Mercuria CSR Report 2020 - Flipbook - Page 39
CEO INTERVIEW
Steve Vavrik, Broad Reach Power
| CONTEXT
The energy transition is underway. As the American
power sector hurtles toward a greener, more sustainable future, it is experiencing the growing pains associated with such a seismic, rapid shift. Each successive
push into the renewable frontier brings new challenges,
like resource intermittency and availability, which, if left
unaddressed, threaten to derail the industry’s progress
thus far. In response to this need, a new generation of
agile, technology-forward upstarts has arisen, each with
the common goal of facilitating, and capitalizing upon,
the transition from conventional to renewable energy
that is occurring across the American power sector.
In early 2020, Mercuria joined leading energy investors
EnCap Investments and Yorktown Partners to back
Broad Reach Power, a then-promising new team which,
in the past year, has built a position as one of the leading developers of storage and solar assets in the United
States. Below, we sit down with Broad Reach’s founder
and CEO, Steve Vavrik, to discuss leadership, sustainability and social goals with one of the champions of
the Energy Transition.
| INTERVIEW QUESTIONS:
Introduction:
Q1 | Starting at the beginning, what prompted you to
form Broad Reach Power two years ago?
I’ve been developing and building power plants my entire
career. I like to build things, but also the power industry
is special. It’s not a commodity, its critical infrastructure
with a service ethic. We are reminded of this whenever
the power goes out. So I have been in the power industry
my whole career and shifted over to renewables in 2003
– wind and solar primarily. I’ve worked on or built over
$4Bn dollars of wind/solar plants.
Over the years I picked up on the fact that technology
was decreasing the cost and increasing performance of
wind and solar power. About three or four years ago, the
speed at which these efficiencies were occurring began
to compound. It was clear we were heading toward a
massive change in the market, so we started to look for
the next constraint – where the pain points in the market
were that was holding the transition back – and that is
how we came to storage as a clear winner. At the time it
seemed like everyone was underestimating how quickly
costs of batteries would come down, and how big the
opportunity for storage was with the shift to solar and
wind generation that was already underway. We knew
we would need to act fast, and in large scale, and that is
how the idea to form Broad Reach Power came about.
Q2 | Over the past twelve months, Broad Reach has
grown into one of the preeminent leaders of the
American transition to renewable energy. Can you give
us a brief overview of your business and the strategy
behind your growth?
In my career as a developer in the power sector, the
principal goal of the grid has always been to provide
clean, cheap and reliable power. These objectives are
static, while the technology to achieve them has evolved
over time. With the latest wave or renewable technology,
wind and solar generation assets have been able to
provide clean, cheap power, but the reliability aspect has
always lagged the technology. Frankly, this is why we
have stayed tethered to fossil plants as long as we have;
there hasn’t been a dependable replacement to burning
gas to regulate grid frequency.
But about 2 years ago, we hit an inflection point, where
suddenly lithium ion battery technology got to point
where utility scale batteries could be effectively deployed
as a replacement to the carbon based generation we
lean on to ensure reliability of power supply. This is
where the business opportunity for Broad Reach lies. We
simply take cutting edge battery technology, and deploy
it in the right spots. Put very basically, our strategy is
to identify the points in the grid that would benefit the
most from stabilizing battery technology and install/
operate the assets to provide the technical solution to
a market problem.
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