Future Forward Full Interview: Creating a ‘New Power Landscape’
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Jason Abiecunas is associate vice president and director of distributed energy resources at Black & Veatch.
V1 Media: Please provide a brief background of your education and career before your current role with Black & Veatch.
Abiecunas: Currently, I’m associate vice president and director of distributed energy resources. Before that, I worked in a variety of roles as consultant, engineer and project manager on a variety of renewable energy and fossil fueled projects. I worked on projects in North America; spent almost four years in Asia, worked on projects in Korea, Indonesia, Thailand; a little bit of work in the Middle East; a little bit of work in Africa. Now I’m back in the United States and focused on distributed energy, microgrids, and battery energy storage. Our team does feasibility studies, planning support, consulting, and EPC delivery—engineering, procurement and construction—as well as operations and maintenance support services for projects.
I have a bachelor’s degree in chemical engineering from the University of Colorado.
V1 Media: You work on “distributed energy resources.” What does that mean as opposed to just “energy resources?” What is the “distributed” part that changes the definition?
Abiecunas: The power grid developed over the last hundred years and is currently made up of a lot of large central-station power plants; either gas-fired, coal-fired or renewable energy plants that might be tens or hundreds or even thousands of megawatts at a single facility. These large plants are interconnected by an interstate of transmission and distribution networks to serve customers in communities and cities. Distributed energy resources would be anything installed at the distribution level or at customer sites at the point of load, either in front or behind the meter. It’s really putting that generation and storage of power closer to the point of use, down at the distribution level.
V1 Media: What do you typically do for clients?
Abiecunas: We work for a variety of power utilities, project developers, and commercial and industrial power users. We help clients understand their needs with respect to energy – whether they’re solving a sustainability problem, a resiliency problem, or trying to find a more economical way of delivering power. We help them scope out a project or find the best solution. Then we design and build that project. After that, we help operate and maintain it after that project’s online. We do that with a variety of tools and techniques as well as people and processes that we have developed over the years and continue to refine.
V1 Media: Can you briefly describe some of those tools?
Abiecunas: Something we’re pretty proud of is the ASSET360 platform from the Atonix group—a wholly owned subsidiary of Black & Veatch. It’s a platform that does everything from program management through operations and maintenance. It’s a tool that has been around for just over 15 years. It started out in the utility sector, remotely monitoring large coal-fired power stations. It has evolved into monitoring solar, wind, microgrids, smart meters and IoT devices. It allows us to keep tabs on all the distributed infrastructure we’re installing in the world.
There’s a module within that tool called SEKOIA that’s built to support the screening and deployment of distributed energy and grid modernization projects. We’re currently using it to scope out a large, nationwide distributed energy build-out. We’re looking at hundreds of different sites, taking those from site feasibility all the way through construction and operations and maintenance. That enables us to integrate several different teams internally and work effectively together.
V1 Media: When you work for clients, are they typically in one particular sector? For example, renewable energy or fossil energy. Or do you work with clients who are taking a mix of those energy sources, and then sending it to users?
Abiecunas: Both. We partner with conventional power utilities. We also work with commercial, industrial, and institutional clients like the University of Michigan, Shell and distributed retail sites. Anywhere that businesses are using energy we can provide solutions that address resilience, sustainability, and the economic use of energy.
When we do onsite projects, like microgrids, they’re typically a mix of solar, battery energy storage and fuel cells or reciprocating engines, or small gas turbines. We cover a range of technologies with our projects. We tend to be technology agnostic and really focus on defining the problem and then combining the right resources deliver on our clients’ desired outcome. We think of the different technologies as different tools in our tool belt to help solve the problem for that customer.
V1 Media: Are there any particular trends in power sources that you recommend, or do you take it on a case-by-case basis and see what’s best for a particular client?
Abiecunas: On a macro level, the big trend over the last 10 years is a decline in the cost of solar energy. Large-scale solar PV plants now are well under a dollar a watt and are maintaining that competitive position. Our teams doing large-scale solar projects are using lean techniques and are continuing to drive the cost and schedule down on those projects. It’s really making solar affordable and competitive almost everywhere now.
The other major trend is in the growth and affordability of energy storage. For the last hundred years, power has been generated and consumed at the same period of time. Now we’re able to store that power and use it later. Batteries provide ancillary services to help balance the grid and support high levels of renewable penetration. We have seen prices decline by over 40 percent within the last few years, which has opened opportunities for bulk storage of power on the grid and behind-the-meter applications to provide demand management and optimization and resilience.
The dominant technology is currently lithium ion batteries. That production is really being scaled up quickly to support the electric vehicle market, so there is significant investment in research and development and innovation in lithium ion battery products. We’re seeing a huge interest from commercial industrial and from utilities and communities, investing in battery energy storage to help solve a number of issues on the system, and to help support renewable energy.
We see storage becoming standard equipment on the grid as both a part of other renewable energy projects, and part of behind-the-meter applications to help solve local problems and resilience. We see the future as a mix of distributed and central station projects, but overall, we’re seeing the most growth occurring on the renewable energy side between solar and wind, and battery storage.
V1 Media: Where do you see the more long-term future directions going?
Abiecunas: Long term, we see a lot of investment in the transmission and distribution networks to evolve those systems to be a bi-directional platform for multiple types of generation sources. The network of the future will support energy transactions between consumers, greater flow of information between generators and consumers, and higher levels of resilience. Many of our existing systems were built for one-way power flow, and many systems don’t have a lot of intelligence or flexibility built into the system, so we’re seeing a lot of that flexibility start to be built into these systems to enable more resources to be plugged into these systems.
We see solar and wind energy continuing to grow rapidly. These technologies are now very cost competitive. We are now executing renewable energy projects for utilities that have traditionally focused on coal-fired generation assets. These utilities now see renewable energy as another asset class that brings value to their portfolio and their customers and they are aggressively investing in the technology now. We see that trend continuing.
We see, over 10 years, really significant growth in energy storage for a variety of applications including renewable energy integration, peaking applications, and in hybrid facilities with renewable energy generators to help provide a stable, dispatchable product. We will see places in the country that are approaching 100-percent served by renewable energy over that 10-year period.
Earlier this year, California hit a milestone of over 85 percent of in-state energy production from renewable energy sources for limited periods of time. That level of penetration is far beyond anybody’s expectations from just 10 year ago. To draw those trends out another 10 years, we expect to see even more penetration of renewables.
V1 Media: Were those two-way systems individual consumers or smaller companies?
Abiecunas: Expansion of market participants is being driven by the scaling of distributed energy technology, ability to connect these resources through high-speed data networks, and high levels of renewable energy penetration. These factors are changing the nature of power market participants and how the grid is operated. As an example, FERC Rulemaking Procedures 841/842 are currently ongoing to support the integration of energy storage into power markets and aggregation of distributed energy resources in power market transactions. There are several companies experimenting with blockchain technology to support peer-to-peer transactions of energy or environmental attributes of energy generation. These companies are seeing the opportunity for an exponential growth of transactions and participants in power markets and new systems and technology that will be required to effectively manage these markets. The next 10 years is going to be a period of innovation; a lot of experimentation around those two-way transactions on the system.
V1 Media: Could you describe the 2018 Strategic Directions Electric Report? Why was it created, and who are its intended audiences?
Abiecunas: We’ve been doing this annual report since 2006. We do a survey every year of our clients and business partners across different segments of the energy industry, really to take a pulse on what’s happening in the market, what’s keeping everybody up at night, and what trends the industry sees evolving. It really enables us to keep our finger on the pulse of the market and to share insights on evolving trends.
V1 Media: What are some of these trends?
Abiecunas: The “new power landscape” is a phrase we’ve used to describe a lot of the new distributed energy resources or new business models that are being opened up through new technologies. Examples are electric vehicle charging, distributed storage and microgrids and distributed solar, and combined heat and power. We are seeing both an interest from utilities in offering a broader range of services to their customers and a desire by energy consumers to take control of their energy spend: how they generate and consume energy.
We’re seeing a lot of utilities interested in providing additional services to their customers behind the meter and offering onsite storage, onsite microgrids, offering electric vehicle charging programs. It’s offering new business models, new products to their customers, expanding how they traditionally thought of their businesses. It’s really this evolution in the industry from a very vertically integrated, one-directional type organization to a multi-faceted business that’s providing a range of services to customers. Not just a meter on a wall.
V1 Media: Can you describe some of the key challenges that were found? I noticed that reliability was ranked number one.
Abiecunas: Reliability has several threads associated with it. As mentioned, the system has been developed over the course of a hundred-plus years. Continuing to evolve, maintain and upgrade that system is a core challenge, and part of the core mission for power utilities and participants in the energy industry. We’re seeing higher expectations from energy consumers on system reliability. If your Wi-Fi in your house is down for just a few minutes, that level of disruption is unacceptable and can cause you to change service providers. Everybody has many more electronic devices and much more connectivity; and consequently, the grid is expected to be even more reliable.
There are additional threats to reliability as a result of climate change and severe weather events – the recent government report on the economic and infrastructure effects of Climate Change highlights this increasing risk. There are greater risks associated with cybersecurity, which has ramped up to being front-of-mind for our clients. There’s also a realization that how the grid is managed is changing, as there are more distributed devices connected to the grid that are both pulling energy from and providing energy to the grid.
V1 Media: How is aging affecting energy infrastructure?
Abiecunas: Five to ten years ago, most of the investment on the network was on the generation side. That’s really shifted over the last decade, and the majority of investment is now on transmission and distribution. We’re seeing a shift over the next five to ten years to a majority of the investment into the distribution side of the system to create a smart platform to enable reliable use of distributed energy resources.
All those systems are being modernized. There are distribution and transmission assets that have been in service for 40 to 50 years. There’s a paradigm shift in some of the new equipment being plugged into the grid, where smart meters or some distribution system automation equipment doesn’t have a lifetime of 50 years anymore. These are shorter-cycle, software-intensive devices that will be replaced more often. We’re expecting to see a lot of investment in the grid to upgrade technology, and then keep technology current and cyber secure.
We’re also seeing a lot of retirements on the coal-fired generation side. Coal currently is less competitive against renewable and gas-fired generation. Something like 200 to 300 coal units have either been retired or have retirement dates announced, and these sites are being dismantled. There’s a lot of work going into repurposing these sites, which presents a significant investment opportunity. As an example, one of the tech giants is using a former coal-fired power site to host a data center. The site has the substation and infrastructure already there for a large power consumer.
V1 Media: I would think that these systems would be harder to repair and update as opposed to just replacing them. Is that the case?
Abiecunas: Yes and no. The power grid is a network system; it already has connections between all these nodes: generation nodes, substation nodes, and energy consumer nodes. I like to think of multiple layers in that system. There’s a hardware layer that includes the generation resources including large central stations and distributed energy resources; there’s the network, the transmission and distribution wires and poles connecting everything. There are communications across that system, and then there is the software layer controlling the flow of power across the system. Indeed, some elements of the system are being replaced, but things like the network, it already connects the nodes of the network – generation and load. Enhancement of the network involves layering of additional technology and intelligent controls on top of the existing network.
V1 Media: What would be some recommendations to improve these situations?
Abiecunas: There are a number of different things going on now, and a number of different conversations with clients. There’s currently lack of consistent policy direction on the utility level in terms of the use of and participation in distributed energy resource markets. That’s being worked through in several rate cases and pilot programs throughout the country, and that’s an area where we’re now working with a number of utilities.
From a policy level, the industry will be looking for clarity on treatment of distributed energy resources as part of the utility universe. Over the next five to ten years, my belief is that investment in the network—the platform at the distribution level—is a really smart place for the industry to spend money to enable technology to come on top of that network and building that network into a flexible network to accommodate different types of resources and different types of technology is a flexible and robust strategy.
As energy storage gets more and more cost competitive, I think it’s a great resource for the grid in providing cost-effective balancing and more-reliable renewable energy. There isn’t any one silver bullet, but a balanced approach to the different types of generation on the system, and building a smart network, will serve us best as a country and as an industry.
V1 Media: The report said: “If the industry fails to implement alternative energy solutions, and/or regulations fail to recognize the need for flexibility, utilities may experience an economic death spiral.” Can you elaborate on that?
Abiecunas: The utility death spiral is the concept that you have a network that’s built up to serve a certain group of customers, and the cost to operate that network is shared by all the customers on the network. If you start to get customers leaving that network, the cost to anybody else remaining on that network goes up, and the economics of going off the network are even more attractive, so it accelerates the decline of that network.
In order to combat the “utility death spiral”, utilities are modifying rates to provide fair treatment of customers who choose to install distributed energy resources. Utilities are also piloting ways to provide alternative energy services in order to bring value to customers and keep them as part of the network.
V1 Media: If you were going to speak directly to our engineering audience, particularly those in the energy sector, what would be some advice to them to help bring about some of these changes you think we need?
Abiecunas: For students in college or just entering the industry, I think there’s never been a more exciting and interesting time to be in the energy industry. We’re doing types of projects and deploying solutions that nobody was even thinking about 10 years ago, and that’ll be true in another 10 years. There’s an enormous opportunity to be innovative, to develop new solutions, to deploy new technology that’s never been done before. It’s an incredibly exciting time.
Companies working in the market should try to be humble enough to realize nobody has all the answers. The ability to experiment with new technology, new solutions, and new approaches to business now to help evolve organizations during the next 10 years will be incredibly important. The companies able to innovate and take advantage of opportunities opened by new technology and market structures are going to be the winners. Those trying to do things the same way they’ve done for the last 50 years will struggle.
I think there’s an enormous opportunity for the energy-consuming public that, in the next 10 years, will have a greener, cleaner, more-reliable supply of energy than they’ve ever had before, and we’re all going to reap the benefits from that.