Power play: How construction companies can capitalize on the renewable energy sector
Every so often, an ambitious project emerges that seems to electrify public sentiment about the renewable energy industry, giving hope that sustainable technologies will one day be the rule rather than the exception.
Elon Musk, for example, founder of electric car manufacturer Tesla, has been advancing what amounts to a huge solar initiative on multiple fronts. First, Tesla announced that its new $5 billion "gigafactory" in the Nevada desert would be powered by solar panels placed on the roof, as well as in the surrounding hills. Tesla also completed the purchase of SolarCity, a photovoltaic installation company, at the end of last year, representing a $2 billion commitment to the future of solar power.
Since then, Tesla has introduced a line of textured-glass solar shingles that allow the light to pass through onto a photovoltaic cell. With the look of a traditional shingle, it solves the aesthetic issue that has kept some homeowners from opting for solar energy. Other pieces of Musk's vision include his solar battery storage products Powerpack and PowerWall, which save solar power for future use.
With all the excitement surrounding renewable energy — especially in wind, solar and energy storage — how does that trend impact construction firms looking to take advantage of burgeoning market demand?
One company's path to success in the sector
Not every company started out on its renewable energy journey with such focus as Tesla. Tom Wacker, chief operating officer of construction and real estate development company Mortenson, said he would love to say that the company's foray into the renewable energy industry was a result of strategic planning, but, as Wacker said, "It was happenstance and then very much a plan."
"The original [move] was when a [wind] turbine manufacturer was trying to find a contractor and made a connection with an estimator in our industrial division," he said. "Then came the strategy."
Since Mortenson's renewable energy sector's first project in 1995, the segment has navigated its way to become one of the industry's top performers. In 2015, Mortenson became one of only two Minnesota contractors to enter the large-scale battery storage business when it formed a new energy storage business unit.
In its 2016 Top 400 Contractors rankings, the Engineering News-Record named Mortenson the No. 1 U.S. wind contractor and the No. 3 solar contractor. ENR also ranked the company, which was No. 18 overall by revenue, high in the power and transmission and distribution categories. Additionally, Mortenson's renewable energy sector represented 34% of the company's total 2016 revenue, according to the Star Tribune.
As further evidence of its standing in the renewable energy sector, Xcel Energy chose Mortenson earlier this year to build a $1 billion, 300-turbine wind farm at Rush Creek in east-central Colorado, the largest such single-phase facility in North America. The project is the company's biggest wind project yet and will have the capacity to produce 600 megawatts of electricity.
The feasibility and potential for renewable energy projects
The immense scale of projects like these can make one wonder if wind technology is suitable for space-challenged areas, or if it is destined for chunks of the country, like the West, that still have room for the massive turbines.
Wacker said the company has constructed a small five-turbine farm in New Jersey, a testament to his belief that "you can build them just about anywhere."
In fact, wind power, Wacker said, now produces nearly 5% of U.S. energy, and in some states, wind farms can produce as much as 50% of needed energy at peak loads.
So how does energy play into Mortenson's other construction and real estate operations? Wacker said that like all of Mortenson's other business units, renewable energy is market-focused, but there is room for integration with other projects.
Currently, the company is installing a 1.3-megawatt solar energy collection on a carport at the Peña Station NEXT transit-oriented development in the Denver area, as well as its first grid-connected battery storage project. The grid will play a significant role in the Smart City concept, which is integral to the TOD.
As part of the Peña project, Mortenson also constructed the 112,500-square-foot Panasonic Enterprise Solutions Company (PESCO) building, which the solar-energy storage grid will service.
Wacker said this is only the beginning for such crossover projects, particularly as it concerns the energy storage segment.
"We see more opportunities for that," he said. "Battery storage can do a variety of things — replace emergency generators … and give customers energy solutions maybe they haven't thought of." Battery storage also comes into play with wind farms. "When the wind is blowing, it's putting power on the grid," Wacker said.
Christopher Alt, principal and technical leader of Studio Ma in Phoenix, said there are currently large-scale solar and wind installations designed as part of manufacturing plant, corporate headquarters, university expansion, housing development and other projects. "The incremental costs of the renewable energy systems may be offset by the reduced operational costs," he said, "especially for … long-term building owners."
A catalyst for job growth
And then there are the jobs. A January report by the Department of Energy found that energy-related projects provided more than 2 million construction jobs in 2016, representing 31% of the total construction workforce. Of those 2 million jobs, 1.4 million were in the energy efficiency segment. Although these figures also include smaller-scale residential and commercial contractors, it's a shift that represents what's to come in the industry.
"There is an ever-increasing demand for workers that are highly skilled in energy modeling, detailed energy audits, and related functions necessary for working in today’s — and tomorrow's — energy-challenged world," Alt said. "Where there is a challenge, there is an opportunity."
Wacker added, "there are multiple spots where employment is made." There are many skill sets, he said, that can be adapted easily to the energy sector, like those of ironworkers and electricians. For the maintenance and operations side, a training program can prepare those for a career in the field, a process made even easier if the workers have prior construction experience.
What's next for renewable energy construction
As for what the future holds for the renewable industry overall, Alt said, "Political winds seem to be blowing against the renewables sector, but economic data show gains in renewables that make it a very competitive part of the economy," referring to the Trump administration's shift away from President Barack Obama's Clean Power Plan and other energy initiatives.
Alt said the construction industry should continue to see large-scale projects, more technology R&D, as well as more solar and wind systems integrated with various types of buildings and developments.
Wacker said wind, solar and storage all have the chance at growth, but there are still some unknowns. "It's going to come down to if there's a new disruptive technology that comes into play," he said. "We would have said 10 years ago that solar wasn't financially competitive, and it is."
Follow Kim Slowey on Twitter