Friday, July 29, 2011

Army Energy Website is Up

The Army has created a page with all the latest news on energy. You can read about how BRAC saves energy, hear GEN Petraeus address to the Army/Air Force Energy Conference and catch up on new programs like the test base camp and old projects like the Advanced Medium Mobile Power Sources that were finally green lighted for full rate production on 20 July. Well done page and very informative.

Thursday, July 28, 2011

From the Ashes to the Edge: Army OE Capability Resurrected

In a previous post, I lamented the lack of an execution arm for operational energy for everyone but the Marines who have the Expeditionary Energy Office. In 2006 -2008, the Army had the Power Surety Task Force (PSTF), embedded in the Rapid Equipping Force (REF) that served that function. The REF finds technology solutions to commanders’ immediate battlefield needs and brought the Joint Force robots, visible laser designators, anti-sniper technologies and enhanced armor.

The adventure in operational energy that was the PSTF brought about, HiPower, tactical garbage to energy, the Net Zero Plus Joint Technology Demonstration and the Net Zero Forward Operating Base at the National Training Center. Unfortunately, it was a bit avant garde for the timorous REF Director at that time and he had it transferred to the Director of Defense Research and Engineering (DDRE). DDRE was also running the Energy Security Task Force, the ad hoc predecessor to the Office of Operational Energy Plans and Policy (OOEPP). When OOEPP got up and running, they inherited the PSTF, but decided that their office would just do plans and policy and not do execution. The PSTF was allowed to die a proper contractual death. But the Phoneix arises!

Yesterday, at storied Fort Belvoir, VA the REF announced that “The U.S. Army's Rapid Equipping Force has partnered with the Defense Technical Information Center's (DTIC) Weapon Systems Technology Information Analysis Center (WSTIAC) to procure, deploy and assess hybrid alternative and renewable energy systems in an effort called "Energy to the Edge". Selected renewable and alternative energy solutions include Solar Stick 360 3kW hybrid energy system, ZeroBase H-Series 5kW Regenerator, Skybuilt's Skycase portable power system, Iris Technologies Personal Power System (SPACES) and Qinetiq's 1kW JP-8 generator.” As soon as the REF posts a link to the release, will get it to you.

How this will be accomplished is unclear. Whether a sub-organization will be reconstituted or this will simply be added to the plates of folks already there, is not known. What is known is that their number one customer, U.S. Forces - Afghanistan, is straining at the bit for this capability. Before he departed, GEN Petraeus submitted a memo to the Under Secretary of Defense for Acquisition, Technology and Logistics listing four operational energy requirements. GEN Mattis, Commander, U.S. Central Command endorsed the request and added one of his own. CENTCOM wants a team of energy experts from the Services and Industry to visit Afghanistan to conduct "a baseline study to reduce fuel consumption at our forward operating bases". Having done a couple of these, I recommend that CENTCOM send a General Officer to lead this team and ensure they get access to the information often closely guarded by support contractors.

The REF is the un-acquisition outfit that gets it done. It is the perfect place to put the requirement. I caution the leadership to gird their loins against the folks that will tell them it is not their job. The REF mission is to, “rapidly provides urgent capabilities to U.S. Army forces employed globally by harnessing current and emerging technologies in order to improve operational effectiveness”. Operational energy is just such an “urgent capability”. Dan Nolan, PSTF 2006-2008

INSS Comes to Defense of DOD Energy Plan: "Next Piece Won't be Vague"

This just in.....DOD publishes DOD Energy Strategy. National Defense University declares that criticism is unjust. They are hopeful.
"Hopefully the implementation plan will address the criticisms voiced about the vagueness of the strategy”, says Dr. Richard Andres.

The Institute for National Strategic Studies lauds the ASD, OEPP for getting a “first piece in the overall energy plan” published just two years after being directed to form by Congress in 2009. Of course the speed with which DOD was able to place a nominee before Congress should have given a clue in that the confirmation hearing did not occur until early 2010.

Not sure what Dr. Andres feels is unjust. The Energy Security Strategic Plan published by the DOD Energy Security Task Force in 2008 was a comprehensive and directive document. Many of its authors work in the office of the ASD/OEPP. I guess my lack of patience is that most of the work had been done; the challenge should have just been in re-coordinating. 

But the fact is, the Services hold all the cards. The only one that Ms. Burke holds is the ability to certify the energy budget for Services against the DOD plan. The longer we wait for the plan, the less time the Services have to ensure their budgets are compliant. Of course, I am not sure what happens if a budget is not certified. Maybe they get another 90 days and a do over. Dan Nolan

Wednesday, July 27, 2011

Breach or By-Pass: Overcoming Obstacles to DOD Energy Goals

In DOD energy, the vision is clear and the strategic goals are well articulated. What is missing is direction to those who will execute the strategy at the operational and tactical levels. If you ask a Director of Public Works at an Army Post (and I have) what their responsibilities are regarding achieving 25% renewable energy by 2025, they will look at you as if you have an even number of heads.

A recent article in National Defense Magazine questioned DOD’s ability “to turn glossy rhetoric into ironclad policies”. This observation came as results of remarks by former Vice Chief of Naval Operations, ADM (R) John Nathman of the Center for Strategic and International Studies (CSIS). Nathman attributes this in part to a lack of an overall National Energy Policy. I would agree that we do not have a new energy policy, but there are plenty of existing laws and executive orders still in effect.

The current energy policy is expressed in two laws (EPAct 2005 and EISA 2007) and two executive orders, (13423 and 13514). They provide sufficient guidance for DOD to create strategy, operational direction and tactical instruction. The following is what is required of DOD:

Biofuels Target Purchases by 2022 (at market price):

  • Cellulosic ethanol 16 Billion Gallons
  • Biomass Based diesel 5 Billion Gallons
  • Other Biofuels 15 Billion Gallons

Renewable Energy Goals (at “acceptable rates):

  • 2010 5%
  • 2013 7.5%
  • 2025 25%
  • 2050 50%

Energy Efficiency Goals (relative to 2003; where economically feasible)

  • 2015 30%

The lack of a new national energy policy is not a hindrance to DOD energy planning. What is missing is fixing the responsibilities. The authorities are there (ECIP, MILCON, UESC, ESPC, MATOC, PPA). Because no one is responsible, no one can be held accountable. As one comment I received stated, “who cares about the OEPP plan; show me the budget!".

For operational energy, the acquisition community and contracting command should be getting the rose for figuring out the COTS, GOTs, new development solutions and/or contract modifications necessary. For biofuels, Defense Logistics Agency – Energy will be responsible for that acquisition, but at competitive prices (if Shell Aviation will allow it; how long can Shell sell at a loss?). Infrastructure energy responsibility for renewables and energy conservation will have to devolve upon the Corps of Engineers, Army’s Installation Command, Navy Facilities Command and the Air Force Civil Engineering Support Agency. From there it will pass to the tactical level at the bases and post through the installation command structure. The HOW of this must be in the much promised, forthcoming PLANs. Will every base need to reduce by 7.5% by 2013 or will it be measured as a Service?

There is no question that this is hard work. By Title 10 of the U.S. Code, the Services control the budget. Any plan at the OSD level must be coordinated with (agreed to by) the Services. How hard could that be? Dwindling resources make budgeting agreements hard to achieve. Ask the President and Speaker.

The final piece of the article talked about getting DOD to change their appreciation of the “time value” of money. A dollar spent today on energy conservation saves hundreds in five years, but the Pentagon has been famously “penny-wise and pound-foolish”. As sexy as renewable are, conservation is the best bet for DOD. The smaller the energy foot print, the easier it is to get 7.5% from RE sources. Culture change indeed! Dan Nolan


  • EPAct 2005 – Energy Policy Act of 2005
  • EISA 2007 – Energy Independence and Security Act of 2007
  • ECIP – Energy Conservation Investment Program
  • MILCON - Military Construction
  • UESC – Utility Energy Services
  • ESPC - Energy Savings Performance Contracts
  • MATOC - Multiple Award Task Order Contract.
  • EUL – Enhanced Use Lease
  • PPA – Power Purchase Agreement
  • COTS – Commercial Off the Shelf Technology
  • GOTS – Government Off the Shelf Technology
  • OSD – Office of the Secretary of Defense

Monday, July 25, 2011

ARPA-E, Industry and DOD Energy Leadership: Who leads, who follows?

As a follow up to the last post on the Army/Air Force Energy Forum, after Secretary Chu spoke we heard from other DOD luminaries, high ranking government officials and industry leaders. Again, the themes of “ DOD is vulnerable due to energy insecurity; DOD has a history of technology leadership; DOD helps get technology economically launched; DOD can get it done”. At one point former Senator John Warner, thumped the podium and declared, “DOD Must Lead!”.

For me the highlight of the conference was the very refreshing talk by Dr. Arun Majumdar, Director, Advance Research Projects Agency –Energy (ARPA-E). Their mission statement is much too long to quote here, but , it uses words like “freshness”, “out of the box” and “nibble and sparse” without a hint of self-consciousness. Dr. Majumdar’s presentation focused on some very cool and critically essential projects, all of which had great acronyms like BEEST, IMPACCT, GRIDS, etc. ARPA-E is assuming the mantle of pushing the technology boundaries in a very focused manner on energy. His matter of fact approach to describing things like microorganisms that convert CO2 into liquid fuels had the effect of generating excitement for bugs that crap oil! The good Doctor conceded that not all or, for that matter, many of these projects would bear fruit, but that was their mission: to go where industry might not go. Of course, where is industry going?

I won’t go into all the breakout session I attended, but will give you some general impressions. Other than the DOE discussions, the only piece of new information I gathered was that the Program Manager, Ground Soldier sent some solar panels and fuel cells along with the Iron Rangers of the 1-16th Infantry Battalion to Afghanistan. Apparently this happened back in January while I wasn’t paying attention. Why the PM, Ground Soldier planned, financed and executed this rather than PM, Mobile Electric Power was not adequately explained. Other than that, it was mostly a recitation of why energy security is important to DOD, promises that “the plan is coming” and great recruiting by the Marine Corps (excellent video, Brutus). Not much new ground was plowed.

Industry was there in force and led several moderated panels. The list is informative:

  • Mr. Scott Sklar, President Stella Group, LTD
  • Mr. Paul Bollinger, General Manager Government Solutions, Boeing Energy (former DASA, Energy and Privatization)
  • Mr. Alex Beehler, President of Alex A. Beehler & Co., LL (former Acting Deputy Under Secretary of Defense for Installations & Environment)
  • Mr. Mike Aimone, Battelle Memorial Institute, (former Assistant Deputy Chief of Staff for Logistics, Installations and Mission Support, HQ USAF)
  • Mr. Kevin Billings, Lockheed Martin, (former Acting Assistant Secretary of the United States Air Force for Installations, Environment & Logistics)
  • Mr. Marc Gottschalk, Proterra

It was nice to see so many friends and members of the former DOD energy regime. Many of the listed folks all a hand in writing energy plans, policies and programs for years in DOD. They were the giants upon whose shoulders the new regime should have stood to advance “The Plan”. The clock is ticking towards achieving the goals and mandates for energy. The DOD Operational Energy Plan was published on 14 June 2011 with the promise that the Implementation Plan would follow in ninety days. 15 September 2011 is a much awaited day. Industry is standing by for action. Installation energy is still an open question. Who is responsible, what are the authorities and how will accountability be kept? If this is going to be done with public/private partnership, the public side must answer those questions. Dan Nolan

Wednesday, July 20, 2011

USA/USAF Energy Forum, Day 0.5: Leadership, Technology and Empty Barrels

The first day of the first bi-Service Energy Forum is in the books and it was an impressive first. That the Army and Air Force where able to coordinate schedules and allow hundreds of government, industry, academic and media bubbas to assemble, mingle and learn was a first. As Dr. Kevin Geiss , Air Force Deputy Assistant Sec for Energy pointed out, by holding a joint conference, they eliminated one set of air travel, hotel bills and conference fees (not to mention bar bills), allowing us all to stretch our budgets, reduce our travel related GHG footprint and juxtapose Service agendas. The downside was an agenda so packed with simultaneous breakout sessions that it became almost impossible to choose where to be. That being said, themes began to emerge quickly.

After opening remarks by respective Assistant Secs for installations, energy, environment, logistics and what have you , the first plenary session kicked off with the White House Chair of the Council on Environmental Quality and the Under Secs from the Air Force and Army extolling the virtues of DOD involvement in energy security. “DOD has a history of leadership, DOD helps get technology launched, DOD can get it done” was the chorus and all were singing. The first sour note began to creep in when Mr. Westphal (Army) let slip that, oh, by the way, we don’t have any big money to do this and it is going to get tougher. You could hear the collective sucking of teeth by all the industry folks. Of course this is really not news. All of the government folks have been telling us that they cannot achieve their lofty goals without third party involvement and their industry partners. Still, many of the folks who were there hoping to dig into the supposed barrels of DOD money for energy, were shocked, shocked I tell you, to discover the barrel is bare.

This was followed by the Secretary of Energy, Dr. Steven Chu. Dr. Chu is the funniest, Nobel Prize winning, experimental physicist I know. At one point, when describing the Energy Innovation Hub concept, he said that while working in a previous job a couple of years ago, he had tried to get DOE interested in the concept, with little luck. “The current administration has been more receptive to my ideas.” And then he told us, that that was the joke. We laughed. Sometimes we forget that Nobel Prize winners who have done remarkable work on cooling lasers and have the vision to predict a glucose based economy (vice carbon) are just plain folks. I am seriously in awe of this man and his ideas. I would also like to have a beer with him.

Dr. Chu went on to discuss the multitude of projects in which DOE is engaged, many in support of DOD. He reminded the audience that DOE has an extensive history in working with explosives (see Manhattan Project) and is helping DOD look at IED resistant vehicles. SecEn went on to talk about what DOD could do to its 2.2 BILLION square feet of buildings to reduce their energy impact and closed by showing where other nations ranked in developing Clean Energy for Security and Prosperity as a percentage of their GDP. For a guy with such awesome technology at his finger tips, you would have thought he could have come up with a slide format that would have allowed him to show where the U.S. ranked on that scale. Unfortunately he could only list the top sixteen countries. What do China and Brazil know that we don’t?

I will break here so that Andy Bochman doesn’t yell at me for writing another book instead of a blog, but lots more to follow on the themes of DOD leadership, technical innovation and bare bank account. Tomorrow will have observations on the first day breakout panels and the most impressive presentation of the day. Spoiler alert: it wasn’t from DOD.

For all of you who came up to me and expressed your appreciation for what Andy and I have tried to do in this space, thank you. As much as I pick at DOD on energy, it is only because I am impatient. We are the nation that electrified the world in the first half of the last century and computerized it in the second half. What should we be doing in the first half of this century? Ask Dr. Chu. He will tell you we should be developing Clean Energy for Security and Prosperity. Hear, Hear. Dan Nolan

Sunday, July 17, 2011

Straight DOEPP on Bad Gas: Burke on Hi GHG Fuel

In a recent post on the White House blog (thanks, J.B.) the Assistant Secretary of Defense for Operational Energy Plans and Programs (AS DOEPP), Sharon Burke brought our attention to a rapid development program sponsored by the Army’s Tank and Automotive Research, Development, and Engineering Command in Warren, MI (TARDEC). The program, called the Fuel Efficiency Demonstrator-Alpha (FED-Alpha), produced a prototype vehicle that “has all the capability of an up-armored M1114 Humvee, but with modifications that can improve fuel economy by 70%”. I attended the industry day in September 2008 and in less than three years, the first prototype is unveiled. In the world of Acquisition, this is lightning speed. I hope that this process can be streamlined, is replicable and changes how we think about our current archaic process. But this is not the big new.

Ms. Burke goes on in the post to discuss a current move afoot in Congress to repeal the provisions of Sec 526. Essentially, Sec 526 of the Energy Independence and Security Act of 2007 says DOD can use no fuel whose production has greater carbon intensity than standard petroleum processing. Congress is considering language to repeal that provision. The ASDOEPP draws the connection between increases in greenhouse gases (GHG), climate change and security. Where previously DOD has planned for the implication of climate change, they have not directly attributed it to anthropogenic causes. In many cases they have avoided the discussion, in the words of one Navy official, “we don't want to get into a tail chase over climate change…”.

In a time when Congress’ efforts could be better spent, having an Administration official set the record straight is important and appropriate. The ideology behind the attempt to repeal Sec 526 is about denial of the causes of climate change, not about greater military flexibility. It was good to see Ms. Burke strip the camouflage from this waste of time. Dan Nolan

Simple Solutions and Occam's Razor: Why we are not seeing rapid adoption of energy solutions.

Interesting article in the Environmental Entrepreneurs “E2 Update” by David Willson. Mr Willson attended the 26 April 2011 White House Forum on Energy and heard DepSecDef Bill Lynn and DepSecEn Daniel Poneman speak. He was moved to write his article after hearing the tales of woe that the military was telling, yet again. It is the same tale that has been told since August 2006 when Major General Zilmer, USMC asked for a hybrid electric power station. Mr. Willson, who has a twenty five year history in the energy field, presents some simple (and possibly simplistic) solutions to the challenges of battlefield energy.

His holistic approach starts with energy efficiency. Geothermal heat pumps are one solution to inefficient generators and HVAC units. Close looped systems exchange heat between the atmosphere and cool temperatures thirty feet below the surface (more here). Small wind turbines provide the pumping power. Simple solutions for complex problems.

Mr. Willson also recommends swamp coolers as an old and proven technology. The water intensity of evaporative cooling may be a bit much for desert climes, but worth a look. He also advocates for thermally efficient buildings such as the Afghans have been building for centuries. On that point he aligns with COL (RET) T.C. Moore, USMC of leader of the Marine Energy Assessment Team. Can’t wait to see those showing up in the Sand Book.

Power production gets only a short mention. He is an advocate for combine heat and power applications. According to the Federal Energy Management Program, CHP “offers extraordinary benefits in terms of energy efficiencies and emissions reductions by optimizing the use of heat that would otherwise be wasted when generating power. CHP systems can improve power quality, reliability, and overall energy security”. These systems can be retrofitted to any system that produces heat as a byproduct. What’s not to love?

The bottom-line is that Mr. Willson’s suggestions are common sense, simple and have all been proffered before. Why have they not been adopted? Most often, we hear that U.S. Forces do not want to appear as permanent and such improvements give that impression. More directly, it may be because no one has changed the specifications that the various Contracting Commands use in writing the contracts for Logistics Civil Augmentation Program and for the contracts in support of CONUS installations.

The philosophical principal of Occam’s Razor is that we should tend toward the simpler theories in the absence of sufficient facts to support a more complex answer. In all the DOD energy conferences I have attended, I have never heard someone from any of the Contracting Commands speak about how energy efficiency is being considered in the products or services for which the government contracts. That does not mean it is not being done; it just says that I have not observed it. It will feature in the questions asked at this week’s Army/Air Force Energy Forum. Remember, if you cannot attend, send me your questions and I will respond; better still, post them in the comments section. Look forward to seeing many of you on Tuesday and Wednesday. Dan Nolan

Friday, July 8, 2011

DESC is Dead; Long Live DESC: Congress Opens Little Energy Schoolhouse

As you may know, late last year the Defense Energy Supply Center was reflagged as Defense Logistics Center – Energy. Soon thereafter, another organization seized the acronym DESC for their own purposes. Coincidence? Or just trying to save money on letterhead?

On 11 March 2011 the Congressional Member Organizations (caucuses) approved the formation of the Congressional Defense Energy Security Caucus. Chaired by Congressman Maurice D. Hinchey of the Fighting 22nd District of New York (sorry, Mr. Colbert), the current members of the DESC are, Roscoe Bartlett (co-chair), Jack Kingston (co-chair), Gabrielle Giffords (co-chair), Earl Blumenauer, Gerry Connolly, Randy Forbes, John Garamendi, Colleen Hanabusa, Jay Inslee, Steve Israel, Adam Kinzinger, Jim Langevin, Mike Turner and Delegate Madelleine Bordallo

This week, on 7 July, alongside Congressman Roscoe Bartlett (R-MD), Congressman Jack Kingston (R-GA) and Pia Carusone, Chief of Staff for Gabrielle Giffords (D-AZ), Mr. Hinchey unveiled DESC. The stated purpose is to “educate members of Congress and the public on the strategic value of utilizing sustainable energy sources for the U.S. military, highlight and support established and emerging defense energy initiatives, and find solutions to energy challenges facing the Department of Defense (DoD)”. School is now in session.

Also present at the unveiling was Sharon Burke, the Assistant Secretary of Defense for Operational Energy Plans and Programs who spoke at the kickoff. "By forming the Defense Energy Security Caucus, Representatives Bartlett, Giffords, Hinchey, and Kingston are continuing the strong leadership the Congress demonstrated when they helped create the DoD Operational Energy office in 2009. Working together, I believe we can transform the way the Department uses energy, which will improve capabilities for our warfighters, cut costs for American taxpayers, and ultimately save lives."

I spoke with the military liaison staff of Congressman Hinchey’s office about the focus for the Caucus. They pointed out that the Caucus was bipartisan and had representation on the Appropriations and Authorization Committees. The Caucus will serve as a central hub for information and education on Defense Energy and will host briefings and tech events to bring together members of industry, academia and government. Their goal is to “give defense energy security policy an additional synergistic platform that will contribute to mission success, protect lives, save money, and safeguard the environment”.

In addition to being a central repository for all things Defense Energy, my hope is that they serve as an accountability partner for DOD energy efforts. Responsibilities must be clearly articulated, authorities must be provided appropriately and accountability must be ruthless. Having someone from outside the house (and from the House) looking in can be very helpful in making sure that there is balance AND success in achieving the very aggressive goals that have been set by legislative decree, presidential order and internal DOD policy. I wish them all success. We need it! Dan Nolan

Thursday, July 7, 2011

National Power and Lights at Night: Veterans for Smart Power

Like Groucho Marx, I would rarely join any group that would have me as a member. That being said, I am a member of the U.S. Global Leadership Coalition (USGLC), specifically the Veterans for Smart Power faction. The USGLC is a “broad-based influential network of 400 businesses and NGOs; national security and foreign policy experts; and business, faith-based, academic and community leaders in all 50 states who support a smart power approach of elevating diplomacy and development alongside defense in order to build a better, safer world”. Veterans for Smart Power is for “veterans of all ages and ranks who share a commitment to elevating and strengthening our non-military tools of global engagement – alongside our military – so we can build a better, safer, more prosperous America and world”. My particular focus is on using all the elements of national power (economic, military, political and information) to promote the proliferation of clean, distributed energy in developing countries so that they do not become havens for terrorist organizations. When you turn the lights on, the cockroaches scatter.

As Kissinger said, America has no permanent friends or enemies, only interests. Our interest in other countries is as markets or as sources of raw materials, goods and/or services. It is in our interest to help foster the maturation of developing countries so that their economies are markets driven, their security assured, their people are represented and their press is free. Under these circumstances, nations tend to become good trading partners and all boats rise.

If you look at the map of the world above it shows you where the Pentagon thinks the 21st century wars will occur. What is most informative is if you look at that same map at night. Inside the zone, very little light at night. Light at night means kids can study, small manufacturing can occur and women need not travel far to gather wood for fires. Light at night is the beginning of economic development. But without safety and security that does not happen. Safety is being free from molestation in your person and property. Security is believing that you are free from molestation in your person and property. There is a difference. Too often in the last couple of decades, we have turned to the military to fix problems we failed to solve with the other elements of power. I would rather invest in a USAID schools program than deal with the results of a void filled by a madrasa.

Next week in Washington, D.C., the USGLC is hosting a conference to discuss a smart power approach to global leadership. Unfortunately, the reservations are maxed out. It is still possible to tune in to the address by Vice Chairman, JCS, GEN Cartwright’s address streamed on this Tuesday, July 12 at 9:15 AM. I recommend you check out the address and the organization. War is no longer just an extension of policy by other means (sorry, dead Carl); it is the failure to properly use all the tools available. Dan Nolan

Tuesday, July 5, 2011

Chumming the Water: Army Looks for Big Fish for PPAs

Several times in these postings, I have chided the government over the issue of vision without resources. It appears that the Army is now putting its money where its mouth is. Last week the U.S. Army Corps of Engineers (USACE), Huntsville office released a request for information for “Sources Sought: Renewable and Alternative Energy Power Production for Army Installations”. The estimated value of the proposition is between $50 million and $900 million.

Before we go popping champagne corks, we need to review the bidding. A Sources Sought notice is simply a summary posted by an agency so that they can see what is out there in support of a project possibility. It is not a solicitation for work, nor is it a request for proposal. (Reference the Federal Acquisition Regulations, Subpart 7.3 and OMB Circular A-76). If there are sufficient “sources”, the government may develop a scope of the work they require that can be later refined into a statement of work (SOW). The SOW would then be included in a request for proposal or quote (depending on specificity) for discrete project requirements. This is akin to chumming the water to bring the big fish in.

In this particular case the USACE “intends to solicit and award multiple, indefinite delivery, indefinite quantity (ID/IQ) contracts for use in competing and awarding Power Purchase Agreement (PPA) task orders”. They are looking for contractors to come build renewable and alternative energy production facilities for Army use that are on or near Army installations. The contractor will be responsible for financing, building, operating and maintaining energy production facilities. The reason a contractor would do this is for a guarantee that the Army and/or local utility (depending on the local laws) would purchase the power on a long term basis. According to the announcement, “the length of contract for the sale of the energy to the Army cannot exceed 30 years”. WHAT??

Ok, this is going to get a little legally nerdy. For a long time, only one of the Services felt that they had the authority to enter into long term power purchase agreements for renewable energy other than geothermal. U.S. Code 2922A says that the Service Secretaries can enter into energy or fuel contracts up to 30 years, but only for (1) “under section 2917 of this title” (geothermal) ; and (2) “for the provision and operation of energy production facilities on real property under the Secretary’s jurisdiction or on private property and the purchase of energy produced from such facilities”. Unless waived, it still requires the SecDef’s approval, so who is really calling the shot? Secretary Panetta! If you want to know what others think the new SecDef thinks, check out this Annie Snider NYT article. No direct statements from Sec Panetta, but much hopeful musings.

For some time the Navy has interpreted piece of Code differently. At the 2011 Association of Defense Communities, CAPT Clayton Mitchell presented NAVFAC Energy Offices view. In their opinion, Section A(2) is the operative statement, but applies to all energy, not just geothermal. This provision has never been used; the Navy’s Miramar Land Fill Gas project could be the first to test the water.

At last week’s USAF Alt Energy Symposium in Tuscon it was stated (by person unknown), that DOD was intending to move forward on the use of 2922A for energy other than geothermal and now we have the Army hinting that they will do likewise. All they have said is that it cannot exceed 30 years, not that they would do 30.

The big deal here is that 30 year power purchase agreements are a big deal. Banks like 30 year income streams guaranteed by the U. S. Government. Absent the default of the USG, this is money in the bank. It is also a way to energy security via third party financing and public/private partnerships. I hope that lots of companies submit for this “Sources Sought” and lots of great partnerships are established. I also hope that the scope of this is closer to the $900M than the $50M (Congress, are you listening?).

DOD has to have energy security and it is worth paying a nickel extra for clean, economic and secure energy. I have cautioned that DOD should not be looked to as the driver of the clean energy market. DOD’s mission is to fight and win the Nation’s wars, not stimulate the economy or open markets. That being said, a significant investment for energy the Army already needs, in renewable technologies cannot help but have a positive effect on those industries. We still have a long way to go. Dan Nolan