Terracon has been delivering consulting engineering services to clients for more than 50 years. The company, based in Olathe, Kansas, is an employee-owned engineering consulting firm that provides environmental, facilities, geotechnical and materials services across a number of strategic business sectors, including power generation, oil and gas, transportation and facilities.
It is this power generation market, particularly wind power generation, that is currently experiencing significant growth like never before.
For Blair Loftis, vice president and National Director, Power Generation & Transmission at Terracon, key to this growth has been the impending expiration of the production tax credit in 2019. This means that companies constructing wind facilities from 2019 onwards will receive a lower tax incentive than in previous years.
“The existing production tax credit (PTC) expires in 2019 and this is forcing a number of companies to find ways to fill the incentive gap,” says Loftis. “In losing those tax incentives, more and more companies are now seeking out ways to reduce capital costs.
“That’s what we are doing at Terracon, we are working with these large companies and we are providing innovative solutions that helps reduce those costs.”
Loftis notes that 50%of the capital expenditure within the construction cycle of a wind farm goes into the turbines themselves, with the remaining 50% going into ‘balance of plant’ (BOP): roadways, conductor systems and other infrastructure elements and half of the BOP cost is the foundations.
The key then for Terracon is finding where it can add value into that construction cycle, and it has located it in the wind turbine foundations.
As the wind energy market grows and the PTC expiration date draws near, these developers are looking for bigger returns on each wind turbine they construct. Technological advancements in wind turbine generators has afforded an opportunity for larger machines. This equates to a significant increase in the turbine size, tower height and blade length. In turn, the foundation system grows larger and more expensive.
The market is moving towards larger turbines for land-based applications; from a typical size in the 2-megawatt family to turbines rated at 3-3.5 megawatts. Traditionally, the turbines have been constructed with a gravity spread foundation design, but with the additional mass at the top of the tower from these larger machines the industry was ripe for a paradigm shift.
That shift was brought about by the Patrick & Henderson (P&H) Tensionless Pier Foundation: a design that requires less than a third of the amount of concrete and steel and 25% less excavation and backfill when constructing the larger wind turbines. According to Loftis, an experienced crew can complete at least five foundations per week under favourable site conditions. “We work with specialty foundation contractors like JBS Energy Solutions, Blount Contracting, and Wind Stone Construction who have honed their skills for installing our foundation design. Some engineer, procure, construction (EPC) contractors, such as Blattner Energy have resourced so that they can construct our foundations on multiple projects simultaneously,” says Loftis.
“Terracon has spent the last few years bringing the P&H Foundation up to conventional standards of modelling so we could get that in front of the independent engineering community. Once we started doing that, we got the industry and market comfortable with Terracon assuming this role as the engineer of record.
“It has been a team effort. We have a tight group including Allan Henderson, the inventor of the foundation, two preferred materials suppliers (Contech Engineering Solutions and Williams Form Engineering) and a quality assurance firm (Structural Observation Services), and we all work together with a shared strategic platform.”
One of the key ways in which Terracon has and continues to establish itself as an industry expert in foundation design is through partnering with key industry players. Through this, Terracon is able to work with and demonstrate first-hand the true value of the P&H Tensionless Pier Foundation which in turn highlights its value in terms of, at least in part, helping to fill in the tax incentive gap.
Terracon has partnered with NextEra Energy Resources, one of the largest independent operators of power generating assets in North America. Terracon has been able to realise as much as 40% savings in construction capital costs of NextEra’s wind turbine foundations through the P&H Tensionless Pier Foundation.
“For NextEra it was an easy win,” says Loftis. “NextEra, like many companies, is faced with increased capital pressures as they deal with the expiration of the PTC. If Terracon can save one of the largest industry players 40% on 25% of their capital it is sort of a no-brainer.”
Terracon’s foundation is deep and cylindrical, as opposed to the gravity foundation which is typically flat and octagonal. The standard P&H Tensionless Pier Foundation requires only 110 cubic yards of concrete which translates to as much as 40% less concrete and 40% less steel as opposed to a gravity spread for the same size wind turbine.
“It's a significant cost saving in the industry. Especially when we're looking down the barrel of an administration with a trigger finger on tariffs, which effects the cost of the steel and other construction materials used in the foundations. Since the pier requires substantially less steel than the spread we reduce the amplitude of this kind of market volatility,” says Loftis.
Through the success of working with NextEra, Terracon was introduced to a number of engineering, procurement and construction (EPC) firms including market leaders like Blattner Energy. NextEra solicited the largest tender of wind projects in North American wind history last year. Blattner Energy won all of the projects and decided to build the majority of them using Terracon’s P&H Tensionless Pier Foundation. Terracon was retained to design more than 550 foundations for that round of projects.
For Loftis, this is the clearest representation of the paradigm shift that the market was craving. “There has been a paradigm shift, moving from the gravity spread foundation to the tensionless pier foundation because it saves cost,” he says. “Blattner Energy has invested heavily into the foundation and to me this is a message of industry disruption. What we are doing with our foundation systems is making the typical gravity spread foot foundation functionally redundant in the marketplace.”
Relationships are only as strong as the effort put into them and Terracon recognises this, conducting rigorous compatibility reviews to ensure that the foundation is compatible with site conditions. As Loftis notes, it’s in both parties’ interests to ensure that the foundation is in fact suitable for each specific project. “That is how we set up each engagement, making sure at the earliest stages of project planning that our foundation is the optimal design choice for project success,” he says.
To this end, Terracon does things a little differently. They look at success from project conception through project completion. “We meet with project managers, superintendents, foreman, and team leaders to conduct constructability reviews and spend a day or two discussing what portions of our design give the construction folks troubles in the field,” says Loftis. “I want to know every complaint that every craftsman, supervisor, project manager and foreman has about these foundations.”
“We then take that back and see if we can implement a design solution to enhance constructability efficiency. If we can revise the design to make the construction process easier, while still preserving the integrity of the design, then we can provide even more value to the industry.
“This level of constructability design review with NextEra, Blattner and Terracon involved is something that is rarely ever done across the industry.”
Over the last two years, the company has experienced significant growth in one particular sector – power generation and transmission – recording a growth rate of 20% year-on-year. With the growth of the market and Terracon’s role in defining that future market, Loftis has begun to work on a strategic growth plan for the next 24 months. He believes that, given Terracon’s market position, it provides him with a key understanding of where the market is heading and enables him to ensure the company is “fully equipped” for it.
Looking beyond the next two years, Terracon aspires to be the industry leader in wind turbine foundation design in the United States. The company has already begun to attract attention from around the world but Loftis will ensure that whatever direction the company grows in, it will be direction of growth that benefits the wind industry.
“There really is an opportunity for our foundation to support the economics of wind growth globally,” he says. “We're going to focus on North America. We're optimistic looking at the Latin America market, especially in Mexico, with the energy reform that's taking place. But I would say our goal is to capture the market, get the majority of the market share in the United States and Canada, and then move into foreign markets.”
Rapid7 NICER - starting a conversation on internet security
The Mental Health Center of Denver: The human side of tech
Kettering Health Network’s strategic digital transformation
SMC Corp of America: delivering competitivity through IT
World Vision: digitalising operations to help the vulnerable
SAP: The intelligent enterprise driven by 5G
OTIP’s technology driven, people-first response to COVID-19
MSU Federal Credit Union: digital disruption in fintech
Mastercard: a digitally disruptive organisation
STRIDES: digital transformation and collaboration with cloud
Bentley Systems: resilience in flexibility
WSIB: combating COVID-19 with rapid digitalisation
IBM: the Blueprint for a Data-driven Enterprise
Broadspire: Digital transformation grounded in client objectives
Northwell Health: Data-driven transformation in healthcare
Army National Guard readies for 2020 Cyber Yankee exercise
PPI: digitalised benefits programmes for modern insurance
HOOPP: delivering a world-class digital IT strategy
Canopy Growth: world’s largest cannabis distribution network
Terex’s supply chain digitalisation approach