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EBI News for July 15, 2020- Environmental Investments Despite COVID Recession

EBI News for July 15, 2020- The following news section highlights the latest stories in the Environmental Industry. Including new projects in the works from LADWP, acquisitions & environmental investments, and coastal protection project awards in Louisiana.

Sunrun to acquire Vivint Solar for an enterprise value of $3.2 billion

Leading rooftop solar company Sunrun (San Francisco, Calif.) is to acquire rival Vivint Solar (Lehi, Utah) in an all-stock transaction valued at $3.2 billion. Vivint Solar stockholders are expected to own approximately 36%, and Sunrun stockholders approximately 64% of the company, which will have a combined enterprise value of $9.2 billion. Vivint Solar adds a direct-to-home sales channel to Sunrun’s platform. Residential solar has reached only 3% penetration in the United States, yet surveys show nearly 9 out of 10 Americans favor expanding the use of solar power, Sunrun stated, noting that “Consultative experience from trusted sales advisors is important to educate customers of the merits of solar energy.” Cost synergies are estimated at $90 million on an annual basis. Sunrun and Vivint combined provide about 75% of new U.S. residential solar leases each quarter, according to BloombergNEF. 

Kiewit-Stantec team moves forward on groundwater projects

The Los Angeles Department of Water and Power (LADWP) is a step closer to remediating and restoring the San Fernando Valley Groundwater Basin (SFB), providing a critical local source of clean drinking water for the Los Angeles region.  The Basin covers 226 square miles northwest of downtown Los Angeles and is one of the largest contaminated groundwater areas in the United States. The Kiewit-Stantec design-build team recently completed its “basis of design report” which outlines technology to treat contaminated groundwater and provide the basis for the treatment facility layout at LADWP’s North Hollywood Central and Tujunga Superfund sites. The $400-million projects by Kiewit-Stantec will remove industrial contaminants dating back to the 1940s and allow LADWP to treat contaminated groundwater. When completed, the projects will treat and deliver up to 75 million gallons of water per day.

Engie partners with Hannon Armstrong on U.S. renewables

European energy giant Engie (Paris, France) is selling 49% equity interest in a 2.3 GW U.S. renewables portfolio to Hannon Armstrong (Annapolis, Md.), a public company dedicated to investments in climate change solutions. Engie will retain a controlling share and manage the 13 U.S. projects (nine onshore wind and four solar). In April 2020, Engie secured $1.6 billion tax equity commitments, bringing the total for the portfolio to almost $2 billion. “The size of the portfolio and the magnitude of its tax equity financing—the largest ever in the United States—demonstrates ENGIE’s successful development in this market,” the company stated.

Global investment in new renewables defies Covid-19 recession

Renewable energy capacity investment showed great resilience in the first half of 2020, growing 5% despite the pandemic, according to BloombergNEF. Investment in offshore wind more than offset investment declines in solar, onshore wind, and biomass. Offshore wind financings in the first half of the year totaled $35 billion, up 319% year-on-year and beating 2019’s record. Investment decisions were made on 28 sea-based wind farms, with the market benefitting from cost reductions, new giant turbines, and a rush in China to take advantage of a feed-in tariff before it expires at the end of 2021, BNEF reported. “I expect a slowdown in offshore wind investment globally in the second half, with potentially a new spike early next year,” predicted Tom Harries, head of wind analysis for BNEF. Overall investment in new renewable energy capacity (excluding large hydro-electric dams) in the first half was $132.4 billion, up 5%, with onshore wind and solar both slipping. 

RTC Partners invests in Hull & Associates

Round Table Capital Partners (RTC, New York) has completed an investment in Hull & Associates (Dublin, Ohio), an environmental and engineering consulting firm active in the Midwest and Mid-Atlantic. Founded in 1980, Hull has expertise in site assessment and remediation, brownfield redevelopment, waste management and beneficial use, water/wastewater, renewable energy, and infrastructure design. The company has eight offices in the United States. RTC’s environmental platform will be led by CEO Gerry Salontai who formerly served as chairman and CEO of The Kleinfelder Group, leading the company from $70 million to more than $300 million in annual revenues. “Hull is an exceptional company with great leadership at the top in a highly fragmented industry with increasing tailwinds,” said Salontai. “We are dedicated to building on their history of success through a combination of organic growth and strategic acquisitions.”

KCI acquires Hulsey McCormick & Wallace 

KCI (Sparks, Md.) has acquired Hulsey McCormick & Wallace (HMW, Piedmont, S.C.), a civil and environmental engineering company with three offices in South Carolina. HMW supports public works programs for clients ranging from small municipal and county governments to larger public utilities. The company was founded in 1998 and specializes in water treatment and distribution, wastewater collection and treatment, stormwater discharges, environmental site assessments and remediation design. HMW’s expertise in civil and environmental engineering complements KCI’s existing service lines while helping KCI meet strategic goals for expanding its capabilities in the Southeast. KCI now has more than 100 professionals operating out of several locations in South Carolina. Overall, KCI has more than 45 offices and revenues exceeding $256 million.

David Evans and Associates acquires CHS Engineers

David Evans and Associates Inc. (DEA, Portland, Ore.), a professional services consulting firm of more than 800 people, has acquired the assets of CHS Engineers LLC (Bellevue, Wash.), adding water and wastewater planning and infrastructure design to DEA’s portfolio. DEA will now offer communities and municipalities the full spectrum of services relating to water quality, collection, distribution and treatment. Founded in 1993, CHS has led the design, survey and construction management of a wide range of projects including multi-million dollar water and wastewater projects throughout western Washington. The firm’s clients include cities, towns, special-purpose districts, private water purveyors and land development companies. 

Ramboll publishes “Managing Sustainability” survey

According to a survey of 160 companies conducted by Ramboll (Copenhagen, Denmark), 95% said sustainability is important for the long-term success of their business. When deciding to operate more sustainably, 48% of respondents said they were concerned about minimizing risk, and 49% cited the importance of securing a positive reputation and meeting stakeholder expectations. Strategically, the majority of respondents focused on environmental sustainability with climate change in the lead (83%), followed by chemical pollution (44%), freshwater scarcity and quality (37%) and air pollution (32%). Almost half of companies said they lack the resources and capacities to effectively implement their strategy; other challenges are poor measurability of sustainability-related value creation and concrete benefits (41%), and perceived high investments needs (34%).  

Black & Veatch authors lifecycle assessment of tidal energy

Tidal stream energy has taken a further step towards commercial viability, according to a lifecycle assessment by Black & Veatch of a megawatt-scale array in the UK. The assessment centers on MeyGen’s 6-megawatt (MW) array in Scotland’s Pentland Firth. The report is free and identifies where efficiencies, cost savings, economies of scale and improvements can be achieved. 

Whitney & Associates joins IMEG

Whitney & Associates Inc. (Peoria, Ill.), a geotechnical engineering firm, has joined IMEG Corp. (Rock Island, Ill.). Founded in 1966, Whitney & Associates has served central Illinois for more than 50 years, offering geotechnical engineering services, subsurface and ground water investigations, field and laboratory testing and inspection of construction materials, and other specialized technical services. Whitney clients include engineers, architects, project developers, contractors, and local and state governmental agencies.

Great Lakes announces receipt of $51.1 million in awards

Great Lakes Dredge & Dock Corporation (Oak Brook, Ill.) has announced coastal protection and maintenance dredging awards totaling $51.1 million. The work includes CPRA Cameron Meadows Marsh Creation Project for coastal protection in Louisiana, worth $28.6 million; and Oak Island Beach Project for coastal protection in North Carolina, worth $15.4 million. The Louisiana project involves creating a new marsh using material dredged from offshore in the Gulf of Mexico. The Oak Island project entails placement of excavated beach fill material along approximately three and a half miles of beach, and dune grass planting. Dredging has been deemed an essential service during the pandemic, with work continuing on projects that support the environment, coastlines and infrastructure.

EBJ resets environmental industry outlook for 2020 and 2021

Environmental Business Journal (EBJ) has re-set its annual forecast for the environmental industry, with Covid-19 expected to shave more than $20 billion off the combined revenues of 13 environmental industry segments in 2020. This represents 5% of the $424 billion in total U.S. environmental industry revenue forecast by EBJ in January. With the economy already deeply into recession, EBJ’s pre-pandemic estimate of 3.7% growth now stands at a negative 2-3% for the year. In its Environmental Industry Outlook edition, EBJ reports that while few environmental businesses will emerge unscathed by the lockdown, the environmental industry will fare better than the economy overall thanks to relatively insulated non-discretionary markets like water and wastewater, infrastructure, resource management, public health activities, and a relatively stable base of work for federal agencies.

Summarizing results from its proprietary industry survey conducted in April, EBJ reveals that 56% of project work was completely unaffected, according to over 100 environmental industry respondents, and about two-thirds of delayed projects were still more than 50% staffed by project teams; 7.5% of projects were postponed indefinitely and only 3% canceled. “While commercial real estate and oil and gas will be more severely affected, and expenditures by ‘non-essential’ sectors of the economy are on hold, one can see why much of the environmental industry project community remains pretty much on task in terms of billability and short-term forecasts as of the middle of 2020,” said EBJ Editor Grant Ferrier.”

Available as part of an annual subscription or as a single edition purchase, this detailed journal report presents EBJ analysis and growth forecasts out to 2024 for 13 environmental industry segments, in addition to proprietary survey results ranking clients, media, markets, geography, services, and revenue and margin growth. In-depth interviews with industry veterans reflect on their outlook for the industry and the pandemic’s impact on companies and segments.

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