13 minute read
The Energy Transition Moving Toward Renewable and Carbon- Neutral Solutions
The massive shift from fossil fuels to cleaner-sourced energy is not a simple or linear path forward.
By Brian Gallagher, Vice President, Corporate Development, Graycor
Governments, owners, investors, and consumers are demonstrating a steady commitment to net-zero, carbon-neutral, and other goals, with a focus on replacing fossil-based energy systems with renewable energy sources. Who is going to do the work of bringing us this new future? If you’re in the global energy sector…you are.
Leaders of manufacturing and power companies are faced with critical decisions on how to evaluate the best alternatives to fossil fuels and identify the pathways to make those alternatives a reality. So are electric vehicle manufacturers, battery manufacturers, and traditional original equipment manufacturers (OEMs). In addition to power and electrification companies, commercial, industrial, and retail owners will need to consider accommodating new technologies such as electric vehicle (EV) charging stations.
The massive shift from fossil fuels to cleaner-sourced energy is referred to as “energy transition,” and it is not a simple or linear path forward. No one knows this better than energy sector professionals, who are dealing with a convergence of regulatory, legislative, economic, environmental, and societal issues. Owners, utilities, and operators must develop plans that allow them to meet new sets of goals while meeting demand requirements. An element of these plans should be to work with engineering, construction, and technology providers during capital project planning. These professionals can help assess the company’s or facility’s current situation, help identify and evaluate alternatives, and develop recommendations and an approach. Specific services that can support owners as they implement changes include energy consulting, design, construction, and managed project delivery.
Energy projects that lead companies toward their carbon-reduction goals will be a combination of renewable generation and integration, back-up generation, energy storage, carbon capture and storage (CCS), and transmission and distribution (T&D) infrastructure. Some owners are utilizing natural gas as a “bridging strategy” on their journey to a complete transition to clean energy. Working with engineering and construction professionals, owners can combine a variety of components and technologies to create a customized project that will help them not only meet their carbon goals but fulfill ongoing demand.
Energy Transition Options
Some sectors, especially heavy industrial, may find it very difficult to transition away from fossil fuels. Carbon
he offshore wind (OSW) industry is a key element in
New York City’s ambitious goal to transition to clean energy in the coming decades. The federal waters offshore from the city’s open and available coastlines are ideal locations for wind farms, making wind-generated energy a vital renewable energy resource for helping New York City meet its goals of 100 percent clean electricity by 2040 and carbon neutrality by 2050.
In September 2021, then Mayor Bill de Blasio and New York City Economic Development Corporation (NYCEDC) announced a 15-year, $191 million Offshore Wind Vision Plan.1 Its aim is to develop best-in-class infrastructure for supporting the deployment of offshore wind farms in the New York Bight (the coastal area that extends from the Cape May inlet in New Jersey to Montauk Point on the eastern tip of Long Island). This investment will also support new wind-related manufacturing, installation, operations and maintenance, transmission, and other OSW activities to be located in NYC.
In addition to meeting the city’s clean energy objectives, the OSW Vision Plan will:
• Eliminate 34.5 million tons of CO2 — the equivalent of removing nearly 500,000 cars from roadways for 15 years • Create more than 13,000 jobs and generate $1.3 billion in average annual investment • Ensure 40 percent of job and investment opportunities are directed toward women, minorities, and environmental justice communities
Three Core Objectives
New York City plans to leverage its maritime infrastructure, its diverse talent base and workforce and business development ecosystems, and its capacity for innovation across all involved sectors, with three core objectives:
1. Sites and infrastructure — develop the technologies and infrastructure needed to support the construction and operation of 12 GW of offshore wind turbines 2. Businesses and workforce — train local businesses and workers to enter into the supply chain and provide the skill sets needed for the new, high-paying jobs that will result from these investments and new employment opportunities 3. Research and innovation — promote New York City-based R&D in offshore wind systems and technologies that can be exported around the world, building the city’s reputation as center of OSW innovation
In time, New York City will develop the expertise to advise on and support other offshore wind projects along the East Coast and be a key provider of equipment, consulting, planning, and engineering expertise. The city will also support the creation of an OSW developer-funded accelerator for New York-based startups to help them develop next-generation OSW technologies that will make wind
COME TO MIND WITH THOUGHTS OF
NEW YORK CITY, BUT IF CURRENT PLANS
GO FORWARD, THAT WILL CHANGE
DRAMATICALLY IN THE NEAR FUTURE. By Mark Crawford
energy systems more efficient and less costly. Other investments will promote workforce training and support businesses that seek to create a diverse talent pool for the offshore wind industry.
Choice Offshore Wind Sites
New York City already has infrastructure in place to create OSW hubs in Brooklyn, such as the South Brooklyn Marine Terminal (SBMT), the Brooklyn Navy Yard, and the Red Hook Container Terminal. Staten Island is also strongly positioned to be a major contributor to the OSW Vision Plan — the Arthur Kill Terminal (AKT) would provide open access to the newly established federal offshore wind lease areas and also attract manufacturers of components to New York City Industrial Business Zones (IBZs), creating additional jobs through a growing network of supportive suppliers moving into the area.
One spot where the OSW industry is likely to grow is Rossville, Staten Island, where the city recently released a request for proposals for a 33-acre waterfront site on the Arthur Kill. Between AKT, Rossville, and other nearby large sites on the south shore of Staten Island — combined with the island’s legacy maritime cluster of tug and barge businesses on the north shore — New York harbor is a powerhouse for advancing OSW renewable energy on the East Coast.
Already under way, SBMT is the most advanced part of the OSW Vision Plan because of its existing infrastructure, facilities, and excellent location. New York City has committed $57 million in support of OSW development at the South Brooklyn Marine Terminal, on top of $115 million invested over the past decade, which will transform SBMT into one of the largest offshore wind port facilities in the nation. Plans include heavy lift piers and establishing an OSW operations and maintenance base for the Norwegian energy giant Equinor. The terminal will also become a power interconnection site where wind energy from the Empire Wind 1 project will plug into the city grid providing power for half a million homes (this is power from Equinor’s first North American wind farm located 14 miles offshore from the Verrazzano Bridge). Additionally, Equinor will use SBMT for the next decade to stage and prepare OSW turbines for installation offshore as part of Equinor’s commitment to build their Empire Wind 1 & 2 and Beacon Wind 1 energy generation projects in New York State. Following Equinor’s use of the terminal to build wind farms, SBMT will play a role in the development of wind farms by other OSW developers — serving as a conveyor belt for the creation of the next generation of renewable energy.
Future Investments
Another aim of the OSW Vision Plan is to secure additional federal, state, and private funding to drive the core objectives forward at the highest possible speed to achieve the long-term goals of 100 percent clean electricity by 2040 and carbon neutrality by 2050, as well as to become an internationally recognized expert on OSW in the process. To help grow these bold plans , NYCEDC has established an Offshore Wind Industry Advisory Council, whose members are experienced in the offshore wind industry and will lend expert insights as development progresses.
“These investments not only position New York City as a hub for the emerging domestic offshore wind industry, but also increase economic opportunities for the historically disenfranchised residents of Sunset Park in Brooklyn,” said K.C. Sahl, Northeast Energy Market Leader at VHB, a civil engineering firm active in the offshore wind industry and co-chair of the Offshore Wind Industry Advisory Council. “New York City is also modeling how large-scale climate and economic goals can be achieved through inclusive partnerships with public, private, and community-based stakeholders.”
With 520 miles of coastline and one of the largest natural harbors on the East Coast that has attracted generations of maritime entrepreneurship, New York City is poised to be a major center for the development, construction, and long-term maintenance and operation of offshore wind farms on the East Coast. From legacy piers and new infrastructure to repurposed and new industrial spaces, there is an abundance of opportunities for growth of the offshore wind industry.
capture and storage (CCS) or carbon capture, utilization, and storage (CCUS) may provide a solution in these scenarios. Carbon capture can successfully divert the majority of CO2 emissions from power generating and industrial facilities. With CCUS, the captured carbon can be used in the production of manufactured goods or in industrial processes, or even in the creation of building materials. For CCS, storage of captured carbon within geologic formations provides deep-earth containment.
Types of alternative generation include:
•Hydrogen • Renewable natural gas (RNG), which is primarily methane • Biofuels/biomass/waste-to-energy. • Hydrogen fuel cells • Solar, wind, and hydroelectric • Combined heat and power (CHP) • Aeroderivative gas turbines (backup power)
“The
Transmission and distribution options can include:
•Localized energy generation, such as distributed generation (in which electricity is generated for use on-site rather than being transmitted over long distances from a centralized facility) or microgrids (small enough to power industrial sites, small communities or areas with critical infrastructure) • Modernization, or strengthening, of the grid, often by incorporating digitalization and/or advanced analytics • Updating substations with wireless technology • Improving oil or gas pipelines by reducing emissions, strengthening the network, etc.
Some renewable energy sources — notably wind
and solar — are variable; that is, they do not offer the same consistency and reliability as traditional fossil fuels. Therefore, additional investments must be made to augment peaks in demand and shift loads. These investments include backup generation (and associated transmission systems), digitization, and, especially, energy storage. Battery storage systems are most common although longduration storage options, such as chemical, mechanical, gravitational, or thermal storage, may also be considered.
The electrification of vehicles is a major driver of the energy transition, principally because its effects — and its demands — are spread across a large segment of society. EV and battery manufacturers are investing billions in greenfield and expansions. So are manufacturers in the EV supply chain, such as suppliers of chemicals, materials, plastics, microchips, semiconductors, and
more. Traditional OEMs and their suppliers are investing capital in retooling and expanding their production. But it is the consumer need for widely available charging infrastructure, and the production electrification of vehicles is and support spaces for those charging stations, that makes EV adoption such a game-changer. As the ubiquitous corner a major driver gas station gives way to EV charging staof the tions, energy transition becomes apparenergy ent at a very granular level. transition, Industry Adoption So Far principally Most major utilities have committed because its effects — to significant decarbonization in the near future. Many are aggressively retiring existing assets that depend on coal and inand its vesting in bridging strategies, particularly demands — coal-to-gas conversion systems, natural are spread gas peaking facilities, and natural gas distribution. Currently, many renewable across a projects are going to existing coal sites large due to the availability of land, permitsegment of society. ting, and the ability to directly tie into the T&D infrastructure. Most utilities are also engaged in pilot scale and demonstration projects to prove commercial viability, often supported by funding from government agencies such as the Department of Energy (DOE). For utilities, the energy transition must account for reliability and resilience…yet this becomes more challenging in the face of extreme weather events. In some cases, new technologies such as artificial intelligence and machine learning may improve forecasting so that energy output can be more finely tuned. Many of the solutions that are being built to strengthen and diversify the system, such as strengthening the grid, building microgrids, or installing battery storage, will help offset the problems associated with extreme weather events, as well. Many large industrial and commercial companies have committed to switch to 100 percent renewable energy, setting ambitious net-zero and decarbonization targets, some as part of the RE100 initiative.1 Similarly, more than 300 large companies are part of the Renewable Energy Buyers Alliance.2 Early action steps include investing in on-site renewable generation, battery storage, and EV charging for vehicles and equipment. Many developers have also become involved in renewable energy projects. Typically, they work with energy companies or other owners to identify project opportunities and enter into power purchase agreements (PPAs). The developers take responsibility for identifying a location, securing financing, executing contracts, and arranging for construction. Commercial real estate owners, like large commercial and industrial companies, are investing in EV charging stations.
Engaging Partners and Evaluating Alternatives
Making changes on the scale demanded will require owners, utilities, operators, developers, technology providers, engineers, and contractors to work together from the conceptual phase of a project through to commercial operation and beyond. One thing to keep in mind is that contractors who have been in the power business for decades will have experience with other major historical transitions and will have strategies in place for rethinking processes from the ground up. They will be able to provide sophisticated, scalable estimating and construction and program management, general contracting, program management, and self-perform services. Computer modeling of the planned facility, along with simulations and other planning tools, can provide clarity on a project before ground is broken; with some modeling software, operations decisions can be integrated into the model.
Partnerships with contractors and subcontractors will play an important role in project success. Many of the current decision-makers in power and oil and gas companies have deep experience in all the requirements surrounding fossil fuel generation and distribution, but now expertise must be built as companies transition to renewables, so establishing relationships with knowledgeable partners will be vital.
It’s easy to feel overwhelmed by the scope of the impending changes. But some challenges are already being clearly identified and effectively addressed by owners, engineers, and contractors. In addition to the bridging strategies already noted, undertaking small projects to start with can help owners ease into the transition. Small projects keep planning and construction more manageable — although they will typically be executed on a tighter timeline, meaning they will still require sophisticated preplanning and preconstruction efforts. Also, because energy transition projects require technologies that are relatively new, plans should be built in from a project’s inception to track and monitor the system performance well into the operations stage.
The world is entering a new phase of energy production and consumption. While there are plenty of new challenges, the key to success will involve effective deployment of existing technical expertise, as well as reliance on industry relationships, to thoroughly assess the “knowns” of a given project and effectively tackle the “unknowns.” n
1 https://www.there100.org 2 https://cebuyers.org
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