Alan Krause is chair and chief executive officer of MWH Global, headquartered in Broomfield, Colorado. With more than 30 years of industry experience, Krause provides leadership to the worldwide operating companies of MWH while maintaining the organization’s position as the global leader of the wet infrastructure sector. With professional expertise and personal passion focused on natural resources, Krause exemplifies the MWH mission of Building a Better World with a commitment to protect and develop the world’s natural resources in a responsible and appropriate way. He has traveled the world, engaging in dialogue to address the unique challenges facing MWH clients, advancing the organization’s commitment to providing customized engineering, management and construction services to meet client needs.
ICOSA: As the leader of MWH, can you speak to how the company continues to stay relevant and meet the needs of projects in all of the countries where you do business? KRAUSE: Obviously, there are several factors involved in our success. Our success starts with staff that are trained, educated and experienced in the areas that we operate. It is also critical that we have systems in place that connect the resources of the company on a virtual real-time basis so that we can take advantage of the strength of the mass of our capabilities represented geographically across the globe. Like any company, we must constantly be innovating to provide solutions, not only to technical challenges, but also solutions to contracting vehicles, delivery approaches and funding. One of our strengths as a global company with offices strategically situated across the globe is our local understanding of issues. It is this understanding which allows us to have the ability to solve the social issues which oftentimes drive project developments that we work with our clients to address.
ICOSA: Where do you see the future of water infrastructure moving at MWH? KRAUSE: MWH defines wet infrastructure to include both water and energy. We believe that this market space is significant, and it is our intention to stay focused in wet infrastructure, including both traditional and conventional water and wastewater as well as energy-related wet infrastructure. This market will continue to be a cornerstone of MWH’s business strategy.
ICOSA: As MWH takes on new public and private projects, what are the funding challenges and opportunities as they relate to the volatility in global markets? KRAUSE: It is obvious to us, in both our domestic business and our international practice, that in wet infrastructure in general, and specifically as related to water and wastewater, there are significant unfunded needs that must be addressed as infrastructure ages and wears out. The concept of operating until failure is not acceptable for critical utilities such as water and wastewater. As a result, there is a strong movement both in the domestic municipal sector, as well as the private sector, to attract private investment through public-private partnerships (P3) that allow these unmet needs to be addressed. The expected rates from private investment in these opportunities are currently in alignment with the cost of capital for traditional municipal investments. Therefore, these P3 opportunities are becoming more viable. From our perspective, we need to be careful with where we operate under these investment schemes and have a strong sense of comfort in the funding source.
ICOSA: What part of your core business do you think will take MWH into the future? KRAUSE: We are a company of approximately 8,000 professionals that historically is dominated by engineers and scientists. While the markets that we operate in are competitive and complex, we certainly believe that our strong group of engineers and scientists will be a major underpinning force as our company grows into the future. We must, however, be prepared to take our workforce and educate them and equip them to address more and more complex and challenging issues that bring higher value to our customers. As a result, we expect our staff to grow with our clients, learning new skills relative to delivery, efficiency, quality and innovation that will take us into the future.
ICOSA: How does MWH strive to meet the social, environmental and economic needs of the people in the locations where their projects are? KRAUSE: By focusing on attracting and retaining professionals who appeal to our core values and purpose of Building a Better World, we are able to develop a workforce and culture that strives to meet today’s more challenging needs. Just one example of this is waste by-products from wastewater treatment facilities. These by-products used to be considered a cost and liability. Our professionals have embraced the social, environmental and economic impacts associated with operating a wastewater treatment facility and have worked hard to ensure these by-products are now viewed as an asset, containing nutrients and energy that can be cost-effectively repurposed and utilized for a benefit.
ICOSA: What stands out to you as a challenging, innovative or game-changing project in one of your service areas? KRAUSE: Our ongoing work and role in the design and construction of the Panama Canal Third Set of Locks Project certainly meets those criteria. Working on an engineering project of that scale and magnitude offers a wide variety of challenges and opportunities. By combining our talent and knowledge network, we were able to develop a wide variety of technical innovations, such as the unique approach for the water-saving basins, which reduced costs and will improve operations. The project also allowed us to showcase the diverse capabilities of our professionals and take advantage of our global footprint by completing the design activities within a very aggressive schedule through our office network and a 24-7 production approach.
The Panama Canal represents a world-scale, heavy civil engineering project that will connect the Western and Eastern Hemispheres of the world through engineered locks capable of taking the largest vessels in the world today. We have used a variety of very innovative approaches to design, including three-dimensional design, as well as extremely innovative water-saving basins which allow the preservation of precious water resources that are required to fill and empty the locks that allow ships to pass.
ICOSA: In an interview with Alaska Business Monthly, you said the Panama Canal will change global trade. Based on MWH’s project involvement, what type of change do you foresee? KRAUSE: From a trade perspective, the Panama Canal will allow post-Panamax vessels, which today compose approximately 35 percent of the maritime fleet that moves goods and services around the globe. With the ability to pass post-Panamax vessels, it is estimated that somewhere between eight and 10 percent of the world’s trade will pass through the new Panama Canal on an annual basis. The effect of this will be felt in the Gulf Coast and Eastern Seaboard of the U.S. However, these larger vessels will require infrastructure improvements to load and unload vessels, as well as dredging that will allow vessels to pass through with deeper drafts. There are also several side benefits to the Panama Canal Third Set of Locks Project. Obviously, the first and foremost benefit is reduced energy consumption by avoiding the long circuitous route around the tip of South American, which is approximately 8,000 miles. As a result, the amount of energy consumed to move freight from one hemisphere to the next will be greatly reduced.
ICOSA: Hydropower is the number-one renewable power resource in the United States. Moving into the future, do you see wind or solar rising to meet power needs like hydropower currently produces? KRAUSE: Wind and solar both have their place in a national renewable energy generation portfolio, but neither can provide the same benefits and value that hydropower provides, such as enhancing grid reliability and the availability of peak energy. Both wind and solar are intermittent resources that cannot be easily dispatched on demand, so both need to be “firmed up” using other power generation sources such as hydropower and especially hydro-pumped storage so that the energy is available when it is needed and not just when it can be generated. Because of potential adverse impact on grid stability and other factors, the total amount of energy generated by wind and solar is necessarily constrained, whereas hydro has no such constraints and actually enables more wind and solar to be developed by providing benefits to the grid. The Department of Energy assessments indicate that water power can potentially provide 15 percent of our nation’s electricity by 2030, up from about six percent today.
Additionally, both wind and solar are currently not economical options without government subsidies where hydropower has proven to be economical on its own. This can be seen during the recent expiration of the Production Tax Credit (PTC) where new wind and solar development slowed significantly. The plant equipment continues to get cheaper, but it is still not viable, and this gets more complicated by the lack of transmission capacity and who needs to pay for the upgrades. A vast majority of potential utility-grade wind and solar installations are located far from the load centers in the U.S., and this means major new transmission lines are required to deliver the power. If the wind and solar installations are burdened with the cost of transmission, even with the PTC, many projects become uneconomical. Hydropower has none of these problems and in fact, in many instances, is part of the solution because hydropower is the most stable and fastest responding type of power plant in the world. In many regions of the world hydropower is considered almost a transmission asset and is the first responder in the event of any instability in the grid.
ICOSA: How are new technologies moving hydropower projects forward? KRAUSE: New technologies are moving forward on several fronts, making water-power projects more attractive than in the past. Already the most efficient and most reliable form of power in the world—the hydropower industry—has turned its energy to improving the long-term sustainability of both large and small hydropower projects and dams by reducing the environmental impact. For conventional hydroelectric projects, advances in turbine runner designs are leading to “fish-friendly” turbines—those higher-efficiency machines that help improve water quality. Moreover, fish-friendly turbines reduce fish injury while maintaining current levels of energy production.
Advances in analysis techniques, such as computational fluid dynamics, have allowed engineers to optimize turbine runner designs to achieve higher efficiency and stability over larger operating ranges, and increasing the amount of energy generated by these plants. These improvements have also led to the design of aerating runners that can improve water quality by enhancing dissolved oxygen downstream of the project.
Many other improvements have been made through enhancements in the civil works that allow for the management of water temperatures and dissolved gases at the dams through multilevel intakes, new gates and new fish passage facilities while actually reducing spillway releases and using the turbines more often. This can most clearly be seen by all the recent success in the Sockeye Salmon run on the Columbia River. During 2012, records were shattered when more than 400,000 sockeye salmon returned to the Columbia River. The fish passage numbers on the Columbia, including the multiyear trend, are a definite indicator that the industry is moving in the right direction environmentally, and that this has been happening over time because today’s results required successful downstream passage five to seven years ago.
The Department of Energy (DOE) is currently funding 16 research and development projects that will help advance hydropower development in the U.S. The projects cover a wide range of topics, from extracting energy from irrigation canals and low height dams to using reservoirs for energy storage. The DOE has ten projects in the sustainable small hydropower category to research, develop and test hydropower technologies that can be deployed at existing or constructed waterways. Advances in pumped-storage technology revolve primarily around adjustable speeds in the pumping mode. The power absorbed can be varied at fixed head, permitting a grid frequency regulation, even in pump mode. The efficiency and operational flexibility of pumped storage hydro is substantially increased with adjustable speed units.
In addition, there are significant advances being made daily in the areas of kinetic energy machines, wind energy and tidal energy. Marine and hydrokinetic (MHK) technologies, which generate power from waves, tides or currents in ocean waters, are at an early but promising stage of development. Many coastal areas in the U.S. have strong wave and tidal resources close to areas with high-energy demand. With widespread deployment, these technologies could make substantial contributions to our nation’s electricity needs. Two recently released resource assessments show that waves and tidal currents off the nation's coasts contain enough energy to provide more than one-third of our nation’s total annual electricity usage. To advance the development of these promising technologies, the DOE funds research and development of MHK technologies, including laboratory and field-testing of individual components up to demonstration and deployment of complete, utility-scale systems.
On the cost-reduction side, MWH is using many new advances to speed construction and reduce the cost of large projects while simultaneously improving the safety for flood and earthquake events with technologies such as “Roller Compacted Concrete Dams” RCC and Hardfill dams.
