The Evolving State of Power Plant O&M

As power plants confront aging infrastructure, surging demand, and the sweeping changes of rapid electrification, operations and maintenance (O&M) are being redefined to tackle unprecedented challenges and seize new opportunities.

In December 2025, the North American Electric Reliability Corporation (NERC), the region’s designated electric reliability organization, issued a sobering assessment of the power sector’s outlook for the next decade. More than half of North America may be at risk of electricity shortages, it warned. The scenario is exacerbated by the accelerated retirements of 78 GW of aging, fossil-fueled capacity—with an additional 37 GW announced but not yet confirmed—and sluggish progress on new resource additions. Compounding the challenge, power demand is projected to soar by 15% over the next decade, driven by rapid electrification, industrial growth, and the increasing energy needs of the data-driven economy.

In this context, the region’s existing fleet will play an outsized role, underscoring a role for their sound operations and maintenance (O&M). However, NERC also flagged forced outages as a critical and growing concern for the power sector, noting that unplanned outages caused by equipment failures, insufficient maintenance, and resource shortfalls pose significant reliability risks, most prominently during extreme weather events. Without robust O&M practices, these issues could further undermine the grid’s ability to meet rising demand, particularly as winter peaks begin to outpace summer peaks. That has exposed new vulnerabilities in resource adequacy planning, it said.

But as experts told POWER, the realm of O&M is itself rapidly evolving to address new complexities and expectations introduced by the rapid transformation. As IHI Power Solutions Director of Business Development Doug Machon notes, O&M emerged historically as a straightforward business function managed internally by utilities operating within regulated monopolies. The realm began a shift in the 1990s, as competition, introduced by electricity deregulation, ushered in third-party O&M services that offered basic maintenance, compliance support, and operational oversight. Today’s landscape adds a growing involvement from private equity investors, a decline in long-term power purchase agreements, and the rise of diversified energy portfolios—including renewables, distributed energy resources (DERs), and hybrid configurations.

No longer limited to routine tasks, modern O&M necessitates “a higher level of expertise and innovation in plant operations,” says Machon. The significant shift has catalyzed “the development of comprehensive O&M strategies designed to maximize efficiency, reliability, and profitability in an ever-changing energy landscape.” Providers today are expected to integrate advanced technologies, foster flexible plant cultures, and navigate stringent regulatory landscapes, he notes. Essentially, O&M today functions both as a critical lever for optimizing performance and enabling grid reliability in an increasingly dynamic energy environment, but it must also simultaneously mitigate risks and seize opportunities, he says.

Tackling New O&M Challenges

According to Ricardo Guerrero, general manager for Global O&M at GE Vernova, O&M advancement varies by region. “It’s different in every part of the world, but I would say the main factor that is affecting O&M services at this moment is the penetration of renewables,” he says. Plunging costs for renewables have ushered in new operational demands for traditional thermal power plants, including combined cycle gas turbine (CCGT) power plants, which were historically designed as baseload workhorses. “Cycling is a big issue,” Guerrero acknowledges. “Cycling is associated with how you are going to react, how you are going to accommodate your team, how you are going to accommodate your strategy, your planning—everything associated to O&M services—to be really productive, take care of cost, and be efficient.”

Cost pressures amid inflation and market demand further compound these challenges. Power sector O&M costs typically fall into fixed costs and variable costs. Fixed costs cover consistent expenses like routine maintenance, staff salaries, and long-term equipment contracts, while variable costs fluctuate based on fuel prices, material needs, and unexpected repairs. Over the past five years, cost fluctuations have hinged emphatically on rising material costs for critical resources such as steel, copper, and silicon, with particular implications for aging thermal power plants that require frequent and costly repairs.

Renewable O&M costs, while generally lower than those of thermal power plants, have been steadily decreasing due to technological advances, economies of scale, and experience-driven efficiencies. However, they remain sensitive to material price volatility and the growing demand for specialized maintenance services. Offshore wind, in particular, faces higher O&M costs compared to onshore wind, driven by logistical challenges, harsher environmental conditions, and the need for specialized vessels and remote monitoring systems. Meanwhile, costs for advanced technologies such as biomass and small modular reactors remain comparatively high. A cost and performance analysis conducted by engineering firm Sargent & Lundy compared 19 different technologies based on their capital and O&M costs (Table 1). Even as these emerging technologies promise operational efficiencies and decarbonization benefits over time, their high upfront investments and significant ongoing O&M expenses can pose serious feasibility challenges.

Enduring the Vast Realm of Policy and Regulatory Uncertainties

Still, the current power landscape is compelling more companies to adopt new technologies and approaches. A significant factor has been compliance with the evolving patchwork of government mandates, including regulations and incentives increasingly focused on accelerated decarbonization. The U.S. Environmental Protection Agency’s (EPA’s) April 2025–finalized Carbon Pollution Standards mandate carbon capture and sequestration (CCS) for existing coal units and new baseload combustion turbines, adding to rules regulating nitrogen oxides, mercury, effluent, and coal ash. Regional decarbonization differences and overlapping state-level policies are, meanwhile, creating additional complexity, driving operators to adopt tailored strategies to meet diverse compliance requirements.

Beyond emissions, regulations now also emphasize grid stability and reliability, compelling conventional generators to provide ancillary services such as fast frequency response and inertia. The need for resilience has also generally spurred mandates that require plants to bolster infrastructure to withstand extreme heat and cold events, floods, and droughts. Cybersecurity is another growing focus, with federal directives requiring power plants to implement stricter digital protections and incident reporting protocols.

“You must adapt to the market. If you don’t react, if you don’t change, if you don’t adjust yourself to the new conditions, you’re going to disappear,” notes GE Vernova’s Guerrero. GE Vernova’s approach has been to prepare customers for these transitions, including tailored maintenance strategies. “We take into account the specific operational stresses caused by renewables integration, ensuring that even older assets comply with regulatory thresholds while optimizing performance,” he explains.

Siemens Energy, a global provider of power technology, solutions, and services, shares a similar outlook. “Our O&M service is designed to manage and maintain various types of technology infrastructure or equipment. This approach is especially beneficial in diverse and complex operational settings such as carbon capture, where multiple types of technology coexist,” says Andrew Robson, Siemens Energy’s technical expert for O&M Solutions.

“In the next decade, Siemens Energy will continue to offer expert O&M services to manage customer reliability risks, enhance efficiency, and centralize skills for consistent and reliable service supported by data-driven digital technologies,” Robson adds. While the need to decarbonize conventional power generation affects all utilities and is not specific to O&M, the company’s services “ensure that these technologies operate reliably and efficiently, contributing directly to meeting decarbonization goals,” he explains. Additionally, he underscores broader sustainability benefits, particularly through the use of a global network of remote operations and control centers. “Especially during COVID, it became clear that it is not always necessary to fly specialists around the world, but that a lot can be done remotely,” he says (see sidebar “Best Practices for Maintenance in the Evolving Power World”).

Solving the Workforce Puzzle

For now, experts agree the most urgent challenge facing the power sector is the shortage of skilled personnel. “O&M is all about people,” says Guerrero. “People tend to believe that in the future, power plants will be operated completely by robots, but we are really far away from that.” A key issue is that the workforce, traditionally the backbone of power plant operations, is aging, and with that comes the loss of decades of invaluable experience. “At the same time, we’re finding it increasingly difficult to attract younger talent, who are often drawn to tech-savvy industries like software and artificial intelligence [AI] rather than traditional fields like ours. It’s a problem we cannot afford to ignore because, without skilled workers, even the most advanced plants won’t function,” he says. To address these challenges, Guerrero explains that GE Vernova has developed structured knowledge-capture systems, including detailed playbooks created during contract mobilizations. “These are comprehensive guides that ensure when experienced team members retire or move on, their expertise doesn’t leave with them,” he says.

At the same time, GE Vernova, driven by its “lean” business philosophy, has already begun transitioning from traditional reliability-based maintenance approaches to more proactive, data-driven design-making enabled by AI and analytics. Guerrero said the company has developed autonomous robot technology capable of conducting inspections and identifying issues that human workers may miss. Demonstrating these technologies carries operational benefits, but a key intent is to transform the perception of O&M, positioning it as innovative, future-focused, and dynamic—attributes that could be attractive to a younger workforce, he says.

1. Completed in early 2025, the Leipheim Power Plant in Bavaria, Germany, is a cutting-edge gas turbine facility developed by Siemens Energy and German energy giant LEAG to bolster grid stability during renewable energy shortfalls. The plant, capable of ramping up remotely within 30 minutes to deliver 300 MW of power, is operated entirely from Siemens Energy’s ISO-certified Remote O&M Support Center in Erlangen. Courtesy: Stefan Hobmaier/Siemens Energy

Robson echoes Guerrero’s concerns. “Even utilities with extensive experience in power plant operation and maintenance are now seeking our O&M expertise due to the skilled workforce shortage,” he notes. Siemens Energy’s approach has been to double down on technology. “Remote services are key to maintaining reliable operation and efficient maintenance,” says Robson, citing Siemens Energy’s 72-hour unmanned operation of the 300-MW Leipheim Power Plant in Germany (Figure 1). “Our remote monitoring centers handle routine monitoring and data analysis, freeing up experts for tasks that cannot yet be fully automated.”

According to Emily Obenauer, global director of Product Marketing at SiteTracker—a software-as-a-service platform that provides end-to-end asset lifecycle management—emerging tools are also set to play a transformative role in streamlining O&M operations with tangible workforce benefits. “Tools like ours are also shown to increase the satisfaction and increase the effectiveness of those workers out in the field because we’re getting so clear on what needs to be done and validating that that work has been done correctly the first time around,” she said.

Shoring Up Supply Chains

While workforce challenges have long afflicted the sector, more recent global supply disruptions are posing new concerns, prompting companies to reassess the resilience of their O&M operations. Siemens Energy’s Robson notes that, while temporary bottlenecks for parts and consumables remain a concern, “The shortage of people is, so to speak, the biggest bottleneck in the supply chain,” he says. He explains that most original equipment manufacturers (OEMs) proactively approach supply chain challenges to mitigate risks, leveraging global networks for flexibility. “We can access stock that was originally planned for other projects in the longer term. Additionally, close monitoring allows for the identification of required parts at an early stage as part of predictive maintenance,” he says.

2. To bolster its supply chain and prepare for increasing demand for its heavy-duty gas turbines and upgrades globally, GE Vernova moved in November 2025 to acquire Woodward Inc.’s combustion parts business in Greenville, South Carolina. This image shows a 7HA.03 gas turbine at GE Vernova’s own facility in Greenville, where it manufactures and tests gas turbines to provide global engineering support and other activities. Courtesy: GE Vernova

GE Vernova’s strategy is similar, entailing a proactive, collaborative approach with its customers (Figure 2). The company closely monitors its customers’ equipment and provides advance warning of potential failures. In addition, Guerrero says it helps customers pre-position critical spare parts to minimize downtime in the event of an issue. For example, when GE Vernova identified that the generators at a 20-year-old power plant in Taiwan were nearing the end of their life, it advised the customer to purchase a spare stator and rotor in advance. Two years later, the rotor failed, but because the spare part was already on-site, GE Vernova was able to quickly replace the rotor, getting the customer back online in just seven days, he says.

The Rise of Third-Party O&M Services

In another important trend, given modern complexities and evolving risks in the power sector, many utilities and power companies are increasingly turning to value-driven partnerships, often through third-party O&M service contracts. These partnerships encompass project management, robust training programs, detailed plant assessments, and the adoption of tailored best practices to optimize operations. Many are designed to leverage economies of scale and advanced remote operations, providing utilities with cost efficiencies and enhanced reliability in managing diverse energy assets.

“For many plant owners, O&M is no longer a core focus,” Guerrero explains. “Their priority is on generating and selling energy, which opens the door for third-party providers like us to step in with specialized expertise. But it’s not just about taking over operations—it’s about adding value. By leveraging performance-based contracts and advanced technologies, we focus on aligning our services with plant owners’ goals for reliability, efficiency, and profitability.” Guerrero notes that performance-based contracts are increasingly becoming a defining feature of third-party O&M services because they play a pivotal role in aligning incentives with plant reliability, availability, and efficiency. The contracts ensure accountability by incorporating measurable metrics, such as performance guarantees, and often include penalties for underperformance as well as rewards for exceeding targets. “This model ensures that everyone is focused on the same goal: maximizing the plant’s performance,” he says.

Global renewable energy developer Invenergy— a company known for its extensive portfolio of wind, solar, and storage projects—also highlighted the value proposition. The company says it approaches O&M services with an “owner’s mindset,” a philosophy that ensures top-tier maintenance practices and builds trust within their communities. “In addition to prioritizing safety, Invenergy Services’ other O&M pillars deliver benefits to customers through innovation, flexibility, and cost savings,” it says.

O&M’s Future: Tech and Sustainability

According to experts, the future of O&M in the power sector will be shaped by two transformative forces: technological innovation and the global push for sustainability. Already, as power generation grows more complex, modern O&M practices are increasingly integrating cutting-edge technologies like predictive analytics, autonomous systems, and maintenance strategies. “The future of operations and maintenance will heavily depend on integrating AI with digital tools to analyze data in real-time. This allows us to predict issues before they occur, saving costs and improving asset performance across the board,” says Guerrero.

Obenauer echoes this point. “We know that the future lies in digital transformation, and AI is a major focus. By applying AI to fieldwork and O&M processes, we’re already testing how to enhance efficiency and reliability while aligning with the workforce and industry needs.” AI-driven solutions also promise to unlock new opportunities in lifecycle management, she notes. “By centralizing asset data, companies can use AI to optimize resource allocation and focus on long-term asset health while navigating complex operational challenges.”

3. Operational since June 2023, the Kela PV Plant Phase 1, located in Sichuan Province, China, stands as one of the world’s largest hydro-solar hybrid power plants, combining 1 GW of solar capacity with the 3 GW Lianghekou Hydropower Plant. The site exemplifies advanced O&M practices in a challenging environment. Given that it is situated at an altitude of 4,600 meters, the plant endures extreme cold and high winds. Using a smart O&M platform with features like remote monitoring, automated fault detection, and real-time diagnostics, the plant minimizes manual intervention and ensures reliability. Courtesy: Huawei

On the other hand, sustainability will support the general charge toward cleaner energy sources, such as accommodating new technologies and hybrid configurations (Figure 3). Companies are exploring how to integrate emerging solutions such as hydrogen retrofits, thermal energy storage, and batteries into power plants, all while keeping costs low, maintaining reliability, and minimizing environmental impact.

As Guerrero stresses, a key takeaway is that O&M will need to be flexible and responsive rather than rigid. “You can navigate the sea as a cruise ship, or you can be a motorbike on the beach moving quick, and that’s the idea, that’s what we are doing,” he explains. Ultimately, proactivity will be necessary for nimble adaptation to keep pace with the changing landscape, he says.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).

Correction (Feb. 18, 2025): This article previously misstated that the Sargent & Lundy analysis examined hydrogen retrofits. A clarification in this version refines the discussion of cost comparisons for advanced technologies. The Table 1 citation has also been updated to January 2024 instead of 2025, as previously cited.