Monday, January 3, 2011

2011 New Years Resolutions for DOD Energy

As the New Year loomed, thoughts turned from sugarplums to resolutions. DOD’s resolutions to tighten its energy belt was evident in the establishment of very aggressive goals for energy demand reduction, the production of renewable/alternative power in support of installations and bringing sustainability to operational energy.

The Department and the Services have set numerous quantity and time goals that, in order to achieve, they must start right now. A few of these are:

  • Beginning in 2010 the Navy and Marine Corps will change the way contracts are awarded with Industry being held contractually accountable for meeting energy efficiency targets
  • By 2013 DOD will procure 7.5% of its electricity from renewables; 25% by 2025
  • By 2015, DOD will reduce energy demand by 30%
  • By 2015 the Navy will cut in half the amount of petroleum used in their commercial vehicle fleet through phased adoption of hybrid, electric, and flex fuel vehicles
  • By 2016 the Navy will sail the Great Green Fleet, a carrier strike group composed of nuclear ships, hybrid electric ships running biofuel, and aircraft flying on biofuel
  • By 2016, the Air Force wants to be buying 400 million gallons of fuel alternatives that are cost competitive with petroleum based fuel and no more carbon intensive in production than available conventional fuels.
  • By 2020, the Navy will meet 50% of their total requirements with renewables and have 50% of their installations at Net Zero
  • By 2025, the Air Force must bring 1,000 MW of renewable capacity online to meet its goals.

What this plethora of goals attests to are the good intentions of the Department. The challenge will be in accountability. The Services have not made public the campaign plans required to meet these goals, but assuming a normal distribution overtime, we can estimate what we should expect to see in 2011.

Based upon previous analysis, DOD needs to reduce its installation energy use by about 6,300 billion BTUs (BBTUs) every year to make the 2013 goal. It will have to add about 1.5% of its total energy use every year in order to reach the 2015 goal. The challenges in developing an algorithm to model this are the unknowns of growth. If a serious drawdown begins in Afghanistan in mid-2011, those returning service members will increase demand at military installations. Additionally, DOD has not established how these percentages will be applied. In total? Per installation? And from where will the funding come?

In order to reach these goals the Department will have to make use of Energy Saving Performance Contracts, Utilities Energy Services Contracts, Enhance Use Leases and Energy Conservation Improvement Programs. Only the ECIP puts money directly in to commanders’ hands for immediate execution. Al l the other programs are third party investment programs and require long lead lines and bureaucratic gymnastics with government agencies and local utilities. Either the timelines will start slipping or bold audacious leadership will be required. The decentralized model for execution, with each commander making his own determination in what to invest, when and where will not support a strategy.

So, we will be watching for a coordinated DOD strategy for installation and operational energy that addresses the Services established goals (or dismisses them!), supported by a Program Objective Memorandum providing outyear funding for the various methods necessary to reach the goals. Otherwise we will see DOD continue to tout a number of tactical successes without a clear vision of the endstate.

In the coming year, we will look for enterprise wide efforts to reduce demand that use the buying power of DOD to negotiate with utilities. When DOD reduces demand, the utilities are the losers; how can this be made more palatable?

SPIDERS will serve as the stalking horse for the smart micro grid. With dozens of smart grid efforts underway, SPIDERS can serve as the unifying effort to take the best from each and move forward rapidly on this important endeavor.

Finally, Section 2688 of title 10, United States Code has required that DOD privatize its utilities. The Defense Reform Initiative’s (DRI) “objective is to get DoD out of the business of owning, managing, and operating utility systems by privatizing them”. We will not see installations “buying” renewable/ alternative energy power plant. We do hope to see better metrics in what the installations ask for. A 500MW solar plant is not the same as a 500MW geothermal system. Watt-hour is the better measurement. Intermittent systems require utility grade storage to create reliability.

The goal of the Green Fleet will require greater flexibility and adaptability in the Navy’s bio fuels program. In order to get to 400 million gallons of bio fuel, the Air Force fuel certification will have to accelerate; this means more funding. If there is in fact $200 million in the NDAA 2011 bill for energy R&D, much of it will have to go to bio fuels. The rest needs to go for research on viable, deployable utilities level storage programs.

Right now, DOD is the Nation’s best hope to embrace our energy future. America was the country that electrified the world in the first half of the last century; we computerized it in the last half. We should be the nation that leads the world in the new energy economy and the excellent efforts of DOD to date can spark that leadership. DOD takes these actions in the name of national security. The results should be the start of the next American Century. Happy New Year!

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