Published on May 9th, 2013 | by Tina Casey4
Army Steamrolls $7 Billion In Renewable Energy Projects, Sequester Or No Sequester
May 9th, 2013 by Tina Casey
The U.S. Army has just launched the first in a series of renewable energy contracts that will eventually total $7 billion by the end of this year, using power purchase agreements along with a standard procurement tool that is expected to crush any obstacles that are put in its path. That includes the notorious budget sequester as well as any objections from the anti-renewable energy crowd in Congress, which has already used the budget as an excuse to sink the Navy’s biofuel initiatives. So, let’s see what kind of firepower the Army has on its side.
The Army Renewable Energy Initiative
The Navy biofuel program really has attracted a lot of negativity from certain legislators over the past couple of years, but as far as renewable energy goes, the Navy has a fairly modest outlook compared to the Army’s Net Zero Vision.
Army Net Zero is just what it says – a net zero plan for energy, water and waste at Army facilities – but it goes far beyond that to embrace environmental stewardship and community health as essential elements of national defense.
That holistic perspective is reinforced by the U.S. Army Corps of Engineers. Take a look at the USACE Earth Day statement from a couple of years ago:
“For those of us who are part of the U.S. Army Corps of Engineers (USACE), it’s one more day in our journey toward ensuring that our actions are sustainable and that we are the very best stewards we can be of this country, of this planet…We are the nation’s environmental engineer. No other federal agency is addressing environmental issues of the same scope and magnitude as we are…”
Keeping that in mind, in 2011 the Army established the Energy Initiatives Task Force to streamline the process for getting utility-scale renewable energy in the pipeline for construction on its bases, the idea being that hyper-local energy sourcing is more secure than relying on a far-flung grid. With a team of specialists on the job, individual base commanders don’t have to reinvent the wheel for each new project.
In support of the Task Force, last summer USACE issued a request for proposals for $7 billion in renewable energy projects that would be constructed by private companies under power purchase agreements, in which the Army (aka us taxpayers) pays no up-front costs. Under these agreements the renewable energy facility is built on Army property but is owned, operated and maintained by its developers, which sell the power it generates to the Army at an agreed-upon price.
$7 Billion In Renewable Energy Projects
The means for arranging all this is the Indefinite Delivery Indefinite Quantity contract instrument, which the General Services Administration commonly uses to “help streamline the contract process and speed service delivery” when it can’t quantify the goods or services it will need during a specified period of time, other than to establish a minimum.
Typically, this instrument is used for architecture and engineering services, and apparently its deployment for building utility-scale renewable energy projects under power purchase agreements on Army bases is a first.
Heavy Hitters Go To Bat For The Army
The contracts will be announced in a series through 2013 for solar, wind and biomass. The geothermal contracts were first up and were announced last week, going to five energy companies: Constellation NewEnergy, ECC Renewables, Enel Green Power North America, LTC Federal, and Siemens Government Technologies.
Italy based Enel is another global company that is expanding its clean tech operations. Best known for its long history with geothermal, Enel is also a strong player in wind power and it jumped into the U.S. solar power market in 2011.
Constellation NewEnergy comes under the umbrella of Constellation, which is part of the gigantic Exelon family. Exelon got a thumbs down from us when it objected to the wind tax credit extension last year (and for counting natural gas as a “clean energy solution), but it was among the first major companies to quit the U.S. Chamber of Commerce back in 2010 over the organization’s anti-renewable energy lobbying, and it is building a strong renewable energy portfolio.
We’re not familar with ECC and LTC, but when you look at Siemens, Enel and Exelon you can see the kind of private sector pushback that could launch into action if anybody starts trying to throw a monkeywrench into the Army’s renewable energy plans.