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December 3, 2020

Black & Veatch Power President Mario Azar Discusses Firm’s Decision to Decarbonize

On October 29, Black & Veatch announced that it will decarbonize its project portfolio, no longer participating in any future coal-based power design and construction. The company will fulfill current coal-based power project commitments, while at the same time working with clients to transition to cleaner energy sources and to help them achieve their decarbonization and sustainability goals.

Black & Veatch is the 12th largest engineering firm in the country and the 2nd largest firm in the power sector, according to the 2020 ENR 500 report.

The announcement comes a month after the release of Black & Veatch’s 2020 Strategic Directions: Electric Report, in which survey responses from 600 industry stakeholders indicate sound reasoning behind the firm’s decision to decarbonize.

According to the report:

  • Coal-fired power production, which in 2019 plunged to its lowest level in more than four decades, will continue its decade-long slide, dropping by an additional 13 percent in 2020.
  • Nearly half of the survey respondents said they’re committing “much more” or “somewhat more” investment in local renewables, at least in the short-term.
  • Eight of 10 respondents forecast that more of their spending in new generation capacity will be directed to solar arrays on land, followed closely by energy storage (79 percent), and eventually microgrids and other distributed energy resources (65 percent).
  • Financial commitments to coal-fired generation ranked last, with just 3 percent planning to boost their spending, while 60 percent anticipated “much less” funding.

ACEC spoke with Mario Azar, president of Black & Veatch’s power business to discuss the reasons behind the firm decision and the future implications.

Why decarbonize?

The global power industry is in the midst of a historic transformation as our clients work to transform to low- or no-carbon energy. We believe now was the time to focus the diverse skills of our team on advanced-class natural gas power generation, energy storage technologies, and new combustion fuels such as hydrogen. We believe these sources represent the future of power generation and align well with our expertise in renewables integration and grid modernization – skills that will be critical to ensuring reliable power in a more distributed environment.

How did the firm decide to decarbonize?

Our decision to no longer pursue new coal-fired generation projects in any part of Black & Veatch’s portfolio is part of our overarching strategy and strengthens the company’s presence as a market leader in power generation, transmission, and distribution. The timing also supports Black & Veatch’s Advance Sustainability strategy wherein by 2023, the company plans to have reduced our overall emissions including fleet and building emissions, with a goal to achieve net-zero overall emissions within the company by 2025.

What renewable energy markets do you see as having the most potential?

Technology advancements making large-scale solar and wind power—coupled with advancements in battery storage—more cost-competitive continue to propel growth in the renewable energy market globally. The need to rapidly integrate renewable energy into the transmission grid will also drive investment and create opportunities.

How does this action alter your relationship with your clients?

Our global client base is overwhelmingly pushing towards a zero-carbon future. The fundamental challenge for the industry is whether to look to the future or continue to look to the past. Our decision is about positioning for tomorrow and helping clients meet the needs of their customers in the most reliable, sustainable, and cost-effective way.

How does it affect your internal operations?

This shift allows our 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 on the environment.

Do you believe your action will prompt other firms to also decarbonize?

We are focused on our clients’ needs, with more than one-third of our clients having set net-zero carbon targets by 2050 or earlier. Clients and Original Equipment Manufacturers (OEMs) have made strong commitments or announcements about their plans to reduce greenhouse gas emissions, and global financial institutions also are moving away from funding coal plants.


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