Army seeks $7.1B in utility-scale renewable energy projects, targets 25% of consumptionPublished on September 27th, 2011 | Edited by: Peter Wray
Apparently the beginning of this effort was announced at a conference last month, but I recently learned (h/t TPMIdeaLab) that the Army is making a major step to energy independence — and “enhanced” energy security — with a 10-year, $7.1 billion “investment” in a portfolio of large-scale alternative or renewable energy installations. This effort is expected to create an infrastructure that has an annual power capacity of 2.1 million megawatt hours.
To guide the work, the Army has created an Energy Initiatives Office and EIO Task Force (assuming it met its goal to be operational by Sept. 15).
The EIO Task Force will work within the Army to streamline existing acquisition processes and leverage industry for the execution of large-scale renewable and alternative energy projects on Army installations. Army installations currently are pursuing renewable energy infrastructure, but often lack needed expertise. The EIO Task Force will fill this expertise gap and provide resources focused on working with the private sector to execute large-scale renewable energy projects. This is expected to result in increased interest by project developers and improved financial options for the Army.
Rather than actually build its own facilities, the energy initiative looks like it is primarily going to take the form of developing long-term contracts with private companies, which would shoulder the actual capital investments. In a news conference, Katherine Hammack, assistant secretary of the Army for installations environment and energy, said, “What we are doing is leveraging the authorities given by Congress, and have identified that the Army is looking for about $7 billion of private sector investment on Army installations,” Hammack said. The price tag is basically an estimate of what it will take in private investments for the Army to reach its goal of 25 percent renewables by 2025.”
As the EIO website emphatically notes, “We’ve got the land and the demand!”
Regarding the task force and its responsibilities, Hammack said the group is composed of “focused individuals whose primary task is to work with the private sector to develop these kind of renewable and alternative energy projects. …To attract the private investments, we need to have biddable projects - we have to do our homework. We have to do our due diligence to make sure these projects have the appropriate information, facts and background that is necessary for a developer and for the finance community to invest in.”
Hammack also said the idea for the Army-private sector projects is that they would be “ focused entirely on [the continental United States] and large-scale renewable, almost utility-scale renewable projects that would offset all or part of the energy needs of a permanent installation. When we are looking at projects, we are looking at about the 10-megawatt size, plus or minus a little bit. Or it could be larger. We are looking at large-scale renewable energy projects, on Army installations.”
I suspect Hammack is trying to get in front of slew of separate base proposals and bring some uniformity, expertise, leveraging power and approval speed that otherwise wouldn’t be available. The Army currently has 126 ongoing renewable energy projects.
“We have great individuals at our garrisons who are working hard to advance this, but the energy initiatives task force will be staffed with experts in finance, renewable technologies, project management, and work in concert with the garrisons to expedite these projects so they can be executed in appropriate time frames,” Hammack said.
Secretary of the Army John McHugh said in August, “What we are looking toward is a better partnership and an infusion quite frankly of private-sector investments where it would be a win-win situation.” He indicated the developers would also be free to sell excess electricity to non-Army customers.
This effort is part of the Army’s previously announced Net Zero program, which was unveiled in April as an energy-conserving program for bases to only use as much energy and water as they create or recycle by 2020. The Army signed a memorandum of agreement for an enhanced-use lease to begin development of a 500-megawatt solar power facility at Ft. Irwin, Calif., and Ft. Bliss (El Paso, Texas) has announced that the base is planning on building a 20-megawatt solar facility, and was trying to lure a $1.5 billion private sector investment. It’s not clear how the Ft. Irwin or Ft. Bliss plans fits in with the new announcement.
The task force has announced plans for an Oct. 27, 2011, “industry day” at Ft. Bliss, plus a task force “summit” Nov. 3 in Washington, D.C.
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