept and FEED stage; genuine cross‑disciplinary respect; contracts and financial models rooted in engineering and materials realities; and ongoing, engineering‑led prioritisation in maintenance and operations. Executed properly, he believes this approach will significantly improve the odds that African energy infrastructure will actually deliver on its promises.

About One Eighty Degrees

One Eighty Degrees is a global materials engineering and metallurgy firm. Founded in South Africa in 2002, the company has grown into Africa’s most widely scoped ISO 17025:2017 accredited materials and metallurgical testing laboratory, serving over 1,400 clients worldwide. The company provides advanced metallurgical testing, materials engineering and consulting, and failure investigation services that help organisations solve complex product and process challenges efficiently and cost‑effectively. As a Bureau Veritas Marine and Offshore–approved laboratory, and the only materials testing lab in Africa that is a SASSDA member, One Eighty combines rigorous quality, deep technical expertise and innovative problem-solving to deliver reliable, decision-ready insights across multiple industries. Guided by its vision to become Africa’s preferred partner for materials engineering solutions, the company is committed to driving sustainable growth and development across the continent.

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