Episode 105 | Dynamic Districts | Vicinity Energy





In the past few years, several utilities have made pledges to become net-zero carbon emitters by mid-century. These plans typically tilt towards the vague end, as concrete plans are put in place.

Vicinity Energy, the largest operator of district energy networks in the U.S. made a net-zero carbon pledge in late 2020. District energy networks, much like the electrical grid, transports thermal energy—steam and hot/cold chilled water—to multiple buildings nearby through a series of underground pipes. The thermal energy is produced and managed from a central plant, which usually contains boilers, chillers and/or combined heat and power (CHP) systems.

Bill DiCroce, Vicinity Energy’s Chairman, President and CEO, joined the company when it acquired Veolia's North American district energy business in early 2020. Vicinity now operates in 12 major cities around the U.S. These energy systems establish a carbon footprint two ways, electricity on the grid and natural gas (methane) burned in their boilers and CHP units.

Bill says Vicinity plans to decarbonize with a multifaceted strategy:


I was curious, why now?

“Movements start and if they have strong underpinnings they gather speed,” says Bill of the multiple net-zero carbon pledges around the industry, adding, “To be in business you’re going to have to move in this direction.”

Bill cites the confluence of pressure from stakeholders, governments, citizens (particularly younger folks), and district energy customers (institutions and corporations) for the recent decision.

Despite district energy’s smaller footprint, he believes his company could switch to net-zero much faster than utilities.

“We can go to our central plants that feed that heating or cooling network, and we can make a change there immediately, and everyone on our system gets the benefit.”

As a strong supporter of nuclear energy, I had to ask Bill about making that part of their strategy as well. Bill spent 5 years as General Manager of Nuclear Operations at Entergy’s Pilgrim Nuclear Station in Massachusetts. While he is a huge nuclear supporter, he says nuclear plants rarely offer PPAs as renewable energy does. Bill is also concerned that with so many utilities making net-zero 2050 commitments, those pledges could become more challenging as our existing nuclear fleet becomes exhausted.

“There’s a challenge there when the nukes fall off,” he says. “Short of a major paradigm shift in energy storage, that kind of dispatchable asset falling out of the grid portfolio is going to pose a very interesting challenge a couple of decades down the road.”

In addition to the PPAs and fuel modifications, Bill says Vicinity is considering storage, hydrogen and heat pumps (water bodies as opposed to geothermal), similar to Toronto’s Deep Lake Water Cooling system.

“Part of our challenge is, people say, ‘That’s old. That’s a steam business,’” says Bill. “The opportunity to use these districts to really get into the carbon fight is dramatic because it’s a force multiplier."

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