Army Seeks Private Investment for Green Projects

By Eric Beidel

NEW ORLEANS — The Army is lagging behind the other services when it comes to new energy mandates piling up across the Defense Department. In fiscal year 2010, the Army had a goal of reducing its energy intensity by 15 percent. It was able to reduce it by just 8 percent. The Army also missed its goal to have renewable energy account for 5 percent of its total use.
“The Army is not doing great in the energy performance arena right now,” said Caroline Harrover, a senior policy analyst at Current Technologies Corp. and a support contractor for Army energy partnerships.
Now the service is looking to attract private investments for green projects, Harrover said May 10 at the National Defense Industrial Association’s annual energy symposium.
The Army has more than 120 renewable energy projects under way, but they only account for 2 percent of its entire usage. “The Army has had some success with the low-hanging fruit,” Harrover said, but fulfilling policy mandates would require an investment $134 billion into energy projects between 2012 and 2016, Harrover said. That’s 11 times the amount the Army currently spends on such initiatives.
That leaves a good portion of the $134 billion unfunded.
“What the Army is trying to do is reposition to attract that private sector investment, particularly in renewable energy development,” Harrover said. At the top of the list is the Army’s “net zero” goal of making installations produce as much energy on site as they use in a given year. The service has selected more than a dozen installations to participate in a pilot program.
The Army also is looking at a few different alternative methods to finance its energy-related projects. One, an Energy Savings Performance Contract, involves a partnership with a private company that designs, builds and monitors the savings from a project. Another called an Enhanced Use Lease would have the Army renting out underused land for development of a renewable energy venture. This doesn’t create any additional energy for the service, but it could buy some of the power through a Power Purchasing Agreement.
The Army so far is running about 135 projects under performance contracts. But it has only ever executed one PPA at Fort Carson, Colo.
The Army is looking to migrate some of the green initiatives from its stateside installations to combat zones, where most of the Defense Department's fuel is spent. Units are using foam insulation on tents, micro-grids and rucksacks with rechargeable solar power. There are about 100 of the latter in use right now.
“The Army has had some success in small-scale renewable energy development — solar on rooftops, things like that,” Harrover said. “But the Army really needs to position to attract that large-scale renewable energy development. To do that, it’s going to need that alternative financing from the private sector.”
The service is looking to bring in more than $7 billion in private funding for development projects by 2022. The plan is to reach out to state and local governments, streamline acquisition processes and invest capital up front, Harrover said.
A more detailed report on the Army’s strategy for energy efforts and avenues for financing them will be rolled out in August, Harrover said.

Topics: Business Trends, Doing Business with the Government, Partnering, Service Contracts, Defense Contracting, Defense Department, Energy, Alternative Energy, Energy Security, Power Sources

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