RENEWABLE ENERGY:

Army creates central office in bid for more private funding

In a bid to woo private investment for large-scale renewable energy projects on its more than 15 million acres of land in the United States, the Army today centralized its renewable energy work into a single office.

Previously, it was up to individual base commanders to decide that they wanted a solar array or a set of wind turbines and then to figure out how to finance the project. Commanders were often ill-equipped to navigate the legal hurdles of mechanisms like energy savings performance contracts and enhanced use leases, which allow the government to avoid the steep upfront costs of developing projects. And because the old system relied on the personal interest of the base commander, there was no way of making sure that the best natural resources were being tapped.

Logistical hurdles also made the Army less attractive to the private sector, said Katherine Hammack, the assistant secretary of the Army who oversees installations and energy.

The new Energy Initiatives Office Task Force will be "a one-stop shop with the expertise to work with the private sector to invest in these large-scale renewable energy efforts on Army land," Hammack told reporters today from the GovEnergy conference in Cincinnati.

Meeting the Army's goal of supplying a quarter of its energy consumption with alternative sources by 2025 will take $7.1 billion in private-sector investment, Army Secretary John McHugh estimated.

The new office will "develop a menu of opportunities" with a guaranteed customer for businesses, he said.

The office will do the upfront work of identifying available land, assessing natural resources and determining what state and local incentives may be available to developers. With those pieces in place, the Army hopes to convince the private sector to snap up more projects on the service's land.

As it chooses which projects to prioritize, the office is also considering a facility's energy security. Bases with high-priority missions, such as flying drones over Afghanistan, could go high on that list, as could bases with other energy initiatives such as microgrids under way.

The Army hopes to win the confidence of private investors by sharing its due diligence process with developers. The office has designed five playbooks outlining its selection processes, which it is making public.

Initially, the focus will be on projects in the continental United States that have the potential to produce 10 megawatts of power or more, with the goal of generating 2.1 million MW a year by 2022. The Army has the authority to negotiate contracts that go for as long as 30 years, though Hammack said not all projects will require that long of a payback period.