The US government hopes to galvanise a wave of grid infrastructure investments with financial support and new legislation. Meanwhile, logisticians located well away from the seaboards are increasingly being called upon to move some of the heaviest loads, writes Gregory DL Morris.
Piles of money can only help so much when the task is to rebuild the car while driving in the race. That is the challenge for the USA’s electrical power distribution system. There has been much attention in these pages about ambitious development of offshore wind energy. However, those headline gigawatts are not going anywhere if they cannot be brought onshore and out to homes and businesses.
Given the size and weight of generators, transformers and cable reels, the heavy lift and project cargo supply chain is preparing for a massive and complex increase in business. That is taking place as the country continues its halting efforts to rebuild civil infrastructure. While that is very much an opportunity for the logistics business, it is also a route-limiting factor.
In response to that, as well as to the growing size and value of modules and components, project planners are increasingly staying on the water as long as they can, offloading directly from ship to barge and getting as close to final delivery as the head of navigation will allow. That is opening new opportunities for smaller, inland cranes, riggers and carriers.
National policy priority
Some of those have already been working on utility projects for years, but the national grid upgrade is a new national policy priority. “Transmission is a factor in most constraints on renewable deployment,” said a recent analysis from Deloitte, “regarding the top cost constraint survey respondents identified.”
Insufficient capacity drove up grid congestion costs by 72 percent in 2022 over the previous year to USD20.8 billion, Deloitte found. Inter-regional and regional transmission would need to more than double and quintuple, respectively, to meet high clean-energy growth projections by 2035.
It is expected that programmes and grants from two major pieces of legislation – the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act – could start tackling transmission issues this year. According to Deloitte, those include the plans from the Department of Energy (DoE) to accelerate high-voltage transmission line permitting, USD3.9 billion in grants from the Grid Resilience and Innovation Partnerships Program (GRIP), and USD1.3 billion in grants for three inter-regional grid projects.
Another important element of the legislation is requirements for domestic manufacturing. The degeneration of US heavy manufacturing over the past half century has been much criticised, but little has been done to reverse that until recently. The repatriation of manufacturing to the USA and adjacent countries is increasingly being supported with a variety of tax credits, other incentives and outright requirements.
Deloitte calculated that since the Inflation Reduction Act passed, companies have announced USD91 billion of investments in more than 200 manufacturing projects, including USD9.6 billion in 38 solar projects, USD14.4 billion in 27 grid storage projects, USD1.4 billion in 14 wind projects and USD54 million in six hydrogen projects, closely tracking investment levels in their respective renewable energy sources. “These projects’ shortened supply chains could increase transparency and resilience while decreasing emissions and exposure to geopolitical vicissitudes,” the analysis noted.
We are just looking for consistency. Those inconsistencies do not just create delays, they also create truck parking complications- Chris Smith SC&RA
“Our members have been moving utility components for decades,” said Chris Smith, vice president of transportation for the Specialized Carriers and Rigging Association (SC&RA). “Nine times out of 10 any power-generation project has oversize or overweight components. The last few years have been more highly variable than usual – because of the pandemic, global supply chain issues and inflation.”
There is an expectation that business will start to increase this year and accelerate through the next few years as both government and private capital flow into infrastructure, electrical distribution in particular.
Rebuilding the grid
The rebuilding of the grid was a significant topic of SC&RA’s annual Specialized Transportation Symposium in Houston during February.
One constant challenge for the SC&RA is permit harmonisation. Among the fractious US states, it is not unusual for one state to mandate project cargo moves over the road at night, and the next state to prohibit it. “We are just looking for consistency,” said Smith. “Those inconsistencies do not just create delays, they also create truck parking complications. Those rolling externalities extend beyond timing, size and weight, to time of year and availability of equipment.”
Grid work is commissioned by a variety of clients. “Usually, the private utilities handle the operations on the ground,” said Smith. “They may be doing the work for themselves, and sometimes they may be doing the work for a larger organisation. In some cases the shipper may be the project manager for the transportation.”
A tactical consideration for project shipments over the road that is rising to the level of policy is the need for pilot vehicles. Several major manufacturers of wind power equipment have created a pilot car certification programme that has proven to be a mixed blessing for project cargo carriers. “In terms of safety, the standardisation is great,” said Smith. “And the training has a good curriculum. On the other hand, recertification is required every three years and the process is time consuming. The certified operators also charge a premium.”
Growing investment
There is also growing investment in transmission infrastructure by major power users. Smith cited a calculation from one of the major US eastern utilities that 40 percent of the growth in demand for power in the coming years will be from data centres.
Those have raised opposition in some cases, especially when new data centres are being planned in or near areas that have been preserved for their natural or historical importance. So, while not all projects will be approved, it should not surprise any crane or trucking company to get inquiries from new and different clients.
Those clients are also contacting project forwarders, crane companies and riggers because of a trend for shippers to favour moving heavy loads as far as possible on the waterways. That is not new, but the trend has been accelerated by the growing size and weight of modular construction components.
“Inland states are now having to think about global project freight,” said Smith, “in ways they never had to before. Our organisation recently supported a bill in the Iowa state legislature that was necessary because a big energy company wanted to move some large equipment by barge up the Missouri River and needed local and state accommodations.”
We are moving some very big diesel generators. The average load is up to 270,000 Ibs (122.5 tonnes)… We handle the full transportation from manufacturers all over the country. - Charley Reilly, Palco Transportation
New transload sites
The net effect of that trend means almost any land adjacent to navigable water, coastal or inland, could potentially be a heavy lift transloading point. “We are thrilled at that prospect,” said Smith of his member companies. “We can move anything anywhere.” The only questions are cost, timing and permitting.
In addition to the two major drivers of grid work in the US – greenfield and brownfield expansions for renewable generation, as well as normal maintenance and upgrades – another growing segment for heavy lift and project cargo is the surge in construction of data centres. “There has been a huge push to build those, especially around the Delaware-Maryland-Virginia area,” said Charlie Reilly, logistics and operations coordinator for Palco Transportation. That firm is based outside Trenton, New Jersey, near the border with Pennsylvania.
“We are moving some very big diesel generators,” said Reilly. “The average load is 250,000 lbs (113.4 tonnes) up to 270,000 lbs (122.5 tonnes), and 15-16 ft (4.5- 4.9 m) tall. We handle the full transportation from manufacturers all over the country. Once on site the lift into place is usually the responsibility of the shipper or the customer.”
Beyond that Palco is fielding “multiple inquiries a week for grid work,” said Reilly. “We are working on quotes, budget information, and proposals for transformers and all kinds of substation equipment.” The company is also actively seeking wind power shipments. “The goal for the industry is to bring manufacturing to the USA and we are trying to build a name for when that does happen. We are also looking into several aspects of warehousing, cranes and rigging.”
Influx of transformers
Transformers continue to be an important source of business, with a large number moving by rail. “We are seeing a huge influx of transformers being bought and stored,” said Ross McLaren, partner in HLI Rail & Rigging. “We have a few hundred in storage and just got a call from an Asian manufacturer to store quite a few more. We have three storage yards – all in Texas (San Antonio, Laredo and Pearland outside Houston) – but there are transformers being stored all over the pace. The work [moving and storing] is being commissioned by shippers, buyers, utilities – a mixed bag.”
Transformer movement and storage is a key business for HLI, which is based just north of Philadelphia. The company owns two 20-axle railcars, one 16-axle and one 12-axle. It also buys and sells transformers as an adjunct to moving and storing. It does some general heavy haul work, some road but mostly rail. HLI has an office in Guanajuato, Mexico, and a European business development agent in the UK.
Given the domestic requirement for some infrastructure funding, McLaren noted that there is some transformer manufacturing in the USA, mostly for the smaller and mid-sized units. “Overall, we see transformers getting bigger and heavier. And for the large transformers you have to go to Europe or Asia.”
We are seeing a huge influx of transformers being bought and stored. We have a few hundred in storage and just got call from an Asian manufacturer to store quite a few more.- Ross Mclaren, HLI Rail & Rigging
As an example, an overseas client shipped a 660,000 lbs (299.4-tonne) transformer to Charleston, South Carolina, in December 2023. HLI received the transformer at the port, loaded it onto a 16-axle railcar quayside, and sent it to Rock Hill, South Carolina. The utility company offloaded the unit and organised delivery to its final destination.
Expanding the scope of heavy lift services
Steven Sarens, managing director of projects, based in Houston, for the eponymous company, has done little work for grid-related projects. “There are plenty of local companies that are qualified and have the capabilities to handle that type of work. Many of our current projects have been in relation to offshore wind development,” he explained, “particularly at the marshalling ports in the USA and Canada receiving and loading out components.”
In addition to the offshore wind sector, another big area for Sarens is the process industries: oil, gas, and chemicals. “There is a lot of development in green and blue hydrogen and ammonia, as well as lower-carbon or greener fuels. The timelines are long, but the first projects are on the books.”
For example, Sarens started bidding on a project in Louisiana three years ago. It was awarded the contract last year for work that will begin in two years. “More and more we see owners working directly with us,” said Sarens. “That is an interesting development. We still work with plenty of engineering and construction companies, as well as freight forwarders, but increasingly we see the owners wanting to keep things in hand.”
Given the number of developments under way, and the few large global project cargo firms, it is not unusual for two of them to be working on different aspects of the same development. For example, the Vineyard Wind project off Massachusetts, being built out of New Bedford. Sarens is handling the loading of components in Europe and unloading at the marshalling yard; Mammoet is loading from the port onto feeder barges, operated by Foss Maritime, that transport the components to the installation vessel offshore.
New requirements
As the nature of work and of clients changes, Sarens is changing as well. “Our scope is expanding,” said Sarens. “We are handling barging, and we are building the levee crossing for the project in Louisiana. That is a very big change for us.” He added that the company might even consider operating its own US-based barges and tugs but that is prohibited under the Jones Act.
Another important trend in heavy lift is project managers’ preference for moving larger loads as far as possible by water. Increasing size and weight of modular components has been a trend for several years. Several other factors have changed recently, including the broader capabilities of the heavy lift operators, greater capacities of ship’s equipment, and also the increasing technical and operational capabilities of inland crane and rigging firms.
“We still do a lot of work in the major heavy lift ports, including Houston, New Orleans, and Norfolk [Virginia],” said Sarens. “But increasingly we are able to skip the port infrastructure entirely. We offload the deepsea heavy lift vessel directly onto a barge and stay on the water to as close as we can get to the jobsite before the final transload to land transportation.”
Port infrastructure becomes less important as long as an offload point can be found or created, Sarens explained. While route surveys have long involved road and rail clearances, as well as weight tolerance, from the heavy lift port to the jobsite. The new additional calculation is the closest head of navigation and possible road or rail connections to the delivery.
We say there is nothing too heavy and nothing too high. The limitation is not size or weight but cost. -Steven Sarens, Sarens
The addition of inland water and civil engineering capabilities gives owners and project planners new options as well. “In the Louisiana project, the owners asked if we could move a 3,000-tonne module over the levee. We said we could do it, but it would be very expensive. They opted instead to move three 1,000-tonne modules.”
That collaborative decision-making underscores the importance of the project logisticians and heavy transport engineers being involved early in the planning. “We say there is nothing too heavy and nothing too high,” said Sarens. “The limitation is not size or weight but cost.”
Getting a GRIP
Administered by the Grid Deployment Office (GDO) and funded by the Bipartisan Infrastructure Law, the aforementioned GRIP programme aims to enhance grid flexibility and resilience against growing threats of extreme weather and climate change while supporting meaningful community and labour engagement, as well as investing in the domestic workforce.
In October 2023, DoE announced up to USD3.46 billion in the first round of GRIP funding, covering 58 projects across 44 states to strengthen electric grid resilience and reliability across America. The latest funding round (USD3.9 billion) focuses on projects that will improve electric transmission by advancing interconnection processes for faster build out of energy projects. GRIP will provide USD10.5 billion over five years to accelerate the deployment of transformative projects that will help to ensure the reliability of the power sector’s infrastructure.
Big Wires Act
A bill that could be the next big chunk of federal legislation is currently working its way through Congress. This being a divisive election year, nothing can be taken for certain, but the ‘Big Wires Act’ is arguably the most ambitious expansion of the US transmission grid in a generation, according to a report released in February written by Joshua Rhodes, Abraham Silverman and Zachary A Wendling for the Center on Global Energy Policy (CGEP) at Columbia University in New York.
“Recent congressional legislation has the potential to accelerate the construction of new electricity transmission projects that cross existing electric grid boundaries,” said the report. “These inter-regional transmission projects provide a host of benefits, but building them has proven to be exceptionally difficult.”
More than a third of all fuels consumed in the USA is used to make electricity, according to the CGEP, but the electricity sector struggles to move that massive amount of energy from where it is produced to where it is needed. In its recent National Transmission Needs Study, the DoE found that expanding the links between fractured electric grids could achieve a policy win trifecta: increased grid reliability, particularly in the face of increasingly extreme weather, reduced energy prices for consumers, and a faster shift to clean energy.
“Despite these benefits, regulators have struggled to coax grid operators to collaborate on projects that move electricity across existing electric grid boundaries,” said the report. “Indeed, the GDO recently reported that the pace of inter-regional transmission construction has slowed to a crawl; from 2011 to 2020, the current planning system managed to energise an average of only 72 circuit-miles of new lines per year.”
Despite these benefits, regulators have struggled to coax grid operators to collaborate on projects that move electricity across existing electric grid boundaries.- DoE Grid Deployment Office
Legislative progress
In September 2023, senator John Hickenlooper and representative Scott Peters re-introduced the Building Integrated Grids with Inter-Regional Energy Supply Act, or the Big Wires Act, in both houses of Congress. As with an earlier version of the bill, announced in May, the legislation authorises and directs the Federal Energy Regulatory Commission (FERC) to establish minimum requirements for inter-regional electricity transfer capabilities within continental USA.
The Big Wires Act sets minimum transfer requirements between regions and mandates that utilities work together to make those connections a reality.
Minimum transfer requirements ensure that regions can import and export from other regions a certain percentage of their peak hourly electricity demand – that is, the highest amount of electricity used by customers in a single hour over the course of a year.
