Press Release
September 9, 2019
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LAZARD RELEASES ANNUAL LEVELIZED COST OF ENERGY AND LEVELIZED COST OF STORAGE ANALYSES
– LCOE 10.0 shows continued cost declines for solar energy –
– LCOS 2.0 shows declining but widely variable battery storage costs –
NEW YORK, December 15, 2016 – Lazard Ltd (NYSE: LAZ) has released its annual in-depth studies comparing the costs of energy from various generation technologies and of energy storage technologies for different applications.
Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 10.0) shows a continued decline in the cost of generating electricity from solar technology, with lesser cost declines in other forms of renewable energy. Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS 2.0) shows cost declines in most battery storage technologies, but with wide variations depending on the type of application and battery technology.
In addition, LCOS 2.0, conducted with support from Enovation Partners, builds on the inaugural LCOS study conducted in 2015 with a refined methodology and the addition of new analysis that illustrates and compares the economics of “real-world” energy storage applications.
“Our studies continue to demonstrate that there are no one-size-fits-all solutions in energy generation or storage,” said George Bilicic, Vice Chairman and Global Head of Lazard’s Power, Energy & Infrastructure Group. “The demands of a developed economy will continue to require both traditional and alternative energy sources as the technologies driving renewable energy evolve.”
“The economic viability of commercial energy storage systems varies widely by application and on a regional basis,” said Jonathan Mir, Head of Lazard’s North American Power Group. “As manufacturers and customers identify optimal technologies for different use cases, we expect further innovation and a continued drop in costs, which will help drive increased use of renewables.”
The two studies offer a variety of insights, including the following selected highlights:
LCOE 10.0
- The cost of generating energy from solar photovoltaic (PV) technology continues to decline: The median levelized cost of energy from utility-scale PV technologies is down approximately 11% from last year, and rooftop residential PV technology is down about 26%, although the latter is still not cost competitive without significant subsidies and other policy support.
- The cost of generating energy from renewable sources other than solar, such as onshore wind, geothermal, and biomass, declined only at the margins from last year, reflecting both the maturing of technology in those areas and a relatively low level of investment. The median cost of generating energy from offshore wind generation declined approximately 22%, but remains substantially more expensive than onshore wind facilities, especially in the U.S.
- Even though alternative energy is increasingly cost-competitive and storage technology holds great promise, alternative energy systems alone will not be capable of meeting the baseload generation needs of a developed economy for the foreseeable future. Therefore, the optimal solution for many regions of the world is to use complementary traditional and alternative energy resources in a diversified generation fleet.
LCOS 2.0
- Due to refined methodology for LCOS 2.0, we recommend against making broad cost comparisons to the LCOS 1.0. However, the direct comparisons that can be made show that storage costs are generally dropping. For example, the median cost of using lithium-ion technologies decreased versus last year by approximately 12%, 24% and 11% for peaker replacement, transmission investment deferral and residential use cases, respectively, partially attributable to declining capital costs, among other factors.
- “Behind-the-meter” merchant energy storage systems, which are sited at factories, universities and hospitals, among other high energy use locations, show great promise. However, their economic viability depends greatly on local market structure and incentives, among other factors. For example, a battery-based storage system that is economically viable in Pennsylvania may not be viable in Texas.
- Industry participants continue to expect increased demand for energy storage to result in enhanced manufacturing scale and ensuing cost declines. If industry projections materialize over the next five years, cost-effective energy storage technologies will have increasingly broad applications across the power grid, such as providing an alternative to conventional gas-fired peaking plants in certain areas, as well as extending the usefulness over the course of the day of renewable generation such as wind and solar farms. LCOE 10.0 and LCOS 2.0 reflect Lazard’s approach to long-term thought leadership, commitment to the sectors in which it participates, and focus on intellectual differentiation. The two studies are posted at www.lazard.com/perspective.
Lazard’s Global Power, Energy & Infrastructure Group serves private and public sector clients with advisory services regarding M&A, financing and other strategic matters. The group is active in all areas of the traditional and alternative energy industries, including regulated utilities, independent power producers, alternative energy and infrastructure.
About Lazard
Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 42 cities across 27 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating to 1848, the firm provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments and individuals. For more information on Lazard, please visit www.lazard.com
The Lazard annual report on the Levelized Cost of Storage LCOS 3.0 was released today with the Lazard Levelized Cost of Energy report LCOE 11.0
Go to LCOE 3.0 Report and Executive Summary
LAZARD RELEASES ANNUAL LEVELIZED COST OF ENERGY AND LEVELIZED COST OF STORAGE ANALYSES
– LCOE 11.0 shows continued cost declines for utility-scale wind and solar energy –
– LCOS 3.0 shows declining but widely variable battery storage costs –
NEW YORK, November 2, 2017 – Lazard Ltd (NYSE: LAZ) has released its annual in-depth analyses comparing the costs of energy from various generation technologies and of energy storage technologies for different applications.
Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 11.0) shows a continued decline in the cost of generating electricity from alternative energy technologies, especially utility-scale solar and wind. Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS 3.0), conducted with support from Enovation Partners, shows declining cost trends among commercially deployed technologies such as lithium-ion, but with wide variations depending on the type of application and battery technology.
“The growing cost-competitiveness of certain alternative energy technologies globally reflects a number of factors, including lower financing costs, declining capital expenditures per project, improving competencies and increased Industry competition,” said George Bilicic, Vice Chairman and Global Head of Lazard’s Power, Energy & Infrastructure Group.
“That said, developed economies will require diverse generation fleets to meet baseload generation needs for the foreseeable future.” “Energy industry participants remain confident in the future of renewables, with new alternative energy projects generating electricity at costs that are now at or below the marginal costs of some conventional generation,” said Jonathan Mir, Head of Lazard’s North American Power Group. “The next frontier is energy storage, where continued innovation and declining costs are expected to drive increased deployment of renewables, which in turn will create more demand for storage.”
The two studies offer a variety of insights, including the following selected highlights:
LCOE 11.0
- As LCOE values for alternative energy technologies continue to decline, in some scenarios the full lifecycle costs of building and operating renewables-based projects have dropped below the operating costs alone of conventional generation technologies such as coal or nuclear. This is expected to lead to ongoing and significant deployment of alternative energy capacity.
- Global costs of generating electricity from alternative energy technologies continue to decline. For example, the levelized cost of energy for both utility-scale solar photovoltaic (PV) and onshore wind technologies are down approximately 6% from last year.
- Despite the modestly slowing rate of cost declines for utility-scale alternative energy generation, the gap between the costs of certain alternative energy technologies (e.g., utility-scale solar and onshore wind) and conventional generation technologies continues to widen as the cost profiles of such conventional generation remain flat (e.g., coal) and, in certain instances, increase (e.g., nuclear). Specifically, the estimated levelized cost of energy for nuclear generation increased ~35% versus prior estimates, reflecting increased capital costs at various nuclear facilities currently in development.
- Although alternative energy is increasingly cost-competitive and storage technology holds great promise, alternative energy systems alone will not be capable of meeting the baseload generation needs of a developed economy for the foreseeable future. Therefore, the optimal solution for many regions of the world is to use complementary conventional and alternative energy resources in a diversified generation fleet.
LCOS 3.0
- Among commercially deployed technologies, lithium-ion continues to provide the most economical solution across use cases analyzed in the LCOS, although competing flow battery technologies claim to offer lower costs for certain applications.
- Although energy storage technology has created a platform for discussions related to certain transformational scenarios, such as consumers and businesses “going off the grid”, it is not currently cost competitive in most applications. However, under some scenarios, certain applications of energy storage technologies are attractive; these uses relate primarily to strengthening the power grid and accessing cost savings and other sources of value for commercial and industrial energy users through reducing utility bills and/or participating in demand response programs.
- Industry participants expect costs to decrease significantly over the next five years, driven by scale and related cost savings, improved standardization and technological improvements, supported in turn by increased demand as a result of regulatory/pricing innovation, increased renewables penetration and the needs of an aging and changing power grid in the context of a modern society. The majority of future cost declines are expected to occur as a result of manufacturing and engineering improvements in batteries. Cost declines projected by Industry participants vary widely among energy storage technologies, but lithium-ion capital costs are expected to decline as much as 36% over the next five years.
- As the energy storage market continues to evolve, several potential sources of revenue streams available to energy storage systems have emerged. However, the ultimate mix of available revenue streams for a particular energy storage system varies significantly across geographies.
- LCOE 11.0 and LCOS 3.0 reflect Lazard’s commitment to the sectors in which it participates. The two studies are posted at www.lazard.com/perspective.
Lazard’s Global Power, Energy & Infrastructure Group serves private and public sector clients with advisory services regarding M&A, financing and other strategic matters. The group is active in all areas of 3 the traditional and alternative energy industries, including regulated utilities, independent power producers, alternative energy and infrastructure.
About Lazard
Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 43 cities across 27 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating to 1848, the firm provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments and individuals.
For more information on Lazard, please visit www.lazard.com. Follow us at @Lazard.
Link to source: Lazard Press Release for LCOS 3.0
Three Top Energy Talents Join Industry Innovator Enovation Partners
CHICAGO, Ill., May 24, 2017 – Enovation Partners announced that Matt McKenna, B. “Venki” Venkateshwara, and Tom Williams have joined Enovation Partners as it continues to rapidly build its strategy and organizational transformation capabilities.
Matt McKenna, a senior Booz (and Strategy&) veteran has joined Enovation Partners as an Advisor. Mr. McKenna brings 30 years of experience in combining rigorous, fact-based analysis with real-world practicality to deliver world-class performance improvement to the world’s largest utilities, oil & gas, and chemical companies. Matt has worked around the world, with a recent focus on supply chain, asset optimization, major capital program effectiveness, and technology-driven productivity improvements for the electricity T&D and generation sectors as well as for midstream.
“Venki” Venkateshwara has joined Enovation as a Principal in the Washington D.C. office. Mr. Venkateshwara is a well-known strategist, economist, and regulatory expert who has served senior management teams in the electricity industry for the past three decades in roles at McKinsey, Charles River Associates, Areva, Con Edison, ICF, and Siemens. Most recently, he has focused on assisting clients take advantage of the rapid growth of renewables and DER (Distributed Energy Resources).
Tom Williams, organizational transformation expert and co-author of The Agility Factor: Building Adaptable Organizations for Superior Performance, has joined Enovation Partners as an Advisor. Over the past three decades, Mr. Williams has worked across numerous industry sectors around the world, guiding large organizational transformations for dozens of corporations as a senior leader. Most recently, he has focused on partnering with senior leadership teams at leading midstream companies to redefine their culture and business systems as the sector experiences historic growth and change.
“We are delighted to be able to attract this caliber and diversity of talent to Enovation”, said Bob Zabors, CEO of Enovation Partners. “Our work at the forefront of innovation in the energy sector makes us a natural ‘home’ for top tier energy professionals who want to have a real impact on their clients and the industry. We are very pleased to welcome Venki, Matt, and Tom to the team.”
ABOUT ENOVATION PARTNERS
Enovation Partners is a strategy consulting and analytics firm dedicated to growth and innovation in the energy sector. Enovation employs experienced teams and proprietary analytics to deliver real, rapid impact. Enovation Partners was named one of the “Seven Small Jewels” of the consulting industry in 2017 by Consulting magazine. Enovation has offices in Chicago, New York, San Francisco, Washington D.C, and London. Energy + Innovation = Enovation™ (www.enovationpartners.com)
Contact:
Media Relations
312-953-3555
info@enovationpartners.com
www.enovationpartners.com
PRESS RELEASE
Consulting magazine's honor highlights consultancies "that are shaking up the profession"
February 15, 2017, Chicago—Consulting magazine has named Enovation Partners to its annual list of “Seven Small Jewels”—seven smaller consultancies that are breaking new ground in terms of firm management and financial performance.
“We’re honored to be one of 2017’s small jewels and to be listed with such an impressive group of firms,” said Enovation CEO and founding partner Bob Zabors.
Enovation Partners, which made Consulting’s “Seven to Watch” list in 2016, has seen impressive growth since it began. According to Zabors, Enovation identified three trends when its partners founded the firm in 2013: An emerging wave of technology innovation moving the energy market toward an increasingly distributed and renewable future; natural gas displacing other fossil fuels; and consumers and regulators developing new expectations for reliability, interaction, and sustainability.
“We wanted to facilitate this transition and work with companies to shape the new energy landscape,” said Zabors.
“We’ve been able to work with a broad set of clients--utilities, energy retailers, developers, suppliers, startups, private equity investors, and family offices,” said Zabors. “In turn, working across such a group has helped us expand our innovation capabilities, data sets, and analytics.” For Enovation, enhancing analytics and research are avenues of future growth, he said.
“We have a highly collaborative culture of sharing and challenging ideas and pushing ourselves to innovate, while we help clients do the same,” he added.
In January 2016, Enovation acquired the Cleantech Group, which serves to advance innovation and resource efficiency across sectors. Cleantech connects innovators and investors through events, research, and its i3 platform--an interactive database of more than 24,000 innovative companies.
Zabors also cited his group’s partnerships with WestRiver Management and Silicon Valley Bank, and with the Gas Technology Institute as an early catalyst.
We are in a generational shift, said Zabors. The expectation is that energy will be more renewable, that transportation will be electrified, that distributed technology will be pervasive, and that consumers and investors will look for more controllable and sustainable options.
"What attracts people to our consulting mission is also what poses the greatest challenges—staying ahead of the curve in an increasingly global market for innovation," said Zabors. "We help clients create new ideas and businesses and invest in where the markets will be in the future. It's exciting and, by definition, uncertain."
About Enovation Partners
Enovation Partners focuses on areas of rapid growth and innovation in the energy sector—including distributed energy resources, natural gas infrastructure, and venture investment—and provides strategic advice, advanced analytics and research, and networking opportunities (through its Cleantech Group affiliate). Enovation is headquartered in Chicago, with offices in London, New York, San Francisco, and Washington, DC. www.enovationpartners.com
Lazard's LCOS 2.0 has been released. Enovation Partners collaborated with Lazard on the methodology and analysis.
DEFG and Enovation Partners Customer Surveys Point to Significant Impacts of Residential Solar on Utility Customer Service Strategy and Operations
Press Release
January 19, 2016
Enovation Partners Welcomes Cleantech Group to Its Growing Network of Capabilities
Deal underscores how advanced technologies and innovative business models have become a strategic priority among energy companies, industrials, and investors.
Chicago, London, and San Francisco. January, 19, 2016 – Enovation Partners, LLC, one of the preeminent advisory services firms in the energy and infrastructure sectors, has acquired Cleantech Group, the leading global network for deploying sustainable innovations in energy and beyond.
Cleantech has moved rapidly from an aspirational set of technologies and business models to a foundation of strategy planning and innovation across industries.
“Since 2002, when it coined ‘cleantech,’ Cleantech Group has been at the forefront of new energy technology commercialization,” said Robert Zabors, CEO and founding director of Enovation Partners. “Its successful efforts to bring together entrepreneurs, investors, and corporate venture groups, through its well know events and its i3 Connect platform, have been instrumental in accelerating cleantech’s drive into the economy.”
“Combining those strengths with Enovation’s strategic advisory capabilities is a natural extension of both group’s missions,” Zabors said.
“Investment in sustainable technologies and the rate of customer adoption continue to progress,” said incoming Cleantech Group CEO Richard Youngman, former managing director of Cleantech Europe and Asia and partner with Enovation in the acquisition. “Together we will offer high-quality services for an international network of entrepreneurs, innovators, investors, energy companies and other industrials.”
The Cleantech Group assets are being acquired by an Enovation Partners, LLC, subsidiary, which will continue Cleantech Group’s brand and identity. The expanded group will maintain offices in Chicago, Boston, London, New York, San Francisco, and Washington, DC.
Cleantech Group connects sustainable innovation, finance, and corporate support in several ways
- Its events in North America and Europe are the premier intelligence and networking events for corporates, investors, start-ups, and government officials. Cleantech Forum San Francisco 2016 takes place January 25-27. Cleantech Forum Europe 2016 takes place in Lyon, France, April 11-13. The San Francisco Forum will see the release of the group’s annual Global Cleantech 100 and Award Winners – the top private innovation companies in clean technology.
- The group’s online i3 Connect subscription platform allows corporates, venture capitalists, investors, economic development agencies, and universities to find and vet start-ups, list targets, and connect directly with start-up decision makers. Subscribers gain access to proprietary intelligence on 24,000+ companies in (among other areas) energy efficiency, energy storage, smart grid, solar,water, and urban growth.
Established in 2013, Enovation works with electric and gas companies, new ventures, suppliers, investors, and large consumers to drive innovation and growth across energy and related industries. Enovation’s team includes top-tier strategy consultants and former industry executives, energy investors, regulators, and developers.
- Enovation focuses on strategy in the context of the exponential growth of distributed energy and technologies, and the disruptive effects of innovation in renewables and natural gas.
- Its work includes business model innovation, helping to accelerate investment, commercialize new technologies and improve business practices
- In distributed energy resources, Enovation has developed ground-breaking cost-comparison benchmarking for storage technologies and applications, as well as tools to locate DER opportunities and threats for utilities, developers, and large energy users.
- The group also works with natural gas utilities using advanced analytics to reduce risk and environmental impact, and improve productivity in construction, operations, and leak detection.
For more information on the transaction, the role of cleantech in today’s energy economy, Cleantech Group and Enovation Partners, or to speak with Robert Zabors or Richard Youngman…
Contact:
Eric Blume
Director of Communications
Enovation Parters, LLC
+1.202.281.8462
eblume@enovationpartners.com
Stephen Marcus
Director of Business Development
Cleantech Group, Inc.
+44.203.743.8615
stephen.marcus@cleantech.com
Heather Matheson
Senior Program Manager
Cleantech Group, Inc.
+1.415.233.9714
heather.matheson@cleantech.com
The first substantial comparison of energy storage costs, technologies, and applications - "Levelized Cost of Storage Analysis" was released on November 18th by investment bank Lazard. The groundbreaking study was developed in consultation and partnership with Enovation Partners.
Space-Time Insight and Enovation Partners Collaborate to Bring RealTime Visual Analytics to Natural Gas Operations
Chicago, Il. and San Mateo, Calif., June 24, 2015 – Space‐Time Insight, the leading provider of next-generation situational intelligence solutions, is teaming with Enovation Partners, advisors to the energy and infrastructure industries focusing on innovation and growth, to provide advanced visualization and predictive analytics to natural gas transmission and distribution operators.
Natural gas is currently experiencing increased demand thanks to low costs, growing supplies, and reduced environmental impact compared to traditional power generation. In many regions, transmission and distribution pipeline operators are strengthening and expanding their systems, leading to new capex, income and shareholder value. While new build is on the rise, there remain significant T&D assets that are aging. Despite growing pressure for new levels of safety from customers and regulators, the frequency of recent pipeline incidents has remained constant and severity has been trending slightly upward.
Space-Time Insight combines data from many different pipeline sources to provide real-time spatial analysis and help companies anticipate system problems and maintenance – and provide not only compliance assurance to regulators and customers, but also advanced approaches to gas integrity management. This allows professionals in pipeline-related businesses to address their toughest challenges:
- Achieving maximum risk reduction per dollar invested through robust, dynamic evaluation of the health, criticality and risk of their asset portfolios
- Employing multiple data source for real-time intervention to avoid potential system incidents
- Reducing complexity, cost, and risk by implementing a consistent approach to asset condition assessment and reliability centered maintenance
- Deploying an end-to-end methodology for efficient and effective asset investment planning
Enovation Partners and its natural gas team offer a comprehensive integrity management assessment program and a solution focused on risk-based compliance assurance for construction, leak detection and other inspection functions. Now, in collaboration with Space-Time Insight, Enovation can enhance those programs with cutting-edge situational intelligence and predictive analytics.
“First and foremost, transmission and distribution operators have to provide assurances to the public, employees, investors, and regulators that they can manage their pipelines safely and effective,” said Matthew Guarini, Director at Enovation Partners. “Whether operators are in the upstream, midstream, or downstream segment, they require real-time analytics that can actually use the mountains of data available from their assets to identify and act on operational events and optimize planning.”
“To solve the most critical challenges that natural gas pipeline operators face, Space-Time Insight sought a partner with recognized strengths in the gas T&D industry and specifically integrity management,” said Ajay Madwesh, VP Utilities IBU and Solutions, Space-Time Insight. “The combination of Enovation Partners’ extensive gas experience and the real-time analytics capabilities of Space-Time Insight creates the precise knowledge suppliers need to provide safe, reliable and affordable service.”
About Enovation Partners
Enovation Partners, is an advisory firm focused on growth and innovation in the energy sector, serving leading utilities, suppliers and investors. We serve clients using multidisciplinary teams of seasoned energy experts — top tier strategy consultants, former industry executives, energy investors, and developers—that combine expertise in technology, operations, regulation and markets to produce real business results, rapidly For more information, please visit www.enovationpartners.com.
About Space-Time Insight
Space-Time Insight helps companies in asset-intensive industries make faster, more-informed decisions. Our real-time visual analytics applications correlate, analyze, and visualize large volumes of business, operational and external data, spatially, over time and across network nodes. Space-Time Insight’s award-winning software powers mission-critical systems for some of the largest companies around the world, including eight of the twenty largest US utilities, helping them reliably, efficiently and economically deliver services and rapidly plan for and respond to a full range of operating events. Space-Time Insight partners with leaders in the industry including Accenture, Esri, IBM, NEC, OSIsoft, SAP, Siemens and Unicorn Systems. Space-Time Insight is privately held and based in San Mateo, CA. For more information, visit www.spacetimeinsight.com.
Space-Time Insight is a registered trademark of Space-Time Insight Inc.
For more information:
Eric R. Blume
Enovation Partners, LLC
+1.202.281.8462
eblume@enovationpartners.com
Drew Smith
Blanc & Otus
415.856.5127
PGW Can Help Fuel an Industrial Resurgence in the Philadelphia Region
Philadelphia. November 13—At today’s meeting of the City Council of Philadelphia, Enovation Partners’ directors William Kemp and Todd Allmendinger testified about how to use the assets of Philadelphia Gas Works (PGW) to help drive economic development through public-private partnerships.
The Philadelphia region possesses potent competitive advantages, flowing from its proximity to the massive energy production of the Marcellus and Utica shales, its status as a major transportation hub both domestically and internationally (port, rail, trucking), its world-class educational institutions and workforce capabilities, and its long history of leadership in chemicals, pharmaceuticals, and other energy-related industries. Public-private partnerships could strengthen PGW’s capability for contributing more broadly and flexibly to Philadelphia’s future as a key player in America’s industrial renaissance.
Kemp and Allmendinger also provided examples of how other metro regions, such as Jacksonville, FL, and Brownsville, TX, have used public-private partnerships to move forward on similar gas-related economic development opportunities. Their panel included supporting testimony from Alan Mosley of the Jacksonville Chamber of Commerce and Alicia Farag of the Gas Technology Institute.
PGW is the nation’s largest municipally owned gas utility. The testimony comes as Connecticut-based utility company UIL Holdings Corporation trying to keep alive its offer to purchase PGW, a move supported by Philadelphia Mayor Michael Nutter. City Council President Darrell Clarke recently announced that the council was against the sale and would not hold hearings on it.
Shale Gas, Collaboration, and Regional Growth
The revolution in natural-gas production can provide immense benefits to the U.S. economy, began Allmendinger. With diligent regulation of groundwater and methane-emissions risks, the overall environmental benefits should be substantial, too. Switching to natural gas from fuel oil and coal in power generation and from fuel oil, diesel, and gasoline in transportation and industrial applications, promise attractive economic and environmental paybacks.
The Philadelphia region should be at the forefront of that natural-gas revolution, said Allmendinger. Compared with many other cities around the country, however, the region’s progress on capturing natural-gas-driven benefits is modest. For instance, said Allmendinger, Jacksonville, FL, doesn't enjoy the proximity to gas reserves, infrastructure, industrial base, or educational resources that Philadelphia does. But it is using its municipal utility and harbor as platforms for sustained growth, creating partnerships with businesses, attracting capital and investment, bringing together labor, capital, customers, and businesses, and positioning Jacksonville to become an East Coast market leader in small-scale LNG and compressed natural gas (CNG).
- Three consortia of energy and financial players are competing to build LNG production and distribution terminals in Jacksonville, aimed specifically at serving the rail, maritime, and heavy-duty trucking industries. The regional market can support at least two such facilities.
- Local municipalities and UPS are ordering hundreds of natural gas-fueled vehicles.
- Shipbuilders and maritime operators are building LNG-fueled ships and plan to export LNG to utilities and industrial customers in the Caribbean region, as a superior alternative to diesel or bunker fuel oil.
Together, these projects represent several hundred million dollars in direct investment and hundreds of jobs in engineering, construction, terminal operations, and transportation.
Pennsylvania Growth in Natural Gas and LNG as Fuels
Another support for the Philadelphia region’s economic renaissance, said Allmendinger, is the fact that new sources of low-priced natural gas are displacing diesel fuel for transportation and high-horse-power applications—in trucking, waste management, public transportation, rail, marine, and mining.
Allmendinger pointed to the CNG fueling-station construction effort at Pennsylvania’s public transit agencies, approved by the state’s Public-Private Partnership (P3) Board. The private partner will design, build, finance, operate, and maintain the stations; many Pennsylvania companies want to participate. PGW President and CEO Craig White recently joined Governor Tom Corbett in opening Philadelphia’s first public CNG fast-fill pumps.
While the export of LNG from the Port of Philadelphia may face challenges, the Port’s activities will require LNG as a fuel, said Allmendinger – for marine vessels, locomotives, industrial, and off-grid power generation projects. This will require storage, distribution, and fueling operations. Several Pennsylvania energy companies are interested in expanding their operations into these areas.
To meet expanding LNG and CNG needs across the nation, natural gas utility companies are accelerating large-scale replacement programs to upgrade infrastructure while at the same time implementing technologies and practices to create operational efficiencies, according to related testimony by Alicia Faraq, senior manager for the data and integrity management research program at the Gas Technology Institute. PGW has supported the development of next-generation technologies and business practices that create operational efficiencies while maintaining public safety and ensuring long-term system integrity, said Faraq.
The market response to the growing advantages of LNG and CNG is accelerating, said Allmendinger. PGW could leverage its physical assets and human resource capabilities to gain a significant and profitable share of this market. “To move as quickly as needed and field the required marketing expertise, PGW would be well advised to seek suitable partners in a P3 structure,” said Allmendinger.
In response to questions by council members about how to structure public-private partnerships, Kemp testified that PGW should bring to the negotiating table its capabilities and objectives and work out with its private partners the ownership and operating structure that would succeed best in the marketplace. The structure would be fitted to the opportunity. Agile public and private companies make these types of strategic partnering decisions as a normal course of business.
"Southeastern Pennsylvania should seize this historic opportunity to capitalize on its unique geographic, logistical, human, and manufacturing endowments, and use public-private partnerships to take full advantage of the natural gas revolution in its backyard.”
About Enovation Partners
Enovation Partners is an energy and infrastructure consultancy using flexible teams of high-level, deeply experienced partners and principals to work directly with company executives to take advantage of changes and opportunities in the industry.
About Gas Technology Institute
GTI is the leading research, development, and training organization addressing energy and environmental challenges to enable a secure, abundant, and affordable energy future. For more than 70 years, it has provided economic value to the natural gas industry and energy markets by developing technology based solutions for industry, government, and consumers. www.gastechnology.org
Link to testimony
PRESS RELEASE
Eric R. Blume
Director of Communications
eblume@enovationpartners.com
+1.202.281.8462