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      Bill DiCroce of Vicinity Energy

      We Spoke to Bill DiCroce of Vicinity Energy

      As part of my series about the “How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies” I had the pleasure of interviewing Bill DiCroce.

      As the President and Chief Executive Officer (CEO) of Vicinity Energy, William “Bill” DiCroce leads the largest portfolio of district energy systems in North America. He has over 35 years of experience in management, leadership and operations/engineering with some of the largest energy and environmental companies in North America. Bill previously served in executive leadership roles for Veolia’s energy, water and waste companies, including President and CEO of Veolia North America. Bill earned a bachelor’s degree in Marine Engineering from the Massachusetts Maritime Academy and an MBA from Boston University.

      Thank you so much for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

      Thanks for having me, Charlie. I’ve always been someone who is passionate about engineering and the ocean. However, when I was ready to graduate from the Massachusetts Maritime Academy with a degree in Marine Engineering, I realized that the merchant marine industry was in tough shape. So, I pivoted. I had an opportunity to work with General Electric at the Knolls Atomic Power Laboratory. As a certified nuclear power engineer within the U.S. Naval Nuclear Propulsion program, I trained navy officers and enlisted personnel how to operate Navy nuclear reactor plants — basically submarines. From there, I entered the commercial nuclear power generation industry and held a number of positions within Boston Edison and the Entergy Corporation. I also served as president and COO of NSTAR Electric and Gas Company’s unregulated subsidiaries. I joined Veolia in 2008 and served as president and CEO of Veolia North America before joining Vicinity as president and CEO in 2019. Vicinity Energy split off from Veolia at the tail end of 2019 and is the owner and operator of the largest portfolio of district energy systems in the nation.

      Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

      When I was studying marine engineering at the Massachusetts Maritime Academy, I was with 600 cadets on a training ship in the Mediterranean and was responsible for overseeing the water plant. We were entering the port at Piraeus, near Athens, and we all wanted to get off the ship, so my junior cadet and I started work early to prepare for entering the busy harbor.

      The next thing I know, a senior officer comes up to me and says, “What did you do?! We’re losing propulsion, and the plant’s going down!” In other words, we were about to lose control of maneuvering the ship in one of the busiest ports in the world. It turns out the junior cadet, whom I’d been supervising, had shut down an auxiliary system that jeopardized the main propulsion. Luckily, we worked together to fix it just in time to regain control.

      My takeaway from this experience was that it’s important to have confidence in the people you supervise, to give them a little rope. However, you need to give people enough rope to learn, but not enough to hang themselves! That stuck with me throughout my career. As a leader, you have to take ultimate responsibility and be willing to jump in and support your team when needed to help them be successful.

      None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

      When I was working at Pilgrim Nuclear Station as a systems engineer, George Davis became an important mentor of mine. He was a really impressive guy: a decorated U.S. Navy admiral who’d later go on to become president of NSTAR. He took notice of my work and an interest in me. I can’t overstate how much that meant to me, and how it influenced me for the better. He checked in on me, cared about how I was, invited me to dinners with his wife, and always offered encouragement and moral support. It was a huge boost to my self-confidence.

      It really inspired me to try to do that myself, as I’ve grown in my career. To take interest in those just starting out and help them along, encourage them and help them reach that next career step. I hope it makes a difference to others, like it did for me.

      Extensive research suggests that “purpose-driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?

      Vicinity split off from Veolia at the end of 2019, becoming America’s largest district energy provider. We are extremely purpose-driven, and our mission revolves around three core concepts: reliability, resilience and sustainability. We also recently announced a new commitment to reach net zero carbon emissions by 2050. It’s my personal mission to lead Vicinity through this clean energy transition.

      Thank you for all that. Let’s now turn to the main focus of our discussion. Can you tell our readers a bit about what your business does? How do you help people?

      Vicinity Energy produces and distributes steam, hot water and chilled water directly through our vast network of underground pipes to provide heating, cooling, humidification and sterilization to over 230 million square feet of building space nationwide. Our customers include hospitals, museums, universities, laboratories and other critical facilities that rely on us to support their important work, whether that’s saving lives, preserving priceless art or developing new medical technologies.

      That’s why our mission of reliability, resilience and sustainability is so crucial. Reliability is essential in an emergency room. A critical care facility cannot do without sterilization of medical equipment, not even for a moment. Resilience to a university means keeping its students safe and warm, even in an ice storm when the power goes out, or a biopharmaceutical company that is working on the next important life-saving vaccine that cannot afford to have precious research lost due to an outage. And sustainability is the responsibility of all of us. In order to protect our planet for future generations, we need to provide our customers with reliable and resilient, environmentally responsible energy, while operating our energy operations sustainably, with care and consideration for the well-being of the communities we serve.

      Which technological innovation has encroached or disrupted your industry? Can you explain why this has been disruptive?

      Luckily, a lot of companies have realized that the future of the energy industry must be forged with sustainability as a central tenet. Cities, states and policy makers also understand this, and are passing aggressive new guidelines and mandates to pressure industries to reduce their emissions.

      Over the years, Vicinity’s systems have evolved many times to integrate advancing energy technologies and respond to more stringent environmental regulations and expectations from communities where we operate. When energy districts were first laid out over 100 years ago, they were fueled by coal. In the 1950s, there was a switch over to oil. In the 1990s, most districts transitioned to natural gas. Since then, we’ve integrated innovative combined heat and power (CHP) technology to improve efficiency and reduce environmental impacts.

      Now, we’re standing at that next inflection point. Where do we go next? With the influx of renewable energy and the increasing concern around climate change and demand for energy reform, we have to rethink who we are as a company and forge a path toward even greater sustainability. Thankfully these variables have converged and are helping to move us and the entire energy industry toward a greener path.

      What did you do to pivot as a result of this disruption?

      How did we face this disruption? We rethought ourselves and took action!

      Becoming more sustainable, while we maintain our laser focus on reliability and resilience, is a top priority of ours. The only way to keep up is to innovate ourselves.

      Here are a few key ways we’re doing that:

      • Replacing conventional fossil fuel oil with biogenic fuels: We just partnered with a company that collects waste vegetable oil from the restaurant and food industry in Boston and Philadelphia and converts that waste oil into net zero carbon fuel. With it, we will completely replace our use of fuel oil, representing 2.5 million gallons of oil consumption that we’re eliminating annually.
      • Electrification: In place of natural gas-burning boilers, we will install large-scale electric boilers that will convert electricity to steam. They’re 100% efficient, so all the energy that goes in from electrons, comes out the other end as steam, with no heat loss. We will start with a few electric boilers and scale up as renewable power sources like offshore wind become more available and cost-effective.
      • Heat pumps: Today, we have to preheat feed water before it enters the boilers of our CHP plants to turn this water into steam. Preheating accounts for about 10–15% of our total methane burn. We’re preparing to install a large-scale industrial heat pump, the kind that has never been installed in the U.S. before but has been very successful in places like Sweden. Using heat pumps to preheat our feed water will reduce our carbon emissions between 25–30 thousand tons per year at our Kendall Station facility in Cambridge, Massachusetts, New England’s largest CHP facility.
      • Energy storage: Sometimes, energy demand and supply are well-matched. For example, offshore wind power is most available in winter, which is also when demand for thermal energy is highest. With energy storage, we can take advantage of abundant energy when it’s inexpensive and store it for use when the demand is high. We will install large-scale batteries in our facilities that will allow us to optimize our dispatch, so we can buy power when it’s available and cost-effective, store it, and then convert it into steam when we need it.
         

      Was there a specific “Aha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.

      In many of the key cities where we operate, city and state governments are leading the charge to green communities. And how energy in these communities is produced is a big part of that conversation. For example, in Boston, city and state leadership is heavily pushing industry toward electrification. The notion is that if you look to the future, between large-scale hydroelectric and offshore wind, there’s going to be a large amount of renewable power available at a reasonable price point. Spurred by this government leadership, we knew we needed to reexamine our operations at Vicinity. We really looked inward and rethought how best to operate — not only to meet city and state expectations, but also because greening our operations is the right thing to do.

      We looked, for example, at our Kendall Station facility in Cambridge, Massachusetts, which is a 300MW substation and the largest CHP plant in New England. Today, we burn natural gas there, to make electricity — some of which we use, and some of which we sell on the grid. But as we thought about this, we said, ‘Wait a minute, we can do the opposite. If we can put power on the grid, we can take power off the grid in order to electrify our system.’ Through our CHP, we have access to wholesale electricity. We have nearly 30 miles of energy distribution through underground pipes in Boston and Cambridge. We heat and cool 65 million square feet of building space in both cities. If we swap in electric boilers at Kendall Station, we can instantly pass on incredible carbon emissions savings to our customers. It’s a plug and play, low-cost energy solution for buildings to meet their sustainability goals.

      It was a huge “ah ha” moment. We realized that we have everything it takes to be the ‘easy button’ for customers wanting to get greener. By flipping the direction by which energy flows through our system, we can dramatically green our energy supply and the communities where we operate — and fast.

      So, how are things going with this new direction?

      We’ve already seen great progress. We’ve begun our partnership for biogenic fuels in Philadelphia; we’re collecting 600,000 gallons of waste vegetable oil each year, which also saves all of that waste from coagulating in landfills or clogging up sewers. We’re also working closely with city and state governments across the country to take advantage of future renewable power on the grid to reduce our reliance on methane.

      Building a more sustainable energy system takes time. Some of it can move very quickly; as with biogenic fuels, and we expect to install electric boilers over the next 2–3 years. Other moves, such as transitioning to future fuels like hydrogen, will take more time. But the important thing is to start building that bridge now, so we can all benefit from a greener road in the future.

      Can you share the most interesting story that happened to you since you started this pivot?

      District energy with cogeneration, or CHP, has always been green, relative to other methods of power and energy generation. It’s the greenest and most efficient way to burn fossil fuels to produce power and thermal energy. But sometimes, once people hear “fossil fuels,” they don’t want to hear any more. Even if we’re offering the greenest, most cost-effective, practical option for the moment: people don’t want to hear it since it involves fossil fuels. And you’re not going to get anywhere with a message people cannot and do not want to hear.

      So, we had to do a lot of rethinking about our approach and decided to go ‘all in’ on greening. Once we started thinking in those terms and speaking that language, it opened up a lot of doors and conversations that had been closed to us before.

      The key was that we listened, reinvented our plan and, in turn, our messaging. If our approach isn’t working, it’s time to change your approach.

      What would you say is the most critical role of a leader during a disruptive period?

      Be bold!

      You must take risks. You must make statements and proclamations. Things may not all work out exactly the way you lay them out, but you need to be bold with your vision and form a stable platform and general pathway for others to help realize your vision.

      Half-measures don’t motivate people. It’s when you take risks, commit yourself to a new direction, and lay the groundwork, that people join in.

      When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?

      You need to provide a path forward that people can envision. You need to paint enough of a picture that people can see it, and picture themselves in it. That means you need to be specific enough that people can clearly see their destination and bring their own ideas and skills to help you create the roadmap to get there. I’m lucky to work with an incredibly smart, hard-working team of people at Vicinity that have not only supported our new path forward, but have jumped in with both feet!

      Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?

      Integrity.

      At the same time that we went ‘all in’ on our green energy plan, we also provided reasonable milestones and guidelines for execution. If you don’t give realistic direction, it can just sound like “green washing.” You have to have a bold goal and a real, actionable strategy for reaching that goal that people can feel confident about and want to help you execute. And most importantly, you need to believe in the goal yourself. As former president Dwight D. Eisenhower once said, “The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office.”

      In the energy business, there are so many options and many competitors. If people don’t believe in you, you’re done for. You need to have integrity in everything you say and do if you’re going to stand up to scrutiny and disruptions. People want to work with people and companies that they can trust.

      Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?

      I can speak to this very well, because we were on a different track before we made a strategic pivot in our direction:

      1. Keep hanging onto the anchor. An approach or philosophy may have anchored you for a long time, but at some point, it’s going to pull you under. Even something good that’s solid and proven is not always going to carry you into a future state. Even if your whole business has been built on that. You have to know when to adapt and pivot.
      2. Lashing out at the alternatives. It discredits your ability to change. Don’t get mad: evolve.
      3. Being a compass. You must pick a direction. You need to adapt. You need to have credibility and choose a direction that’s meaningful to your business and that people can gravitate to.
         

      Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies? Please share a story or an example for each.

      1) Know when to adapt and pivotAs I noted in a previous example, the leadership of cities and states to green their communities has been crucial to our evolution. While natural gas-fired CHP is by far the most efficient method of burning fossil fuels to produce low-carbon energy, the fact that its primary fuel source is a conventional fossil fuel has been a barrier to wide-scale adoption — and frankly, how city and state leaders perceive our energy solution. By recognizing this roadblock and embracing this feedback, we’ve been able to look beyond what was ‘business as usual’ in the past and devise new renewable strategies in our fuel mix and technology to realize a greener, and more widely accepted energy product.

      2) Be bold. Change is hard. There is a reason why ‘ripping the band-aid off’ is a powerful saying and often the best solution to a problem. Instead of embarking on a prolonged painful journey, we’ve boldly and rapidly forged a new one.

      3) Be the change you want to see. In order to lead in the face of change or disruption, and do it effectively, you need to not only own the new path or idea you’ve outlined, but also live in that new vision authentically. You need to really stand behind that vision, otherwise people will not embrace it. As I mentioned before, integrity is a big part of this. If you don’t honestly believe the story you’re telling, no one else will.

      4) Do more listening than talking. Like I said before, it was when we really started hearing more and more about electrification and its growing adoption in government leadership and industry circles, we knew the old way wasn’t going to work anymore — and by that, I mean continuing indefinitely to use fossil fuels in our operation. Of course, this shift won’t happen overnight, however, we are making bold moves towards this end goal. For example, converting our natural gas boilers to electric at Kendall Station will enable Vicinity to harness the renewable energy that continues to innovate and transform the electric grid. This will allow us to rapidly apply these carbon savings across the communities in which we operate. Rather than multiple individual buildings converting to electric boilers (at a tremendous cost), we can make this happen at our central energy facilities, and each building connected to our district will reap the carbon reduction benefits. District energy is a powerful tool to decarbonize our cities. We had to do more listening than talking to be able to fully see the opportunity and potential that we hold at our fingertips!

      5) Create a vision and a navigable destination. A vision is only a vision when you have people to help you make it a reality. And for people to help you do this, they have to see the possibility and buy into it. Through creating clear goals, a strategic plan and empowering those around you, you can collectively navigate the path to reach your vision. Good leaders generate excitement around a new idea and embrace all levels of the organization in the process to achieve unity and motivate the tenacity required to turn an idea into reality. The path needs to be a navigable one, but you also need to achieve wide-scale adoption of your vision to not only achieve your goals, but to push through times of uncertainty.
       

      Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

      I’ve always been inspired by Teddy Roosevelt’s quote, “The Man in the Arena”:

      “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

      You can sit on the sidelines and throw darts all you want. It’s the people in the sand that are going to change the world or change the energy industry. Personally, I’ve always been one for the sand.

      How can our readers further follow your work?

      The Vicinity Energy blog has a lot of great information about sustainable technology developments and how communities can engage with us to keep greening America’s cities. You can also follow us on LinkedInTwitter and YouTube.