Several top global construction firms have stepped up their efforts to partner with tech providers to offer full-service packages for utility-sector clients, which need as many fuel options and generating technologies as possible.
“It’s tremendous to offer all those different things—renewables, nuclear, all the new entries. Hydroelectric is starting to play a bigger role,” says Andy Byers, senior vice president Black & Veatch. “Helping existing facilities comply with new regulations is important, too. And then it’s not just generation—it’s [also] transmission and distribution, so there’s a lot at play in determining which installation goes where and how it fits within the whole system.”
Customers see diversifying an energy portfolio as lessening risk. Martin Fessey, business development manager for generation for Parsons Brinckerhoff, said Middle Eastern dependence on oil and gas will need to be reduced and replaced with nuclear and, to a lesser extent, renewables, which are growing but cannot meet base-load demand. “Nuclear is established in the United Arab Emirates, and it will be followed by Arabian Gulf Coast countries,” Fessey said in a statement.
International contractors such as Black & Veatch have been forming strategic tech partnerships to develop a variety of other innovative and alternative power projects, leveraging EPC experience and tech expertise to upgrade and build energy facilities faster, cheaper and better. Webcor teamed with CleanSpark Technologies to create synergies as it competes for a share of the U.S. microgrid market, which is “estimated to increase almost 300% over the next five years, from $225 million in 2016 to almost $1 billion in 2020,” the company said. Plus, a Fagen Inc.-Dupont Co. venture in October brought on line the world’s largest cellulosic ethanol production facility, which provides renewable fuel and biomass power to the grid.
In a partnership, companies can pursue work together that they couldn’t alone. Partners can help to open new markets and address the fact that, around the world, utilities want full-service power packages that go beyond EPC scenarios, extending all the way through the life cycle to finance, operation and even remediation. “We are focused on our transformation from an EPCM services company to an integrated solutions company. This transition allows us to provide lower-cost solutions to our customers, improve our margins and expand our markets,” Fluor’s Chairman and CEO David Seaton told analysts on an October earnings call.
Fluor was part of a big October shake-up at Westinghouse, the nuclear-turbine production giant whose lack of construction expertise has compromised its business. Fluor will manage a significant portion of the construction of the Vogtle Electric Generating Plant’s Units Nos. 3 and 4, near Waynesboro, Ga., and two additional nuclear generating units at the V.C. Summer Nuclear Generating Station, located in Fairfield County, S.C.
One of Westinghouse’s most formidable rivals, the Russian state-owned Rosatom, has dominated international nuclear-plant construction bids, often even loaning money to cash-strapped countries to build new plants. The company also has it own construction subsdiary, Atomstroyexport, which, because small problems with nuclear plants often can be disastrous, helps to bolsters customers’ confidence level, an ENR source says.
“We think the terms of the new relationship with Fluor haven’t been fully disclosed,” says Sameer Rathod, equity research analyst at MacQuarie Infrastructure Corp. “Beyond Vogtle, having a world-class EPC contractor on board is going to help them sell some of those packages.”
Full-service packages are growing. “Earlier this year, through a reorganization, we concentrated all of Bechtel’s nuclear talent in one global business unit. This business has the capability and capacity to perform work across the entire nuclear-facility life cycle, from R&D, design, construction [and] operations [to] decommissioning,” says Ty Troutman, Bechtel nuclear business director.