Empowering the Mission

The Department of the Navy’s Renewable Energy Program Office has established three unique development models that will allow for the timely construction of large-scale renewable energy projects at U.S. Navy and Marine Corps installations as the department pursues the Secretary of the Navy’s goal to produce or procure 1-GW of renewable energy by the end of 2015.

 

 By Robert M. Griffin Jr., SES, and Capt. John Kliem, P.E., CEC, M.SAME, USN

 


 

2014 marked a pivotal year for the Department of the Navy’s (DON) long-term energy security goals with the establish­ment of the Renewable Energy Program Office (REPO) last spring and the rapid-fire development of approximately 565-MW in procurement by year’s end.

The genesis of REPO stems directly from Secretary of the Navy Ray Mabus and his goal for the department to secure 1-GW of renewable energy by the end of 2015 in order to enhance energy security, opera­tional capability, strategic flexibility and resource availability.

To ensure these goals are met, REPO has created three unique development models that will allow for the timely construction of large-scale renewable energy projects at U.S. Navy and Marine Corps installations.

 

REPO project opportunities

Secretary of the Navy Ray Mabus has set a goal for the Department of the Navy to produce or procure 1-GW of renewable energy by the end of 2015. Map above displays renewable energy project opportunities at Navy and Marine Corps installations. Projects are coordinated through the Department of the Navy’s Renewable Energy Program Office, which works with installations, utilities and third-parties to incubate renewable energy projects. IMAGES COURTESY DON


  

THE NEED FOR SECURITY

Energy security is critically important to DON. The cost to secure power and requisite fuel supplies commands the larg­est shares of its annual budget. On shore, energy bills are the single largest cost for Navy installations, reflecting about 28 percent of shore budgets. Energy price vola­tility can greatly hamper mission readiness as it can divert funding away from critical systems and platforms and throw mid- to long-term budget planning out the door.

Energy security means having assured access to reliable supplies of energy and the ability to protect and deliver sufficient energy to meet mission essential require­ments. Assured and secured supplies of energy will provide an unprecedented capacity for the continuity of DON opera­tions when the regional grid becomes unstable, and during times of instability in energy markets worldwide.

In 2012, the Department of Defense (DOD) reported 87 outages of eight hours or more at its bases, of which 98 percent were attributed to acts of nature (storms and forest fires). The number of major weather-related grid disruptions has trended upward from less than 20 in 2001–2002, to an average of more than 90 per year from 2008–2012. To fulfill both long-standing and expanded missions, DON seeks to boost energy security through investments in energy efficiency and local, infinite sources of energy. Large-scale renewable energy has been identified as an important component of this energy security.

 

RENEWABLE ENERGY GOALS

Recognizing the importance of energy security to the Armed Services and the greater national security responsibility, Congress mandated DOD to produce or procure 25 percent of its total facility energy from renewable sources by 2025.

Each service is responsible for gener­ating a portion of that renewable energy. Secretary Mabus has directed DON to produce or procure 1-GW by the end of 2015. There are three goals for DON in its mission to integrate renewable energy:

  •  Consume 50 percent of shore energy from alternative energy sources by 2020.
  • Develop 500-MW of new renewable energy generation by the end of 2014 and another 500-MW by the end of 2015.
  • Integrate renewable energy into instal­lations’ electrical grids.

  

Navy renewable energy project in San Diego

Solar panels installed on the roof of Space and Naval Warfare Systems Command Headquarters, Old Town Complex, San Diego. The rooftop photovoltaic installation supports the Department of Defense’s goal of increasing renewable energy sources to 25 percent of all energy consumed by the year 2025. U.S. NAVY PHOTO BY RICK NAYSTATT


 

ACQUISITION STRATEGIES

In order to facilitate the achievement of the 1-GW goal, Secretary Mabus established REPO in spring 2014 with a laser-focus to identify cost-effective renewable energy projects for DON installations. REPO is responsible for the overall planning, coordi­nation and integration of renewable energy projects into DON activities, with execu­tion and management control.

REPO is a multi-disciplined team designed to partner with DON commands, regions and installations to implement cost-effective (at or below the cost of brown power), large-scale (defined as 10-MW or greater) renewable projects that leverage private sector financing.

Immediately following the establishment of the REPO office, the team worked quickly to complete load and resource analyses of DON shore installations across the globe to determine the service’s appetite for large-scale renewable energy. REPO created a realistic approach to successfully execute DON’s renewable energy goals, including three comprehensive development models tailored to the electrical markets in which the Navy and Marine Corps operate.

The three distinct models allow for greater access and use of renewable energy across DON, increased regional energy diversity, and successful progress toward the 1-GW goal.

 

DEVELOPMENT MODEL 1

REPO’s first development model involves the purchase of renewable power from a new off-base renewable energy asset for on-base consumption through a long-term power purchase agreement (PPA).

In this model, an agent (for instance, a Department of Energy Regional Power Administration, the Defense Logistics Agency, the U.S. General Services Administration, or a regulated utility) will release a request-for-proposal for DON’s energy demands at one or more installa­tions. DON will sign a PPA with that agent, and the renewable energy will flow to the installation(s) per the contract terms. DON will require the Renewable Energy Credits generated by the renewable energy to be bundled with the purchase.

The Model 1 development timeline is the shortest and will be the first projects in procurement. In order to complete the contract, the cost of renewable power must fall at or below the current cost of the enti­ties power supply.

Since 1987, DON and the Department of Energy Western Area Power Administration (Western) have had an interagency agree­ment that allows Western to enter into long-term PPAs to meet DON’s energy requirements. In September 2014, Secretary Mabus announced that Western issued a request-for-proposal to meet the renewable energy requirements for 14 DON installa­tions in California. Once awarded through the selection process, this project will be the largest single purchase of renewable energy by a DOD entity.

DON will contract to purchase power from a new renewable energy generation project for up to 25 years. The cost of the project must be at or below DON’s current cost of power in the California marketplace, and it will be compliant with California Renewable Portfolio Standard Content Category One Bundled Green Energy.

 

DEVELOPMENT MODEL 2

The second development model is a real estate outgrant that will allow for devel­opment of a new renewable generation asset on DON property to be developed, owned and operated by a third party for off-base consumption. In this model, DON will lease land to a third party that will provide fair market value in the form of cash or in-kind consideration, such as providing infrastructure upgrades. With the asset located on base, DON will have the opportunity to spend funds at a later date to leverage the asset in the event the outside grid goes down.

In the event of a disaster, access to the renewable generation could allow DON to provide energy security to the community.

 


 

Immediately following the establishment of the REPO office, the team worked quickly to complete load and resource analyses of DON shore installations across the globe to determine the service’s appetite for large-scale renewable energy.


 

DEVELOPMENT MODEL 3

REPO’s third development model is a real estate transaction wherein DON signs a real estate outgrant to an electric utility to build a renewable energy generation asset on-base. DON will consume the generation from the new facility, but a third-party will retain ownership.

In exchange for use of the land, DON will require fair market value for the land in the form of in-kind consideration (for instance, electrical infrastructure upgrades or updates to DON’s onsite infrastructure). This model has the longest project develop­ment timeline.

 

THE YEAR AHEAD

The positive momentum of 2014 will carry over into 2015 as DON will be aggres­sively pursuing the 1-GW goal. While some major milestones were achieved in 2014, much of the work done to develop the frameworks to allow for future renewable energy projects on Navy and Marine Corps installations (Development Models 2 and 3) occurred behind the scenes.

To allow DON to move forward with executing lease agreements, environmen­tal planning and analysis, interconnection studies and other crucial development elements will be completed in 2015.

Reaching the 1-GW goal is critical for DON to improve energy security, operational capability, strategic flexibility and resource availability. In April 2014, Secretary Mabus said “We are going to meet these [energy] goals…it will make us better at our jobs, better warfighters, and it will make us, and the world, far more secure.”

With the current plans in place, that goal is within reach.

   


 

Robert M. Griffin Jr., SES, is Executive Director, and Capt. John Kliem, P.E., CEC, M.SAME, USN, is Deputy Director, Renewable Energy Program Office, U.S. Department of the Navy. They can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it." target="_blank">This email address is being protected from spambots. You need JavaScript enabled to view it.; and This email address is being protected from spambots. You need JavaScript enabled to view it." target="_blank">This email address is being protected from spambots. You need JavaScript enabled to view it., respectively.