EITF October Assistant Secretary of the Army (Installations, Energy & Environment) UNCLASSIFIED

Transcription

1 EITF October 2013

2 Army Energy Consumption and Investment United States 97,301 Trillion Btu Federal Government 1,116.6 Trillion Btu DoD Trillion Btu U.S. Army Trillion Btu 1% 80% 21% Facilities Vehicles & Equipment (Tactical & Non-tactical) 68% 32% 78% 22% 60% 40% Army FY 2011 Energy Budget $5B FY 2012 Army Energy Expenditures Liquid Fuel $3.6B Facility Energy $1.2B Sources: Energy Information Agency 2011 Annual Energy Review, September 2012; U.S. Army Energy Data 2

3 Strategic Context The Army is addressing energy security through a comprehensive program to ensure that we have assured access to reliable supplies of energy and the ability to protect and deliver sufficient energy to meet mission-essential requirements. Soldier: Lightening soldier power loads Agility and self-reliance through advanced portable power systems, lighter batteries, universal charging devices and water purifiers Vehicles: Utilizing alternative fuels, hybrid and electric systems Improving efficiency and extending engine life Includes tactical (air and ground) vehicles and nontactical vehicles Basing: Improving installation fuel, water and energy efficiency Net Zero strategy Diversity of supply through renewable energy enhancing energy security Energy Initiatives Task Force 3

4 Army Power and Energy Basing Soldier Vehicles Installation Contingency Tactical Non Tactical Net Zero Installations Energy Initiatives Task Force (EITF) Contingency Basing Smart & Green Energy Mini Grid Power Plants Adv. Mobile Medium Power Sources Insulated Tents/Spray Foam Renewable Energy Program Plan ARNG Energy Lab (Schools) LED & Electroluminescent Lighting Shower Water Reuse System Expeditionary Water Packaging Water From Air System System Integration Lab - Ft Devens Solar, Wind, Geothermal Power Rucksack Enhanced Portable Power Expeditionary Energy Soldier Power Manager Nett Warrior OSD Operational Energy Strategy Senior Energy & Sustainability Council Energy Initiatives Task Force Army Energy Security Initiatives Net Zero Strategy Tactical Fuels Manager Defense Smart-Charging Micro Grids Vehicle-to-Grid (Fort Carson, CO) Alternative Fuels Low Speed Electric Vehicles Hybrid Electric Vehicles Hybrid Truck Users Forum (TARDEC) Hydrogen Fuel Cell Vehicles Improved Turbine Engine Program Operational Energy Installation Energy 4

5 % Renewable Energy of Total Energy Total Energy in Megawatt Hours Army Energy Outlook 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Energy Efficiency May Lower Baseline by 30% Remaining Electric Consumption NDAA Renewable Energy Requirement 25% by 2025 or 2,500,000 h Major Issues for Army Large-Scale Renewable Energy Projects: 30% 25% National Defense Authorization Act: 25% by 2025 Declining Budgets/Incentive Leverage 20% Need for private financing Specialized Expertise Requires financial, regulatory, environmental and real estate expertise Enterprise Strategy 15% 10% 5% 0% 6% Progress in FY 2012 from 194 different projects To define the most efficient path to reach Army goals Path to Compliance Current Army Performance 5

6 Army Energy Initiatives Task Force Established by the Secretary of the Army on September 15, The Energy Initiatives Task Force (EITF) serves as the central management office for partnering with Army installations to implement cost-effective, large-scale, renewable energy projects, leveraging private sector financing. Projects equal to or greater than 10 Will coordinate with installations for 1-10 opportunities Potential for projects that exceed Army requirements Solar, Wind, Biomass and Geothermal technologies Resources to perform project development and execution Will use existing DoD land-use and third-party financing authorities The EITF s projects will help ensure the Army s goal to deploy 1 GW of renewable energy projects by 2025 Secretary of the Army John M. McHugh 6

7 EITF Organizational Structure Executive Director Regional Environmental and Energy Offices (REEO s) Mr. John Lushetsky Ms. Amanda Simpson, Deputy General Counsel Ms. Heidi Hansen Mr. Kyle Smith (JAG) Planning Directorate Execution Directorate Communications Directorate Ms. Kathy Ahsing, Director Ms. Judi Hudson Mr. Alan King, Director Mr. Doug Waters Mr. Erich Kurre Ms. Joyce VanSlyke, Director Partnerships National Renewable Energy Lab U.S. Army Corp of Engineers Defense Logistical Command Department of Energy Pacific Northwest National Lab General Services Administration 7

8 EITF Strategy Map ACP MO 8-1: VISION: Adapt / Execute Installation Energy Security and Sustainability Strategies Securing Army Installations with Clean, Reliable and Affordable Energy O U T C O M E S MISSION: STAKEHOLDERS: S1. Achieve White House, Congress and DoD mandates M1. Develop comprehensive capability S2. Demonstrate process and value proposition to Army Leadership S3. Ensure secure, reliable, cost effective and stable energy for Installations M2. Plan and execute a cost effective portfolio of privately financed, large scale renewable energy projects S4. Develop realistic and attractive projects for Industry FINANCIAL: F1. Stabilize total installation energy cost F2. Increase investment impact F3. Attract private capital E N A B L E R S PROCESSES: P1. Deploy privately financed renewable energy projects LEARNING AND GROWTH: L1. Create a cost and performance driven culture P2. Shape and enable the energy environment L2. Enhance organizational infrastructure P3. Develop and institutionalize a transparent, agile and sustainable process L3. Build confidence and engagement 8

9 Enterprise Wide Approach The EITF has screened the entire Army enterprise to identify a strong pipeline of opportunities Large Scale RE Potential 96 sites, 179+ opportunities Where are the RE Markets? Solar 2013 Planned Capacity () Army Universe 180 sites x 4 asset types CA 30,000 NV 1,200 IL 80 IN 170 OH 70 PA 80 VA 200 NC 160 NJ 400 MD 20 MA 250 AZ 1,200 NM 13 > 100 TX 1,000 > 50 A = Installed > 50 ( Present) First-Cut Economic Analysis Estimate grid premium at 180 sites x 3 asset types Where could RE be cheaper than grid power? Where are potential sweet spots? Large scale potential High security value Minimum grid premium Fulfill long-term requirements 9

10 Balanced Portfolio of Projects EITF seeks to create a balanced pipeline of opportunities that will serve three driving principles Energy Security Surety (access) Survivability (resilience) Supply (alternative resources) Suf f iciency (adequacy f or missions) Sustainability 24x7 supply for critical assets Price Stability 1 GW Mandates NDAA - 25% by 2025 EPAct - 7.5% renewable electricity consumption by 2013 EO % GHG reduction by 2020 Climate Action Plan - 20% renewable electricity consumption by 2020 Economic Benefits In-kind revenue Reduced/stable energy bills Cost avoidance 10

11 Project Development Process The EITF is producing a process for developing large-scale renewable energy projects that is clear, consistent and transparent. Project Development Project Execution Return on Investment Phase 1 Project Assessment Phase 2 Project Validation Phase 3 Contracts and Agreements Phase 4 Construction Phase 5 Operations and Support Due Diligence, Fatal Flaw Analysis, and Project Definition Project Concept Optimization and Army Approval Final Approvals and Securing a Binding Agreement Constructing Assets and Structuring Services Managing the Operation and Transitioning to Closure Target: 90 Days Current: 1-3 years Target: Days Target:.5-1 Years Current: 1-3 Years Target: 1-3 Years Target: years EITF Risk Assessment Acquisition Partners Mgt Partners EITF Project Life Cycle Management USACE, DLA MICC 11

12 Project Risk Assessment Template Project Risk Assessment Project Risk Factors are reviewed on a weekly basis to identify roadblocks and key issues for successful project development Mission/ Security Economics Real Estate Regulatory Off-Take Integration NEPA Acquisition How does project enhance energy security on host and surrounding installations? What are the possible impacts to Installation operations or tenant missions? Has the project been approved by Installation, Army HQ, and DoD staffs? What is the estimate of the baseline capital cost? What is the value of any RECs or other incentives? What is the predicted resource? Has it been validated? What is existing utility rate and alternative tariffs? What are the impacts of the project to the POM? What is the Real Estate approach and what authority is being used? Has the project received required BLM approvals? Is the project consistent with the Installation Master Plan? What are the regulatory limits for interconnection, net-metering? What is the status of getting required PUC approvals? Will the installation consume all electricity generated? What is the status of state RPS and other incentives to drive external demand? If power is to be sold off the installation, have off-takers been identified? Can the utility wheel power to other potential off-takers? Is there sufficient line and substation capacity? What upgrades are required? Are flow studies are required? What is the status? Is the system upgradeable for smart grid and energy storage technologies? What are the major NEPA issues? Which parties will implement NEPA and what is the timeline? What is acquisition strategy and timeline to implement? What performance risks are there with the developer or other partners? 12

13 EITF Pipeline of Projects More than 180 Installations Screened Evaluated more than 50 renewable energy opportunities at 32 installations Potential Projects 4,500 4,000 3,500 3,000 Wind 2,500 Solar Biomass 2,000 1,500 1, > 4000 Phase 1 &2 Project Assessment & Validation Wind 2 projects Solar 7 projects Biomass 1 project Phase 3 Contracts & Agreements Solar 4 projects Biomass 3 projects 13

14 Pathway to One Gigawatt Annual Capacity Installed () (stacked bars) 15 Solar, Ft. Detrick 15 Solar, Ft. Irwin 20 Solar, Ft. Bliss 20 Solar, Ft. Huachuca 8 Cumulative installed Army RE electric capacity in 2012 was ~35 15 Solar, Redstone Arsenal 20 Solar, Ft. Stewart 43 Achieving Army renewable energy goals will require an unprecedented scale-up in project development. 200 Solar, Ft Irwin (phase 2) Biomass, Ft. Drum Large-Scale Projects Built (Projected) Small-Scale Projects Built (Projected) Cumulative Capacity, Large + Small 100 Solar, Yuma Proving Ground 100 Solar, Ft. Irwin (phase 1) 52 Biodiesel, Schofield Barracks 25 Renewable CHP, Redstone Arsenal Cumulative Capacity, Large Only Cumulative Capacity Installed () (lines) ,400 1,200 1,

15 Current EITF Large-Scale Renewable Energy Opportunities Joint Base Lewis-McChord Yakima Training Center Location: Ft. Drum, NY Project: 28 Biomass Business/Acquisition Model: Competitive PPA through DLA Installation Project Status: Contracts and Agreements Project Validation Project Assessment Deactivated Opportunity * Sierra Army Depot Location: Ft. Irwin, CA Project: 15 Solar Business/Acquisition Model: Competitive PPA through DLA Location: Ft. Detrick, MD Project: 15 Solar Business/Acquisition Model: Competitive PPA through DLA Ft. Drum Watervliet Arsenal Hawthorne Army Depot Location: Ft. Huachuca, AZ Project: 20 Solar Business/Acquisition Model: GSA Areawide Contract through TEP Ft. Irwin Tooele Army Depot Yuma Proving Ground Ft. Huachuca Schofield Barracks Location: Ft. Bliss, TX Project: 20 Solar Business/Acquisition Model: Sole source energy service contract to El Paso Electric Ft. Bliss Ft. Hood Ft. Leonard Wood McAlester Army Ammunition Plant Rock Island Arsenal Redstone Arsenal Ft. Stewart Ft. Detrick Ft. Lee Location: Redstone Arsenal, AL Project: 25 Renewable CHP Business/Acquisition Model: Competitive PPA through HNC Ft. Greely AK HI Location: Schofield Barracks, HI Project: 52 Biodiesel Business/Acquisition Model: Lease with HECO * Note: Representative of assessed and deactivated opportunities. 15

16 Key Enabling Authorities The EITF will leverage existing key Congressional authorities to meet renewable energy goals: Contracts for Energy / Fuel for Military Installations (10 USC 2922a) - Authorizes Department of Defense to utilize 30 year Power Purchase Agreements. - Requires Secretary of the Defense Approval - Delegated to the Deputy Under Secretary of Defense (Installations and Environment). Leasing (10 USC 2667) - Lease of non-excess, available property if benefit to national defense. - Lease term can be longer than five / within useful life of the energy production facility. - Payment: cash or in-kind / fair market value. - Competition in Contracting Act (CICA) not applicable. 16

17 Multiple Award Task Order Contract for Purchase of Renewable Energy Multiple Award Task Order Contract (MATOC) RFP for large scale PPA s issued 30 July 2012 through US Army Corps of Engineers. Qualification based on demonstrated experience to develop and finance renewable energy projects. Solar, Wind, BioMass, Geothermal Companies SBA and Unrestricted based on Project Size $7B total ceiling for 30 years payments Will be used for Solar, Wind, Geothermal, Biomass/WTE, and Advanced Technology (PPA) Projects. Qualified Renewable Energy Projects will be issued as competitive Task Orders. 58 MATOCs Awarded in FY13: Qualification/ Downselect Qualified Developers Qualified Projects On/Off- Ramp Project Novation Project Specific Task PPA Order RE Project PPA Geothermal: May / September 2013 (6) Solar: August 2013 (22) Wind: September 2013 (17) EITF Due Diligence Biomass: September 2013 (13) Note: A total of 41 companies received MATOC awards, some of them in more than one technology - thus 58 awards. 13 of those 41 companies are small businesses and they received 15 of the 58 awards. RE Project Opportunities 17

18 Wrap Up Energy and energy security continue to be key components to enhance Army mission capability and effectiveness. Renewable energy is and will continue to be a significant part of the Army s energy security strategy. Through the EITF, the Army is aggressively developing new and efficient business models to support the rapid deployment of 1 GW of renewable energy by

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