Disruptive forces related to changing customer demands, regulatory change, rapid technology advancement and capital sourcing have created significant changes for the U.S. electric utility industry. These disruptions are creating a new industry environment to which utilities will increasingly need to transform and adapt. Overall, the industry model will evolve over time to become flatter, more agile and better able to respond to internal and external market forces.

Rapid technological advancements, coupled with greater customer awareness of energy consumption, have driven an increase in customer demand for energy-related products and services. In turn, the market viability of technologies such as distributed generation and energy efficiency products has increased and, as a result, the ability of customers to minimize their reliance on electrical grids is forcing utilities to respond. Advances in rooftop photovoltaic (PV) solar panels, once deemed too expensive for the average residential consumer, combined with innovative financing arrangements promoted by new market entrants such as SolarCity and Vivint, have made the prospect of rooftop PV solar a financially feasible option for homeowners in many markets. These present new challenges to the current, capital-intensive utility business model. 

In August, President Obama announced the Environmental Protection Agency’s (EPA) finalized rules for the new Clean Power Plan (CPP). The plan’s overarching goal is to focus on reducing CO2 emissions by 32 percent from the levels measured in 2005 by 2030, with meaningful reductions expected by 2020.  

The overall plan touches on a variety of clean power initiatives, with the core of the plan focusing on improving electricity production and transportation. These two areas were strategic decisions, as they account for 58 percent of all the carbon dioxide pollution in the United States. Changes in these two areas are expected to drive the development and adoption of newer and greener methods of energy creation.

The solar power industry had a good summer, to say the least. First, in August, the U.S. Environmental Protection Agency unveiled its Clean Power Plan (CPP) that calls for drastic cuts in carbon emissions in the next decades and which is widely seen a major boost for sustainable energy sources. The same month, the White House announced $1 billion in loan guarantees to speed the adoption of renewable power sources such as solar.

In September, the Energy Department announced more than $102 million in new projects and funding to support clean energy innovation. Then, the solar industry hosted its premier event, Solar Power International (SPI), Sept. 14-17, in Anaheim, Calif. Addressing the SPI audience on Sept. 16, Vice President Joe Biden gave a whole-hearted endorsement to the solar industry, saying that “wind power could support 600,000 jobs over the next 35 years. Good-paying, middle-class jobs.”

Over the next 20 years, demand for power in the United States is expected to increase approximately 1 percent annually, with worldwide demand climbing even higher. Even as demand increases, engineering, procurement and construction (EPC) contracts likely will continue to be the predominant form of contracting in the energy sector. EPC contracts – sometimes referred to as turnkey contracts – are single design/build contracts for complete construction of a power plant and include provisions for all design, equipment procurement, fabrication and performance testing. The parties to an EPC contract typically are the project owner and a business entity specifically formed between contractors and design professionals to support the construction project.  

The entities created between contractors and design professionals may take the form of joint ventures, consortiums, limited liability companies, corporations and other businesses. Because the provisions in the consortium or joint venture contract often depend on the terms in the EPC contract with the owner, simultaneous negotiations will often occur among the individual members of the entity negotiating their own internal contract and between the entity as a whole and the project owner negotiating the terms of the EPC contract.

More than 30 percent of greenhouse gas emissions are from coal-fired power plants – more than all the vehicles on the road or, for that matter, any other industry. To reduce carbon emissions, the 

Environmental Protection Agency (EPA) has finalized the Clean Power Plan (CPP), a new rule that limits carbon emissions from power plants for the first time. The lengthy and complex plan establishes guidelines for states to regulate greenhouse gas emissions from existing fossil fuel-based electric generation units.

The CPP establishes targets to reduce carbon emissions for each state resulting in 32 percent total emissions reductions by 2030, which is below 2005 emissions levels. The targets range from 7 percent for Connecticut to 48 percent for South Dakota. States have different targets based on each state’s particular set of existing resources. These include the mix of coal and oil plants as well as their existing renewable energy infrastructure. States can achieve their goals through a variety of options that include shifting towards renewable energy, improving energy efficiency and switching to natural gas and nuclear power. 

When President Obama unveiled his ambitious Clean Power Plan (CPP) in August, my first reaction was: “It’s about time.” And, in the words of President Josiah Edward Bartlet (“The West Wing”), my second thought was: “What’s next?”

After all, as wonderful as President Obama’s plan is, the interim rules don’t go into effect until 2022 and the final rules don’t go into effect until 2030. That’s six years after the end of the investment tax credit (ITC) until the interim rules take place and 14 until the final rules are instituted.

So what are we supposed to do until then? What follows are five action steps the solar industry must take in the next six years to maximize the impact of the CPP.

Wind power has nowhere to go but up – literally. It’s probably no surprise that the fast-growing industry is optimistic about its future. After all, the sector created 23,000 new jobs last year and put more than $23 billion worth of private investment behind 100 wind projects, according to the American Wind Energy Association (AWEA). 

“Wind generation has more than tripled in the United States in just six years, exceeding 4.5 percent of total generation, and we are now focused on expanding its clean power potential to every state in the country,” U.S. Energy Secretary Ernest Moniz told an audience at AWEA’s WINDPOWER 2015 conference in Orlando in May. “By producing the next generation of larger and more efficient wind turbines, we can create thousands of new jobs and reduce greenhouse gas emissions as we fully unlock wind power as a critical national resource.” 

Water has been in the news quite a bit lately, whether it’s the drought in California or U.S. EPA’s expansion of Clean Water Act regulations. The people who work on the frontlines of issues like these will be meeting in Chicago this year to discuss the latest water quality technologies and trends.

The Water Environment Federation’s Annual Technical Exhibition and Conference (WEFTEC) is the largest event of its type in the world. More than 1,000 exhibitors will be on hand at Chicago’s McCormick Place on Sept. 26-30. The event will also boast dozens of technical sessions and workshops, and seven facility tours.

Check out our latest Edition!

 

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