Keeping the power on: What decades of loss data reveal about resilience
Power generation is entering a new era. AI and data centers. Transportation and electrification. Renewable energy. And according to the International Energy Agency's (IEA) Electricity 2026 report, global electricity demand is forecast to grow 3.6% annually from 2026 through 2030. Together, they're adding complexity and stress to power generation systems worldwide.
Generating reliable electricity in this environment requires extraordinary precision. With equipment operating at extreme speeds and temperatures, operators have limited time to recognize and respond before an event escalates.
At a time when there's so little margin for error, the ability to anticipate and prevent failures has become a defining advantage for power generation organizations.
Helping them meet these challenges is the focus of FM's latest report, Understanding Power Generation: Loss Trends and Predictive Analytics. Drawing on more than 70 years of engineering expertise, research and loss history, the report examines where losses occur, why they happen and what organizations can do to strengthen resilience.
Here are some of the report's most significant takeaways:
The greatest threats are often inside the plant
When most people think about power generation risk, natural hazards like hurricanes, floods and severe weather may come to mind. Yet FM's research revealed a surprising reality: some of the greatest risks facing power generation assets stem from entirely different causes.
Mechanical and electrical breakdowns account for more than 70% of all losses in the power generation sector and more than 80% of their annual financial impact. Gas turbine failures are the single largest source of property damage, while gas turbines and transformers are major drivers of business interruption.
"What really jumped out was how large the bucket of losses associated with mechanical and electrical breakdown actually was,” said Brian Palmer, principal engineer for power generation, who helped develop the report and recently discussed it on FM’s Sound Policy podcast.
The report explores the factors driving these losses. Missing or malfunctioning safety devices, inadequate operating procedures, equipment design vulnerabilities and a lack of contingency planning can turn a routine equipment failure into a costly disruption.
The analysis found that many incidents ultimately classified as fire losses actually begin with a mechanical or electrical failure that quickly escalates.
"A mechanical breakdown affects the lube oil. The lube oil catches fire. Now you've got a bigger event that's even more difficult to control,” Palmer explained.
Together, these findings point to clear opportunities. Investing in equipment reliability while strengthening engineering controls and operational practices can help reduce both property damage and business interruption.
Better information is changing how risk is managed
Greater operational complexity has brought with it greater visibility. Power generation organizations now have access to more operational data than ever before. Turning that information into actionable insight is becoming increasingly central to resilience.
FM's report highlights how engineering expertise, predictive analytics and real-world operational insight work together to identify emerging risks earlier and prioritize the most effective mitigation.
Each year, FM engineers conduct more than 1,900 site visits to power generation facilities worldwide, combining field observations with decades of loss history, research and emerging AI applications. This approach helps organizations focus resources where they can have the greatest impact. In fact, FM's analysis found that more than a quarter of client losses originated from just 2% of locations previously identified as having the highest loss potential, highlighting the value of identifying and prioritizing risk.
The report also stresses the importance of operator preparedness. As facilities become more digital and experienced workers retire, FM offers scenario-based training that places operators in realistic situations based on actual industry losses. Participants learn how to recognize hidden weaknesses and quickly respond to abnormal operating conditions. By working through these scenarios, teams gain confidence in anticipating incidents and managing them effectively.
Recovery has become one of the industry's biggest challenges
As investments in AI infrastructure, electrification and new generating capacity have accelerated, the global supply chain is showing strain. Organizations are increasingly competing for the same turbines, transformers and other critical equipment needed for both grid expansion and recovery from equipment failures. Coupled with shortages of specialized materials, manufacturing capacity and skilled workers, replacement timelines have lengthened dramatically.
Palmer noted that transformers can now take two to four years to secure, while replacement times for gas turbines have grown from about a year to three to five years.
This new reality requires organizations to rethink how they prepare for recovery. Increasingly, the true cost of many losses may be driven by both the damage itself and the prolonged time required to restore operations.
Resilience helps you stay ahead of risk
Keeping electricity flowing reliably has never been more essential.
The report outlines practical, proactive steps organizations can take to help strengthen resilience and reduce costly disruptions:
- Prioritize equipment inspection, testing and preventive maintenance.
- Verify that safety devices and protection systems are properly designed and maintained.
- Use predictive analytics to identify vulnerabilities.
- Develop contingency plans for critical equipment with long replacement lead times.
- Evaluate changes to equipment, operating procedures and plant conditions.
- Invest in operator training and scenario-based exercises.
- Strengthen hot work management to reduce fire risk.
As Palmer confirmed, "The goal is to avoid unexpected downtime."
Learn more by reading the full report, Understanding Power Generation: Loss Trends and Predictive Analytics, on FM’s website.