Hear a bugle blowing? For the beleaguered renewables industry, the cavalry may be riding to the rescue.
The US Army is inviting suppliers who can build, own and operate solar, wind, geothermal or biomass generation to qualify for a pool of contractors who will perform an anticipated $7 billion worth of work for military installations.
And the military work doesn’t require a vote of Congress, extension of tax credits or appropriated funds.
The Army wants to reduce its installations’ vulnerability to the uncertainties of the civilian grid. Assistant Secretary of the Army Katherine Hammack says the military has seen electricity costs rising 4% to 17% per year, and experienced reliability issues because bases are often at the end of a grid.
The Army has also committed to developing at least a gigawatt of renewable energy by 2025, part of the Obama administration’s goal to have the Department of Defense less dependent on imported oil. Heather Zichel, Deputy Assistant to the President for Energy and Climate Change, called that goal both financially prudent and mission critical.
With appropriated funds limited, the Army is using existing legal authority to entice qualified contractors to compete to build and run renewables on selected military sites. It’s issuing a Multiple Award Task Order Contract, or MATOC, inviting businesses to qualify for a pool from which contractors for specific projects will be chosen.
Taking an Innovative Approach
The Army will sign power purchase agreements (PPAs) up to 30 years long – a period essentially unavailable on private markets. Those PPAs will allow contractors to obtain private financing for new facilities.
The Army will then have electricity at a predictable long-term price from a sustainable source, paid for as part of normal base electric bills. No taxpayer money is needed from Congress to get facilities built.
Contractors will be able in some cases to bid renewable facilities large enough to produce surplus power, which they will be able to sell on the grid.
Lt. Gen. Thomas Bostick, commanding general of the US Army Corps of Engineers, said the MATOC will “streamline the acquisition process” since qualified contractors can be awarded task orders under the master contract.
Stuart Hazlett, Director of the Corps’ National Contracting Organization, said the MATOC’s intent is to “seek out” competition and get the best qualified providers into the pool.
To read additional Breaking Energy coverage of the US Army’s renewable energy commitment, click here.
Hammack said the Army has other projects in energy savings and renewables ongoing, but this is the first anywhere in the federal government to take the long-term PPA approach.
She said she hopes the first task orders can be issued 3-6 months after the pool of contractors is determined.
The Army’s Energy Initiative Task Force is evaluating energy savings, efficiency and renewable energy potential at 180 sites now, to prepare the initial set projects on which bids will be taken.
A pre-proposal conference will be scheduled within the next four weeks, said Hammack, and contractors chosen for the pool an anticipated 30 days after that.
