Too Hot to Handle? : Performance of large-scale infrastructure projects in a Swedish district heating company

Sammanfattning: Large-scale infrastructure projects are risky ventures, often subjected to poor performance. Time and cost are often escalating beyond estimation while quality and benefits remain unchanged. However, little is known about the project performance in the district heating sector, which serves as basic infrastructure and plays an important role in regional energy transitions. This thesis aims to explore the project performance of large-scale infrastructure projects within the energy sector, particularly the district heating setting to enhance the knowledge of large-scale project performance, and further explore what factors contribute to explaining the performance of large-scale projects within this setting. To fulfil the purpose of this thesis, a multiple case study was conducted in a Swedish district heating setting. A review of relevant literature served as a complement to the primary data retrieved from the cases, laying a theoretical foundation for analysis. The empirical study consists of three parts. The first phase consisted of 18 interviews conducted with people at various positions within the case company to get a holistic picture of the problem and to select the nine cases focused on within this study. The second phase consisted of gathering qualitative and quantitative data on project performance, while the last phase consisted of nine in-depth interviews with the project managers of the nine selected projects. This thesis found a varying project performance, with a mean cost escalation of 12.9 percent and a time increase of 140 days on average. Similar to other studies, large-scale energy infrastructure projects have a tendency to fail rather than succeed when compared to the Iron Triangle criterias, cost, time and quality. Insufficient planning and procurement, weak leadership and ill-performing contractors are significant factors that have a large negative impact on performance. In addition, scope change, environmental context and luck are also shown to impact project performance. Limited evidence on whether political factors have a substantial impact on project performance has been found, in contrast to a large segment within earlier literature. Strong teamwork, both internally within the project team and externally with contracting parties can help neutralise any poor performance caused by any of the above-mentioned factors. The thesis contributes to the literature by discussing large-scale energy infrastructure performance. It is known that large-scale projects are complex and uncertain endeavours and by analysing project performance, knowledge can be enhanced not only on what went wrong but also on what went right. With a global sustainability transition and decarbonisation, energy infrastructure is going to experience large investments in the years to come. With this in mind, developing the most sustainable best practices and prudent project objectives can help project managers to embrace uncertainty and make the right decisions to enhance project performance.