Army OEI 101 (703) Crystal Drive, 8th Floor, Arlington, VA Assistant Secretary of the Army (Installations, Energy & Environment)

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1 Army OEI 101 (703) Crystal Drive, 8th Floor, Arlington, VA 22202

2 FY15 U.S. Army Universe Land Acreage United States 12,238,313 Europe 135,301 Asia 27,433 Other Overseas 1,381 Roads (Paved and Unpaved) 152,988 Lane Miles Paved Area (Excludes Roads) 232,845,271 Square Yards Railroads 2,171 28,514 (Miles) (Linear Feet of Bridges) Buildings (Square Feet) United States 796,700,115 Europe 81,642,334 Asia 43,316,192 Other 3,543,067 Leases 28,856,249 Privatized 15,302,404 WWII Wood 11,252,613 Demographics 58% total married (9% dual military married) 5.7% single parents 748,934 family members Army Installations IMCOM 68 Army Reserve 3 AMC 27 DLA 4 National Guard 48 ARCENT 6 TOTAL 156 FY15 Army Utilities Systems Army-Owned 203 Privatized 151 Army Energy Usage: 72.6 trillion BTUs from all energy sources $1.2B facility energy bill As of September 2016 Army End-Strength Active 491,365 USAR 198,552 ARNG 350,023 Civilians 246,702 Retired 945,956 Aviation Multi-use airfields 57 Heliports 24 Family Housing Owned 11,113 Leased 4,530 Privatized 86,531 Lodging (Guest Rooms) Privatized 10,437 Rec Lodging 513 Rec Ctrs 2,052 Barracks (Spaces) Permanent Party 175,672 Training 101,152 ORTC 150,520 Plant Replacement Value $358.1B UNCLASSIFIED 2

3 Army Energy Basing Soldier Vehicles Installation Contingency Tactical Non Tactical Net Zero Installations Army (OEI) Contingency Basing Smart & Green Energy Mini Grid Power Plants Adv. Mobile Medium Power Sources Insulated Tents/Spray Foam Renewable Energy Program Plan ARNG Energy Lab (Schools) LED & Electroluminescent Lighting Shower Water Reuse System Expeditionary Water Packaging Water From Air System System Integration Lab - Ft Devens Solar, Wind, Geothermal Power Rucksack Enhanced Portable Power Expeditionary Energy Soldier Power Manager Nett Warrior OSD Operational Energy Strategy Senior Energy & Sustainability Council Energy Initiatives Task Force Army Energy Security Initiatives Net Zero Strategy Tactical Fuels Manager Defense Smart-Charging Micro Grids Vehicle-to-Grid (Fort Carson, CO) Alternative Fuels Low Speed Electric Vehicles Hybrid Electric Vehicles Hybrid Truck Users Forum (TARDEC) Hydrogen Fuel Cell Vehicles Improved Turbine Engine Program Operational Energy Installation Energy Sustainability and Energy Efficiency UNCLASSIFIED 3

4 Threats to Energy Security NDAA 2012: 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 Threats: Age of Infrastructure: Increasing trend in power interruptions on Army facilities due to equipment failure Acts of Man: Risk of cyber attack and attempted physical sabotage Acts of Nature: Increasing extreme weather events like Hurricane Katrina, Superstorm Sandy The OEI develops projects to improve the resiliency and security of the energy posture for Army installations Army installations are dependent on an electrical grid increasingly subject to the potential for extended outages and decreased reliability Four-fold increase in power interruptions on our Army bases over the last ten years Disruptions, natural disasters, and other threats to operations growing in intensity and unpredictability The Army desires resilient and secure energy infrastructure to support our troops both at home and overseas, as well as to support surrounding communities in times of national and regional emergencies A power plant in the Crimean region of Ukraine Police investigate shooting of substation in San Jose Tornado damages high voltage lines at Redstone Arsenal UNCLASSIFIED 4

5 Energy Security and Sustainability (ES 2 ) Strategy Goal: Integrate energy security and sustainability into a resiliency framework Expand Army-wide awareness of energy and sustainability concepts, leading to energy-informed decision making Purpose: Presents the Army s strategic roadmap for its energy and sustainability plans, programs and processes Adopts security, resiliency, and future choice as organizing approaches UNCLASSIFIED 5

6 ES 2 Strategic Goals 1. Inform Decisions Incorporate Resource Sustainability into Plans and Processes Educate and Train Lead by Example 3. Assure Access Diversify and Expand Supply Maximize Flexibility in System Design Reduce Vulnerability and Risks 2. Optimize Use Decrease Resource Demand Increase Resource Efficiency Support Resource Recovery 4. Build Resiliency Maintain Continuity of Operation Foster Adaptability Adapt to Uncertain, Changing Conditions 5. Drive Innovation Leverage Expertise Expand Collaboration Continuously Improve UNCLASSIFIED 6

7 The (OEI) was established by the Secretary of the Army with the mission to: Serve as the central management office for the development, implementation and oversight of all privately financed, largescale renewable and alternative energy projects Be the proponent for projects equal to or greater than 10 MW and work closely with installations to support 1-10 megawatt opportunities Fort Drum, New York: 60 MW Biofuel Project; Provides Fort Drum with 100% energy security Use existing DOD land-use and third-party financing authorities to develop solar, wind, biomass and geothermal projects Fort Huachuca, Arizona: 18 MW Solar Project; Operational December 2014 with more than 57,000 solar panels UNCLASSIFIED 7

8 Strategy, Goals, & Economic Benefits Two of five strategic goals under the Army s Energy Security and Sustainability Strategy are supported by privately financed renewable energy projects (Assured Access & Building Resiliency) Within the renewable goals, all privately financed projects must meet at least two of three underlying principles Securing Army Installations with energy Energy Security & Sustainability Assured Access Diversify and expand resource supply Maximize flexibility in system design Reduce vulnerability and risk Build Resiliency Maintain continuity of operations Foster adaptability Installation Energy The challenge is developing a balanced portfolio that supports all three principles Renewable Goals NDAA 25% renewable energy by 2025 EPAct 7.5% renewable energy by 2013 and beyond EO % renewable electricity and 25% clean energy by GW Commitment Economic Benefits Priced at or below grid energy Predictable energy bills Cost avoidance In-kind / lease revenue that is clean, reliable, and affordable UNCLASSIFIED 8

9 Enterprise-Wide Portfolio OEI projects are developed through an enterprise approach to capitalize on the Army s diverse installations On or bordering Army land - Not dependent on assets hundreds of miles away - Supported through defensible transmission infrastructure on post No taxpayer dollars - Power purchased using current utility bill - All projects are at or below the projected cost of grid energy - Providing energy resiliency at no additional cost to the Army Leverages private financing - Uses existing DOD land-use and energy purchase authorities - Built with private capital investment - Owned, operated, and maintained by the private sector Solar PV installation at Fort Huachuca, AZ Aerial view of the solar PV array at Anniston Army Depot, AL UNCLASSIFIED 9

10 Renewable and Alternative Energy Security Projects Energy Security Key Renewable and Alternative Technology Key Installation Project Status Yakima Training Center: 80 MW Onsite Generation Onsite Storage Controls Solar Wind Geothermal Biomass Natural Gas Hydro CHP Controls Storage Battery Phase 1: Assessment Phase 2: Validation Phase 3: Contracts & Agreements Phase 4: Construction Phase 5: Operations & Support Tooele Army Depot: 10 MW Rock Island Arsenal: 8.5 MW Access to onsite non-contingency generation Ft. Drum: 60 MW Access to onsite contingency generation through a microgrid Ft. Detrick: 15 MW Access to onsite non-contingency generation Ft. A.P. Hill: ~20 MW JFTB Los Alamitos: 16 MW Access to onsite contingency generation through a microgrid Ft. Huachuca: 18 MW AK Schofield Barracks: 50 MW Access to onsite contingency generation through a microgrid Ft. Sill: 20 MW Access to onsite contingency generation through a microgrid Ft. Hood: 65 MW Access to onsite non-contingent generation HI Redstone Arsenal Solar: 8 MW Access to onsite non-contingency generation Redstone Arsenal CHP: 25 MW Access to onsite contingency generation through a microgrid Camp Shelby: 14 MW feeds the external grid Ft. Benning: 30 MW Ft. Rucker: 10 MW Anniston Army Depot: 10 MW Ft. Gordon: 30 MW Ft. Benning 2: 13 MW Ft. Stewart: 30 MW As of 15 Feb 17 FOUO-Close Hold 6

11 Significant Progress for Large-Scale Renewable Energy Projects Fort Benning, GA: 30 MW Solar Array; The project comprises 133,950 solar panels Fort Detrick, MD: 15 MW Solar Array; Enough electricity will be generated to power about 2,720 homes per year Fort Hood, T: 65 MW AC Hybrid Solar & Wind Projects; Expected to provide $168 million in cost avoidance over the course of the contract Fort Huachuca, AZ: 18 MW Solar Array; Operational December 2014 with more than 57,000 solar panels UNCLASSIFIED 11

12 How the OEI Pursues a Deal Projects Deactivated if No Longer Viable Identifying Strong Project Fundamentals Seeking islandable capability A suitable site(s) An identified off-taker Economic conditions that create value across all 8 assessment criteria, including energy security, for the Army and the developer Capitalizing on Market Timing Align with market conditions Understand comprehensive timeline Deploy resources with speed & agility Keep financing costs down Take advantage of new market opportunities for storage and controls Projects are located on or near Army land to support installations Potential projects are validated using eight assessment criteria OEI projects must benefit the Army through enhancing energy security and resiliency of critical missions without increasing costs to the Army Maintaining Process Discipline Resource allocation & managing project risk An iterative and rigorous project development process Focus on projects with lower risk and high value Develop mitigation strategies Deactivate non-viable projects during development phases UNCLASSIFIED 12

13 Why the Army is Diversifying Energy Sources Benefits to Army Benefits to Public Energy Security Secures installations to allow for continued military readiness in the event of grid failure or cyber attack. 1 Protects critical assets and missions Distributed generation supports communities surrounding installations through grid stabilization and emergency preparedness Economics Provides price stability and cost avoidance on installation energy bills Leverages available, nonexcess land OEI projects have achieved $182M in cost avoidance to date Creates jobs 2 Meets Congressional mandates Provides responsible stewardship of taxpayer dollars OEI projects have leveraged $689M of private capital investment to date 1. Cyber attacks on energy grid are #1 threat to U.S., according to former Director of National Intelligence. 2. The International Renewable Energy Agency (IRENA) and Bloomberg report that job growth in solar has steadily advanced over the last 4 years. IRENA reports 8.1 million people working in renewable sector at end of 2015, an increase of 5% over previous year. The Solar Foundation reports nearly 17,000 veterans are employed by the solar industry across the U.S. UNCLASSIFIED 13

14 Key OEI Authorities for Project Development OEI leverages existing statutory authorities to meet renewable energy principles Procurement Partners Defense Logistics Agency Mission and Installation Contracting Command U.S. Army Corps of Engineers 10 USC 2922a* - Power Purchase Agreement (PPA) Contracts up to 30 years for provision energy and production facilities Army consumption from a renewable/alternative energy generation facility (REGF) located on- or off-site Provides Army utility cost avoidance and increased energy resiliency Competition required for all new PPA solicitations FAR 41 - GSA Areawide Utility services for up to 10 years Army provides the servicing utility an easement to host rate-based energy generation on-site, alleviates congestion on utility line near the installation OEI providing modification to existing GSA Areawide contracts 10 USC 2668* - Easement Granting rights-of-way access to military lands to promote public interest Army issues an easement to a utility for on-site energy generation Provides a streamlined outgrant for utilities to construct generation for the community 10 USC 2667* - Lease Lease non-excess property to promote national defense or public interest Army issues a lease for on-site energy generation to be consumed off-site On-site generation provides a secure location to reestablish power for the installation and community after an outage Competition required Typical Business Models PPA / Lease GSA / Easement Standalone Lease *Department of Defense-Specific Authorities UNCLASSIFIED 14

15 Supporting the Army of the Future Today s Army requires access to diverse and reliable energy resources to maintain mission essential functions The OEI develops long-term projects using offthe-shelf technologies to provide clean, reliable, and affordable energy generation on Army installations By improving the energy resiliency and security of Army installations, we can continue to conduct critical national security missions and support our troops both at home and abroad Learn more about our process by reading the Army Guide: Developing Renewable Energy Projects by Leveraging the Private Sector Follow our progress by signing up to receive our bi-monthly newsletter and OEI blasts at UNCLASSIFIED 15

16 ARMY STRONG Fort Benning, GA: 30 MW Solar Project; Operational Feb 2016 UNCLASSIFIED 16

17 Working with the Army ASA(IE&E): ACSIM: USACE: Renewable Energy on Army Lands Large-Scale Renewable Energy Projects (>10MW): Siting Clearinghouse: Science and Technology Army Acquisition Business Website: Base Camp Integration Laboratory: Communications-Electronics Research, Development and Engineering Center: Natick Soldier Research, Development and Engineering Center: National Defense Center for Energy and Environment: Network Integration Evaluation: Rapid Equipping Force: Facilities Energy Innovation Net Zero: Strategic Environmental Research and Development Program (SERDP) & Environmental Security Technology Certification Program (ESTCP): Vehicle Innovation Tank Automotive Research, Development and Engineering Center: Aviation & Missile Research, Development & Engineering Center: Small Businesses Army Small Business Innovation Research Program: UNCLASSIFIED 17