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The Big Build

Utility infrastructure projects face high costs, labor shortages and global competition for resources.

Fortnightly Magazine - February 2008

the upswing as are infrastructure projects in the water and telecommunications industries.

Fortnightly: Are you seeing more interest in new utility infrastructure construction or in refurbishment of older facilities?

Smith: Generally projects are driven by regulation, demand, permitting, public perceptions and market conditions. The infrastructure projects we see have all these elements to them, which means new and refurbishment work are both drivers. Certainly air quality regulations have driven retrofit air quality control and water/wastewater support projects, as well as the resurgence in combustion turbine projects.

As traditional fossil fuels meet with increased public scrutiny, nuclear and renewable energy sources have pushed programs and construction of ethanol, biogas, wind and solar. Market demands for carbon sequestration and a general desired goal for “zero” pollutants have driven studies and programs to develop new, viable technologies. Utilities are becoming more aware that they need to share in the risk of construction as well as with the development of these technologies.

Fortnightly: What types of utility infrastructure projects has Black & Veatch recently been awarded?

Smith: Our recent awards include coal, AQC scrubber, SCR, baghouse and precipitator retrofits, combined cycle, simple cycle, underground and overhead transmission, substations, nuclear construction and operating licenses (ESBWR, ABWR) and wastewater cleanup projects. These projects have been in a combination of contracts and services that include complete EPC, EPC management, construction management, construction and startup and commissioning only. This is in addition to the strong interest in wind, solar and biomass projects.

The Shaw Group: Environmental Design

Fortnightly: What market trends does The Shaw Group see evolving in construction of utility infrastructure?

Gill: In the United States and in international markets where we do business, demand for electricity continues to grow. At the same time, the cost and availability of fuel, concern about global warming and the emission of carbon dioxide and other gases from power plants is having a decided effect on the types of projects our customers are pursuing.

On the fossil side of the business, a number of states have given the green light to clean-coal projects, and we are partnering with customers in Arkansas, Colorado, Louisiana and Virginia to build new advanced coal plants and to re-power existing plants with technologies that will reduce emissions and increase energy efficiency. We also are the market leader in providing new air quality control (AQC) systems, as power plant owners implement technologies to mitigate emissions of carbon dioxide, mercury, nitrogen oxides and sulfur dioxide on existing assets. AQC work will continue to be a major focus of our business.

The fact is, the technology currently exists to build and operate coal-fired plants so their environmental impact is less than a combined-cycle or gas-fired plant, which some environmentalists now seem to favor. Regardless, Shaw is positioned to provide our customers with engineering, procurement and construction (EPC) on virtually any type of new power plant or retrofit they desire—including nuclear.

In 2006, Shaw Group acquired a 20 percent stake in Westinghouse, positioning us to participate in the next-generation AP1000 nuclear power plant deployment. To date, we are participating in the engineering,