The POWER Interview: Utilities Find Opportunities in Distributed Energy

The growth in renewable energy, along with new forms of power generation not dependent on transmission via the traditional grid, has created new business opportunities for both legacy generators and start-up power producers.

BOND, a Massachusetts-based company founded in 1907, is today a fifth-generation construction management and civil and utility general contracting firm, providing services to several industries, including power generation and electricity transmission and distribution.

Tony Bond, president of BOND Civil & Utility, has helped develop the company’s New Haven, Connecticut office, opened the company’s office in New York City, and has extended the firm’s reach across the Mid-Atlantic states. He recently visited with POWER to discuss how utilities should approach the distributed energy landscape, and how the growth of technologies such as offshore wind could impact U.S. power generation.

POWER: What opportunities exist for utilities in the distributed energy space?

Bond: There are a lot of varying opportunities out there for utilities in the distributed energy space; it’s all a function of how to work with the regulators and local/state agencies to have new policies enacted to help further develop and implement some of the newer technology. The two biggest areas that we see utilities being able to explore are geothermal technology and battery storage.

Geothermal has the potential to provide an abundant source of heating and cooling that would be otherwise hard to replace through electric generation. While there are higher upfront costs to implementing technology such as geothermal, the fact that there is already a significant amount of infrastructure in the ground that could be used to accommodate the transport of this energy would provide an effective means of utilizing existing assets in an arena that many utilities already know how to own and operate.

For battery storage, there is already a large amount of distributed generation assets being developed, such as wind, solar, etc., that are not bringing maximum value back to the grid. Battery storage is the next evolution for this market as it will allow everything from hospitals to cities to be able to be energized when the “sun isn’t shining.” Coming up with thoughtful and innovative ways to implement both small-scale and utility-scale battery storage will help provide further reliability and certainty to utilities, regulators and the general public.

POWER: What new forms of power generation do you see being available in the next few years (or what types of generation will see significant expansion)?

Bond: Being from the Northeast, there is certainly a heavy focus on battery storage and offshore wind. Just over the past year, we have seen a significant amount of progress in not only projects being solicited but also projects going into development. With the push by local and state agencies to solicit greener technologies but also limit any sort of fossil fuel power generation, there has to be some newer forms of generation that allow the energy grid to grow as a lot of current assets are being retired.

POWER: Is the offshore wind market poised for expansion? How could the political climate impact potential expansion?

Bond: I certainly don’t think it’s a matter of if but when. Offshore wind has proven to be invaluable to other parts of the world but that doesn’t mean it’s not without its challenges, both from a political and infrastructure development standpoint. We’ve been hearing about offshore wind for quite some time but I think the development of larger turbines (12+ MW per turbine) coupled with the “lessons learned” from Europe and more reasonable price points will finally allow offshore wind to take off.

I think the challenge will be aligning all lines of government to ensure that it goes forward. Vineyard Wind in Massachusetts is a great example of a project that is both wanted and needed by the state but due to the federal permitting through the BOEM, it has been delayed over a year. The same tactics that state governments have used to limit gas pipeline development are now being used by the federal government to hold up projects. It’s in the best interest of everyone—the people, business, and government—to be aligned with the energy future that we want to create and not use it as political fodder.

POWER: Is energy storage the holy grail in terms of ensuring reliability and resiliency for the power grid?

Bond: Holy grail might be a strong term as it still does require other assets to actually generate the power, but there certainly is a significant benefit to having battery storage technology continue to develop and be integrated into the power grid. Any form of storage, whether it be gas or others, have proven instrumental in ensuring reliability while also allowing both regulators and customers to be provided energy at the most economical price point.

POWER: What do you see as the major impact of the electrification of transportation? Will grid upgrades be needed to keep up with increased demand from charging of electric vehicles?

Bond: I think this all depends on how fast transportation migrates to electrification. With a lot of the different state goals of “net zero carbon” in the next few decades, both transportation and buildings will have to be electrified while also retiring existing carbon-producing generation assets. If done right, electrification shouldn’t have a major overhaul as the utilities will be able to keep up with their enhancements while energy efficiency continues to increase as it has over the past few years.

However, with the constant swings in the political sphere, I’m sure everyone’s concern is when the flip will actually get switched and how that will affect the overall trajectory of the grid. If it all comes at once, that will put a burden on regulators, utilities, engineers, and contractors to enhance the grid in a shorter period of time. While evaluating the electrification of transportation is an important study, it also has to be done in conjunction with the other political initiatives out there to ensure that everything is economical and feasible.

POWER: Offshore wind is far more prevalent in Europe than in the U.S.—why is Europe out front on offshore wind?

Bond: While I’m sure there are a multitude of factors that led to Europe leading the way in offshore wind, I’m sure the main two reasons are political and geographical. The U.S. energy grid has been largely driven by economic pressure while in Europe they have presumably balanced both social and economical pressures. That has allowed their governments and regulators to better align their energy strategies to implement this technology before it was ready for larger scale generation.

In addition, the U.S. has more recently discovered larger shale plays which allowed natural gas to jump to the forefront of the energy conversation while Europe has to rely on outside nations to provide them with this fuel. With “energy independence” being such a large topic among all countries, European nations had to find a way to sustain their grid in event of political turmoil.

POWER: What companies do you see as the major players in offshore wind, and are you aware of any new companies joining the sector?

Bond: Most of the companies that we have seen so far have been a mixture of international firms with large offshore wind portfolios, such as Orsted and Avangrid, mixed with regional utilities like Eversource, PSEG, and Dominion. I think based off the lessons learned from Europe, the international firms realize that they understand how to develop the offshore portion of the work but need the support from the local utilities in the permitting and onshore portion of the work. While that does not mean new entrants aren’t likely, I think it is most feasible to have a strong mix of international technology experts coupled with more local firms to ensure that the work is done in the most cost effective and expeditious manner.

POWER: Are there new technologies being developed to make offshore wind more efficient, and that could spur sector expansion?

Bond: The two biggest technological advances that are out there are the increasing output of the turbines, which continue to jump significantly every couple years, as well as “green hydrogen” development. The increase in turbine output allows for existing and newer projects to limit their footprint and environmental impact while also allowing greater generation at a more effective price point. Green hydrogen is a potential new business line that would further enhance the viability and longevity of the offshore wind market for the U.S. and other countries.

While it may be too early to tell how much offshore wind can help with green hydrogen development, I believe that it is an area that needs to be supported by not only the energy developers but also federal and state governments. Being that offshore wind is a proven technology in many parts of the world, we need to find a way to maximize all outputs of the technology in a way that is thoughtful yet effective and make sure the U.S. leads the conversation on any new fronts. I would hope that our goal is to not play catch-up, but to lead the conversation for future generations.

—Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine). He is also content director for POWER’s Distributed Energy Conference, scheduled for October 19-21, 2020, in Chicago, Illinois.