Black & Veatch: No More Coal Construction

Black & Veatch is ending the company’s participation in coal-based power market design and construction, saying it will allow the company to focus on clean energy technologies. The engineering and construction giant’s announcement Oct. 29 comes just more than a month after another major energy company, General Electric, said it would exit the new-build coal power market.

“We are an employee-owned company, and we do not make decisions based on what the market wants to hear, or how the market will react,” said Mario Azar, president of Black & Veatch’s power business, in an interview Thursday with POWER. “We make decisions based on the values of our company. We’ve been around for more than 100 years, and we want to be around for another 100 years or more.

“That’s how we make decisions as the executive committee of Black & Veatch,” he said. “It’s really centered around our values and our future. It was us, telling ourselves, did we really want to be part of that [coal] legacy anymore?”

Overland Park, Kansas-based Black & Veatch in a news release said it recognizes “the global power industry is in a state of transformation and needs to accelerate the path to net zero as many companies, communities and stakeholders forge ahead with commitments to lower carbon emissions.” The company said it “will fulfill current project commitments to completion,” but going forward its efforts “will focus on supporting clients through their transition to a balanced energy portfolio with cleaner energy sources and towards achieving their decarbonization and sustainability goals.”

Black & Veatch, founded in 1915, is a global leader in the engineering and construction industry, and had revenues of $3.7 billion in 2019. The company over the past several years has increased its participation in renewable energy and energy storage technologies, and in Thursday’s announcement said it has supported “deployment of hydrogen as a carbon-free fuel and advanced technologies for carbon capture.” The company also has invested in modernizing a power grid that increasingly must accommodate intermittent renewable energy and different baseload sources of generation.

Decarbonization Targets

The company in its announcement said the move away from coal is a recognition that “clients need to reliably achieve varying decarbonization targets,” and said the shift allows the company’s workforce “to further accelerate the creation of solutions that help transform the industry, including helping clients reduce dependence on coal power assets and minimize the impact of those assets to the environment.”

“The transition away from any coal-related activity is about our commitment as a company to sustainability and accelerating our efforts to lead the emerging carbon-free energy future,” said Steve Edwards, the company’s CEO.

“There’s going to be a point when you have to make some of these difficult decisions,” Azar said. “We have been involved in building power plants in Asia, some of which we’re in the process of finishing, and as we near completion—particularly in Asia—there’s been a new wave of projects we’ve been invited to participate in. Looking at the future, looking at our sustainable commitment as a company, looking at the economics today that make renewable energy affordable, and certainly energy that is far, far lower in emissions than coal … we asked ourselves, ‘Do we really want to build another coal plant that is going to pollute the air for a very long time to come?’ We decided we don’t. It’s time to recognize that this is just the right thing to do.”

He continued: “There is a financial implication to this decision. We are leaving projects that we can participate in behind, and there is a [financial risk] to it, but we believe it is a very short-term implication compared to a longer-term vision. It’s really about the future, a cleaner and very robust energy alternative to coal.”

New Technology Needed

Azar, who came to Black & Veatch in 2018 after stints with Siemens and Westinghouse, said the changing power landscape calls for more engineering prowess and technical innovation. “At the same time the industry wrestles with its transformation, global communities continue to have demand for safe, reliable and cost-effective power,” he said. “These forces create a delicate balance that requires deep engineering and technology expertise to help guide the complex transition of power generation and delivery infrastructure.”

Black & Veatch in its news release noted that earlier this year the Intermountain Power Agency (IPA) selected the company as Owner’s Engineer on IPA’s Intermountain Power Project Renewal Project, “one of the earliest installations of combustion turbine technology designed to use a high percentage of green hydrogen,” it said.

The company’s new 2020 Strategic Directions: Electric Reports details how the power generation industry is pursuing lower-carbon solutions, including integration of renewable resources to the power grid to increase resilience and reliability.

Black & Veatch already is working on emerging technologies for carbon capture and utilization. It also is looking at advanced nuclear power technologies, such as small modular reactors, which were part of the focus of POWER’s virtual Distributed Energy Experience event Oct. 19-22.

Black & Veatch on Thursday said it recently surveyed more than 600 power industry executives, and more than 75% indicated their companies are investing more money in clean energy, with 8 in 10 saying spending on new generation capacity will be directed toward solar power, microgrids, and other distributed energy resources (DERs). Black & Veatch said its commitment to help clients achieve clean energy goals mirrors its own; by 2023, the company plans to have reduced its overall emissions by 20%, and its fleet and building emissions by 40% compared to 2019 levels.

Darrell Proctor is associate editor for POWER (@POWERmagazine).

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