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Getting a Piece of the Renewable Energy Market

February 2010 » Exclusive

Civil engineering firms can benefit from a growing number of wind, geothermal, solar, and alternative fuels projects.

By Theresa M. Casey, FSMPS, CPSM

The 135-MW Pine Tree Wind Facility owned by Los Angeles Department of Water and Power (LADWAP) consists of 90, 1.5-MW turbines. At the time of construction, it was the largest municipally owned wind facility in the United States. David Evans and Associates, Inc. (DEA) partnered with Kiewit Pacific Co. as the design-build team that designed, permitted, and constructed this project in just 18 months. The 8,000-acre site, located in the rugged Sierra Nevada Mountains, required design and construction of nearly 40 miles of access roads. Because the steep grades and sharp turns did not meet the manufacturer’s (General Electric) requirements for transport and installation of turbines, LADWAP included transport and erection of the turbines in the contractor’s scope of work. DEA used software to model the transport vehicles traveling the site to demonstrate and verify that the access road system would accommodate transport of the turbine components. DEA also produced a 3D video to verify feasibility of transporting the project substation.
David Evans and Associates, Inc.

According to the U.S. Energy Information Administration’s (EIA) 2010 Energy outlook, the United States can expect moderate growth in energy consumption, a greater use of renewables, and reduced oil and natural gas imports. Renewable energy refers to wind power; solar energy; geothermal energy; hydropower and ocean power; biomass energy, fuels, and products; and waste-to-energy.

“Our projections show that existing policies that stress energy efficiency and alternative fuels, together with higher energy prices, curb energy consumption growth and shift the energy mix toward renewable fuels,” said EIA Administrator Richard Newell in the forecast. The EIA’s short-term forecast (http://www.eia.gov/emeu/steo/pub/contents.html) calls for natural gas and renewables to account for the majority of capacity additions from 2008 to 2035.

The interest in renewable energy is global. According to the International Renewable Energy Agency (IRENA) website, “Today we are facing huge challenges: global warming, depleting natural resources, population growth, increasing energy demand, rising energy prices, and unequal distribution of energy sources. All of these factors contribute to the urgent need to transform the energy sector, which primarily relies on fossil fuels, to one that uses renewable energies and energy efficient technologies.”

Governments worldwide are mandating the rapid transition to sustainable forms of energy. IRENA found that many renewable energy technologies are now mature and ready for the market. For example, the costs for electricity generation of solar power decreased about 60 percent from 1991 to 2003. The costs for generating wind power declined more than 80 percent from the early 1980s until 2007. Investments in renewable energy more than doubled between 2004 and 2007, and exceeded $100 billion in 2007.

U.S. power and energy market
While there are national associations for nearly every form of renewable energy, the American Council on Renewable Energy (ACORE, www.acore.org), a nonprofit organization headquartered in Washington, D.C., is one of the few national organizations that represents all types of renewable energy industries, associations, utilities, end users, professional service firms, financial institutions, and government agencies. Immediately after the COP15 Climate Change Summit in Copenhagen in December 2009, where world leaders agreed on a goal to limit global warming to no more than 2° Celsius, Michael Eckhart, president of ACORE wrote the following to President Obama:

“ACORE calls on the United States to do three things: make a national commitment to adopting renewable energy to meaningful levels of 25 percent by the year 2025 and more thereafter, increase the level of renewable energy technology investment to 10 times the historical level, and put mechanisms in place to facilitate the flow of $100 billion per year of private-sector capital investment in renewable energy projects in the United States and $500 billion per year globally.”

The American Recovery and Reinvestment Act of 2009 (ARRA), also known as the stimulus package, included about $50 billion in spending and $20 billion in tax provisions related to energy. Spending projects include $11 billion to upgrade the electrical grid, $2 billion for advanced battery technology, and $5 billion for home weatherization. There were $6.3 billion in grants to states and towns for energy programs. Energy research received $8.8 billion, including $800 million for clean coal, $1.5 billion for industrial carbon capture, $800 million for biomass, $400 million for geothermal energy, and $300 million of research and development funding earmarked for the military. Stimulus money also supports green building. Federal buildings will get $4.5 billion in renovations; public housing will be awarded $4 billion.

On the tax side, the ARRA authorizes $1.6 billion in clean energy bonds on top of the current $800 million, and a 30-percent investment tax credit to green energy manufacturers. In lieu of taking a tax credit of equal value, companies can received a grant, but they must start construction before the end of 2010.

The U.S. Energy Information Administration predicts that the United States can expect moderate growth in energy consumption, a greater use of renewables, and reduced oil and natural gas imports.
P.W. Grosser Consulting
Bigelow Tea’s global headquarters in Fairfield, Conn., features a large photovoltaic facility.
Joel Gordes, Environmental Energy Solutions

Even with these programs, securing the appropriate funding can pose a challenge for particularly large projects, but this seems to be easing. The need to upgrade the nation’s electrical grid is being driven by the age of the grid in addition to the need to tie in renewable energy sources. But, some feel the smart grid should not be rushed through before security of the system can be assured since there will be so many more access points.

“In the long term, however, the direction of the energy industry will largely depend on if and when a climate bill passes,” said Joel Gordes, founder and president of Environmental Energy Solutions in West Hartford, Conn. “There are several bills being discussed in Congress. Which one, if any, grows legs and gets passed in some form can have significant impacts to everyone in the energy industry.”

The bill getting the most press these days is the Waxman-Markey bill, which includes a renewable electricity standard for large utilities in each state, a cap on emissions of greenhouse gases, and a required permit for regulated industries for their emissions. If a company cuts its emissions so much that it has more permits than it needs, it can sell excess permits to other companies for future use. If a company doesn’t have enough permits, it can buy more or borrow its future credits and pay interest on them. Competing studies have claimed the various House and Senate climate bills would create jobs or kill them, hence the delay in coming to an agreement.

Regional and state focus
Some states tend to focus their funding on specific types of renewable sources depending on the situation. Joey Lee Miranda, Esq., partner in Robinson & Cole’s environmental & utilities group, counsels renewable energy clients on securing funding, siting approval, permits, and contracts. “Each state offers its own set of incentives,” Miranda explained. “For instance, Connecticut, with no indigenous petroleum supply, a location near the end of the natural gas pipelines, and several successful fuel cell manufacturers, has identified fuel cells as a target industry for economic growth. New Jersey is focusing more on the solar industry.”

“We see a lot of solar in the Southwest and in California, which record the most sunny days of all regions in the United States,” said Kurt Westermann, vice president, director of renewables and energy efficiency for Black & Veatch.

Alaska and Western states such as Wyoming, Montana, and Idaho are known for natural geothermal characteristics, so geothermal technologies seem to be the focus of state funding in these areas. “In general, coastlines offer the most potential to host wind power capacity,” commented David Evans, chairman and founder of David Evans and Associates. “But, there are numerous inland areas that offer very favorable conditions for wind, such as northern Texas, the central plains states, and pockets in the Mideast and Northeast.”

Production of biomass is currently centered in the Midwest and other rural areas, according to the Biomass Power Association. The National Hydropower Association website links to a U.S. EIA report showing that hydropower is most concentrated in the Pacific coast states.

Opportunities for civil engineering firms
“There clearly is a big opportunity for civil engineering firms to provide services to the power and energy market,” said Evans. “We have been providing land surveying and civil engineering to this market for more than 20 years. Most of our work has been for the wind sector, but we have also done a fair share of solar projects. Energy clients need civil engineering firms to prepare permit applications; design roads, sites, foundations, and stormwater control systems; and to conduct geotechnical investigations. Wind systems, in particular, require heavy civil design to provide construction and maintenance access to and foundations for each of the turbines.”

Paul W. Grosser, Ph.D., P.E., president of medium-sized P.W. Grosser Consulting, in Bohemia, N.Y., has been seeing a rise in the use of geothermal heat pumps (GHPs) due to federal and state rebates. GHPs take advantage of the earth’s relatively constant temperature at depths of about 10 feet to 1,300 feet by circulating water or other liquids through buried pipes in a continuous loop. “We recommend a feasibility study to determine the appropriate system to be installed in a given location,” explained Grosser. GHPs can be used almost anywhere in the world, as they do not require fractured rock and water for a conventional geothermal reservoir.

Westermann suggested, “It is a good idea for firms to review or conduct their own research on the market and to keep abreast of issues through attending major conferences and being active in industry associations.”

According to the Geothermal Energy Association, 144 new geothermal plants are under development in the United States.

Gordes has found it important to pay attention to market trends through associations, publications, and his professional network. “For instance, the Wall Street Journal published an article in September 2009 regarding the reduction in solar subsidies from Spain’s government. It caused a ripple effect of plummeting solar panel prices across the globe.”

There seems to be agreement that the renewable energy market is on what seems to be a long-term upward slope. Like any emerging market, the industry faces challenges such as acquiring adequate financing, wading through regulations, and working through competing political interests.

Civil engineering firms that have an interest in the market should follow legislation and funding initiatives and be active in industry associations. Be proactive and introduce your firm and your professionals to buyers in the utility market. If projections are correct, you will not be the only firm vying for work in this market.

Power and energy events
Following is a selection of the many power and energy conferences scheduled during the first half of 2010 that may be of interest to civil engineers:

  • Feb. 1-3 — Energy & Environment Conference, Phoenix, www.euec.com, sponsored by EUEC
  • Feb. 3-5 — RETECH 2010, Washington, D.C., www.retech2010.com, sponsored by ACORE and Trade Fair Group
  • Feb. 9-11 — International Colloquium on Environmentally Preferred Advance Power Generation, Costa Mesa, Calif., www.apep.uci.edu/ICEPAG2010, sponsored by National Fuel Cell Research Center and Advanced Power and Energy Program at the University of California, Irvine
  • Feb. 9-12 — Annual Campus Energy Conference: Repowering the Future, Reno, Nev., www.districtenergy.org, sponsored by International District Energy Association
  • Feb. 17-18 — Wind Power Project Siting Workshop, Denver, www.awea.org/events/projectsiting10, sponsored by American Wind Energy Association
  • Feb. 23-25 — Renewable Energy World Conference & Expo NA, Austin, Texas, www.renewableenergyworld-events.com, sponsored by Renewable Energy World magazine
  • March 5-6 — MIT Energy Conference, Boston, www.mitenergyconference.com, sponsored by Massachusetts Institute of Technology
  • March 11-12 — Alaska Power Association Legislative Conference, Juneau, Alaska, www.alaskapower.org, sponsored by Alaska Power Association, Alaska Energy Authority, and Southeast Conference.
  • May 23-26 — WINDPOWER 2010 Conference & Exhibition, www.windpowerexpo.org, sponsored by American Wind Energy Association

More information?
Additional information is available from the following renewable power and energy market resources:

  • American Public Power Association (www.appanet.org) — service organization for the nation’s more than 2,000 community-owned electric utilities that serve more than 45 million Americans.
  • American Wind Energy Association (www.awea.org) — with more than 2,500 members and advocates, AWEA promotes wind energy as a clean source of electricity for consumers around the world.
  • Biomass Power Association (www.usabiomass.org) — works to expand and advance the use of clean, renewable biomass power. The association represents 80 biomass power plants in 20 states.
  • Database of State Incentives (www.dsireusa.org) — comprehensive information on state, local, utility, and federal incentives and policies that promote renewable energy and energy efficiency.
  • Electric Power Supply Association (www.epsa.org) — member-driven organization open to any company or entity that is directly involved in the production, sale, or supply of competitive electric power.
  • Geothermal Energy Association (www.geo-energy.org) — trade association composed of U.S. companies that support the expanded use of geothermal energy and are developing geothermal resources worldwide for electrical power generation and direct-heat uses.
  • National Hydropower Association (www.hydro.org) — works to secure the energy, environmental, and economic benefits of water-power resources for all Americans. Members include public and investor-owned utilites, industrial power producers, developers, manufacturers, environmental and engineering consultants, and attorneys.
  • Solar Electric Power Association (www.solarelectricpower.org) — resource for information about solar technologies, policies, and programs. SEPA focuses on working with electric utilities, but provides value to all businesses that have an interest in solar electricity.
  • Solar Energy Industries Association (www.seia.org) — works to expand the use of solar technologies, strengthen research and development, remove market barriers, and improve education and outreach for solar.

Theresa M. Casey, FSMPS, CPSM, is a communications and marketing specialist for the A/E/C industry and principal with On Target Marketing & Communications, LLC, Columbia, Conn. She can be reached via e-mail at tcasey@on-target.biz.

 
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