North CarolinaMilitary Business Center Army RenewableEnergy RFP Forum May 2, 2012
Agenda• Welcome, introductions and purpose• NCMBC introduction• Emerging patterns in DoD energy acquisition• Review of the draft RFP• Teaming for government contracts• Background info, responding to the future RFP• Discussion, questions and networking
Military Impact• Total DoD annual impact in NC: $23.4 billion• Second largest sector of economy, 7% of GDP• 4th highest military presence in nation – 5 major installations – 116,073 active duty personnel (FY2009) – 16,000 annual military personnel transitions• Growth: BRAC and “Grow the Force”
Mission & GoalsMissionTo leverage military and other federal businessopportunities for economic development andquality of life in North CarolinaGoals1 - Increase federal business for NC companies2 - Integrate military/families into workforce3 - Support defense-related recruitment
Business Development Team• Create awareness of opportunities, recruit NC firms• Identify current opportunities, notify NC firms• Assist firms with solicitations, quotes, proposals• Pre-position, develop sub-contract opportunities CY2011 154 Contracts $262 - $2,891 million CY2005-2011 1,213 Contracts $2,808 - $8,371 million As of: 16 APR 2012
DoD Procurement & NCMBC Business Developers Alleghany Person Warren Northampton Gates Ashe Surry Stokes Rockingham Caswell Vance Pa Granville Hertford sq Halifax Watauga Wilkes uo Ch Yadkin ta Forsyth ow Guilford Orange Franklin Bertie nk Mitchell Avery an Davie Durham Nash Caldwell Alexander Yancey Alamance Edgecombe Madison Washington Davidson Wake Martin Tyrrell Dare Burke Iredell Wilson Rowan Randolph Chatham McDowell Catawba Buncombe Pitt Beaufort Haywood Swain Rutherford Lincoln Lee Johnston Greene Cabarrus Hyde Graham Jackson Henderson Gaston Stanly Moore Harnett Wayne Polk Cleveland Mecklenburg Lenoir Macon Montgomery Transylvania Craven PamlicoCherokee Cumberland Sampson Clay Anson Richmond Hoke Jones Union Duplin Scotland Carteret Onslow Bladen Robeson Pender Greater than $50 million Columbus New New Hanover $20 million to $50 million Brunswick $10 million to $19 million Less than $10 million NCMBC – Serving Statewide! DoD Data FY2009
Priority and Strategic Initiatives 2012• Future opportunities and industry focus – Energy/Environmental, Construction, Logistics, etc• Teaming/subcontracting initiative, with major primes• Expand, promote business resources, training – Basic, intermediate (DCA), advanced training• Support recruitment of defense contractors• Workforce initiatives (I Hire Military, StayNC)
Upcoming NCMBC Events• Consolidated Teaming Forum (8 MAY 8)• Defense contractor academy (JUN – AUG)• NC Federal Environmental Symposium (13 JUN)• NC Federal Advanced Technology Symposium (17 JUL)• Defense Trade Show (7 AUG)• NC Aerospace Supplier Conference (14 AUG)• 2012 Federal Construction Summit (10-11 OCT)
Perfect Storm Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 16
Army Energy in Perspective – 2010 United States Federal Government Department of Defense Army 23% Federal DoD FY10 Highlights Gov 1% 80% - $2.5+B Operational Energy Costs - $1.2 B Facility Energy Costs - +64% fuel costs in Afghanistan - not counting cost to deliver and secure - +$400 million increase in fuel costs expected in FY11 across DoD in Afghanistan 35% 24% 42% 65% 76% 58% Facilities U.S. = 98,079 Trillion Btu DoD = 819 Trillion Btu Vehicles & Equipment Fed Gov = 1,096 Trillion Btu(FY09) U.S. Army = 189 Trillion Btu (Tactical & Non-tactical)Sources: Energy Information Agency, 2010 Monthly Energy Review; Agency Annual Energy Management Data Reports submitted to DOEs Federal EnergyManagement Program (Preliminary FY2010) Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task Force UNCLASSIFIED 17
Army Energy Program• Change the Culture: Every Soldier a Power Manager ̶ Senior Energy & Sustainability Council (SESC) / Senior Energy Executive (SEE) ̶ Energy & Sustainability must be a consideration in all Army activities ̶ System-wide approach for designing base camps to capture efficiencies• Drive Efficiency across the Enterprise – Technology/policies will reduce energy footprint – Leverage public/private financing to accelerate efficiency projects – Implement technologies to significantly reduce energy footprint in the field• Build Resilience through Renewable / Alternative Energy – Diversify sources of energy to allow for continued operations during energy disruptions – Attract private investment to develop large-scale renewable energy projects – Provide flexibility & resiliency by developing alternatives & adaptable capabilities• Science & Technology – Army’s future efforts depend on Science & Technology investments Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task Force UNCLASSIFIED 18
Army Power & Energy Basing Soldier Vehicles Installation Contingency Tactical Non Tactical Air Land OPERATIONAL ENERGY NET ZERO STRATEGY “Grand Challenges”• Give soldiers and leaders capability to manage energy status, resources, performance• Significantly reduce energy footprint• Provide flexibility and resiliency by developing alternatives and adaptable capabilitiesPower and Energy Strategy White Paper, Army Capabilities Integration Center/Research, Development and Engineering Command/Deputy Chief of Staff, G-4, US Army, 1 April 2010 Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task Force UNCLASSIFIED 19
Basing – Net Zero Installations A Net Zero ENERGY Installation produces as much energy on site as it uses, over the course of a year A Net Zero WATER Installation limits the consumption of freshwater resources and returns water back to the same watershed so not to deplete the groundwater and surface water resources of that region in quantity or quality A Net Zero WASTE Installation reduces, reuses and recovers waste streams, converting them to resource values with zero solid waste to landfill A Net ZERO INSTALLATION applies an integrated approach to management of energy, water, and waste to capture and commercialize the resource value and/or enhance the ecological productivity of land, water, and air Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task Force UNCLASSIFIED 20
Tracking Net Zero Progress Net Zero ‘Scorecard’Patterned after the federalOMB Sustainability & EnergyScorecard Net Zero Trends Pilot Installations’ trends by fiscal year, using their Scorecard data Success Stories For more info on Installation successes: • https://eko.usace.army.mil/public/fa/netzero/ • http://army-energy.hqda.pentagon.mil/netzero/ Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 21
Basing – Net Zero Installations Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 22
Innovation The world will not evolve past its current state of crisis by using the same thinking that created the situation. - ALBERT EINSTEIN Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 23
Army Renewable Energy NOT New Fort Carson, CO 2 MW PV Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 24
Army Approach to Achieve Renewable Energy Goals Path to 25% Renewable Energy by 2025 - Notional 10,000,000 Energy Efficiency Gains 9,000,000 funded by appropriated funding, 8,000,000 ESPC, UESC 7,000,000 Traditional EnergyEnergy Consumption (MWh) 6,000,000 5,000,000 4,000,000 3,000,000 25% (NDAA 2010/ EO 13514) 2,000,000 7.5% (EPAct 2005) Requires leverage of 1,000,000 private sector funding, EUL, PPA Renewable Energy - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task Force UNCLASSIFIED 25
Where the Army Needs to Go Major Issues Declining Budgets Specialized Expertise Enterprise Strategy Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 26
Energy Initiatives Task Force Energy Initiatives Task Force (EITF) announced by the Secretary of the Army on August 10, 2011 at GovEnergy. EITF will serve as the central management office to implement cost-effective large-scale renewable energy projects on Army installations leveraging industry financing. Features: • Large-scale renewable energy projects - Greater than 10MW projects - Coordinate with installations for 1-10MW projects - Third-party financing authorities: PPAs, EULs, UESCs and ESPCs Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 27
Benefits of Centralized Approach• Project Prioritization – Focusing on the most promising energy sources and the most favorable markets, supported by required expertise• Improved Consistency and Communication – Providing a well-defined process through a central point of communication with industry• Economic Optimization – Leveraging economies of scale across multiple projects• Goal Compliance – Managing projects across all installations, leading to a more direct path to meeting energy mandates and goals Outcome: Reliable program for Army and industry Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 28
Energy Initiatives Task Force Mission Strengthen Army energy security and sustainability by developing a comprehensive capability, and planning and executing a cost-effective portfolio of large-scale renewable energy projects by leveraging private sector financing. Vision Securing Army installations with energy that is clean, reliable and affordable. Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 29
EITF Organization Office of the Director Director - Richard Kidd Executive Director - John Lushetsky (DOE) Heidi Hansen, OGC Dedicated Attorney Planning Division Execution Division Outreach Division Kathy Ahsing, Director Alan King, Director Jon Powers, Director Clyde Reynolds Douglas Waters Jeff Smith Erich Kurre MAJ (P) Kevin Lovell Paula SkipperU.S. Army Corps of Engineers Defense Logistics Agency Department of Energy NREL and other DOE Labs Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 30
Roads to Project CompletionAcquisition Strategies: Variousapproaches to acquiring energy Large-scale renewable energy projectsDevelopment strategy:Planning and execution ofproject opportunities Assistant Secretary of the Army (Installations, Energy & Environment) 31
Army’s Enabling AuthoritiesThe EITF will leverage existing authorities to meetsustainability and renewable energy goals:• Utility Energy Services Contracts (10 USC 2913)• Enhanced-use Leasing (10 USC 2667)• Easement authority (40 USC 1314)• Utility purchase authority (FAR Part 41)• Power Purchase Agreements (10 USC 2922a)• Energy Savings Performance Contracts (10 USC 2865)• Cooperative Agreements (31 USC 6305)• Sale of electrical power from alternative energy and co- generation facilities (10 USC 2916) Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 32
Acquisition Approach• The EITF will develop a multi-pronged acquisition approach that will provide required flexibility.• We expect to utilize multiple contracting offices, potentially including the Army Corps of Engineers and Defense Logistics Agency, as well as DOE power marketing administrations (e.g., WAPA, BPA, TVA). Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 33
Acquisition Approach (cont’d)• The EITF anticipates leveraging a Multi- Award Task Order Contract (MATOC) for PPAs – RFP plan for release in CY1Q2012 with anticipated award in CY1Q2013 by the USACE (HNC). – Up to 30-year PPA term – Small Business participation consideration – Structured to create greatest competition• Additional single project procurement actions will be considered. Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 34
Energy Security vs. Affordability• The goal of the EITF is to increase Army installation energy resilience in a cost- effective way.• DOD Instruction 4170.11 (11 DEC 09) states that renewable energy may be purchased for a “fair and reasonable” premium. Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 35
Environmental Assessments• The EITF will utilize the Army Environmental Command (AEC) to perform National Environmental Policy Act (NEPA) assessments for projects.• The EITF will fund NEPA actions as required to address cost and schedule risk. Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 36
Project Development ProcessThe EITF is producing a process for developing large-scalerenewable energy projects that is clear, consistent andtransparent. This process will be described in a ProjectDevelopment Guide that will detail the five phases of projectdevelopment. Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Opportunity Project Project Post-Closing Project Identification & Negotiations Management Validation Solicitation Due Diligence & Closing Renewable Energy Project Development Guide Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 37
Structured Process for Identifying Opportunities Stage 1 Stage 2 Stage 3 Stage 4 Potential Initial Renewable Opportunity Site Stakeholder Project Energy Assessment Buy-in Charter ScreeningOpportunities Stage 1 Stage 2 Stage 3 Stage 4 State regulatory, policy, market, and Stage 1 validation with Project concept vetted Project charter renewable resources installation SMEs signing Project deconfliction Installation land availability, GIS, and Site visit/walkthrough: (mission compatibility, Army stakeholder master plan review siting determination NEPA scoping) approval Mission & environmental impacts Preliminary stakeholder Stakeholder analysis Execution Team Financial viability across alternative meetings (including and mitigation plans formulation financing contracts utility) Project development risk factors Increased due diligence and decreased risk early-on, through incremental analysis and buy-in – resulting in a viable, defined and well-supported project Assistant Secretary of the Army (Installations, Energy & Environment) Energy Initiatives Task Force UNCLASSIFIED 38
Current Opportunity Assessments Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 39
Questions and Answers Learn More at www.armyeitf.com Assistant Secretary of the Army (Installations, Energy & Environment)Energy Initiatives Task Force UNCLASSIFIED 40
AMERICA’S ARMY:THE STRENGTH OF THE NATION ARMY STRONG Assistant Secretary of the Army (Installations, Energy & Environment) 41
Review of the Draft RFP• Objective• Deliverables• Contract logistics• Upcoming milestones
Objective• To procure locally generated renewable and alternative energy using PPA or equivalent; there is no intention of acquiring generation assets• The contractor: develop, finance, design, build, operate, own and maintain plant• Project locations may be on or near govt property
Deliverables• 001: Solar- PV or CSTP PPA- 3 years, 7 options• 002: Wind PPA- 3 years, 7 options• 003: Biomass PPA- 3 years, 7 options• 004: Geothermal PPA- 3 years, 7 options• 005: Minimum Guarantee- $500• Other Alt. Energy Technologies will be considered (C.4.f. p 26)• “The Contractor shall furnish all labor, materials, tools, equipment and incidentals necessary to supply and deliver utility service to the location specified in the Task Order from a Contractor-owned renewable or alternative energy system, in accordance with the Performance Work Statement “
Contract Logistics• Multiple IDIQs- portion set aside for Small Business• Task Orders awarded against basic IDIQ using fair opportunity procedures• Task Orders will be Firm Fixed Price• Minimum of $500, maximum of $7.0 B over 10 years• Every 18 months the Govt will re-evaluate market- and may “on-ramp”: advertise for and accept proposals• Task Orders: IFPs by technology of offeror selected• Reference: FAR 16.505 and DFARS 216.505-70
Small Business Set-Asides• If the Task Order is for production of:• 4MW-12MW: The Contracting Officer will first consider a Small Business Set-Aside – CO will request a letter of interest from Small Businesses- 2 or more responses will result in a Small Business Set Aside• Under 4MW: Reserved for Small Business – Will become unrestricted if no acceptable proposals are received• 50% Small Business Participation Goal
Upcoming Milestones• Comments on Draft RFP –Deadline: March 21, 2012• Pre-proposal Conference- includes presentation on RAE program, scope of work, and Q and A session –TBA in Final RFP• Final RFP- TBA
Background Information for Responding to the Future RFP
Acquisition TrendsBest Value Procurements Continue to procure MATOCs and SATOCs Increased use of Standalone Acquisitions Increased use of Regional/Local Contracts
The New Reality for Defense PrimesShorter timelines. Strict contract terms. Greater value.LEED construction Mandates.The Department of Defense (DoD) is overhauling the way itacquires products and services, and it’s changing the rulesthat dictate how defense primes conduct business. There isa huge paradigm shift taking place in all FederalConstruction.Defense Primes are now moving to a strategic partneringparadigm. Instead of managing dozens if not hundreds ofvendors for a project, focus on the several who can delivertrue business value. This provides Primes with flexibilityand lowers fixed costs.
Large Scale Wind Energy Generation1. Sustainable Technology:•Technologies desired are those that have the smallest environmental impact.•Describe any potential impacts of your technology that could be limiting forenvironmental or safety reasons. For example, issues associated with flyingwildlife, noise production, radio frequency or other electronic noise generation,acoustic noise, etc.•Describe your technical approach to utilize large scale wind to generate a ratedpower of <50 MW. Please state general design criteria including size and heightof the turbines, foundation requirements, etc. Note that the supporting facilities,such as roads and electrical transmission, are limited or non-existent in manyareas of the installation where wind production could be implemented.•Would inclusion of 30 miles of transmission lines and temporary roaddevelopment, as part of the project, eliminate the economic viability of a windfarm <50MW?•The Army is in the process of conducting programmatic NationalEnvironmental Policy Act (NEPA) analyses for renewable energy generation. Itwill be the responsibility of the developer to fund and coordinate any additionalsite-specific NEPA actions for the proposed facility that may be required.
2. Excess Electrical Production•Describe the approach for regulatory issues and other agreements that need tobe addressed for the developer to be able to sell excess power production.•Is there an economically feasible and reasonable cost of electricity under aPower Purchase Agreement (PPA), or similar instrument, for a project that doesnot sell excess electricity?•Describe the approach for the regulatory issues regarding power generation onfederal land in that state and transmission of power for consumption oncontiguous federal land in the state and vice versa.3. Financing•The Army intends on pursuing project financing methods where the Armyprovides the land and access as well as a consumer of the electricity, but allowthe developer to provide the upfront capital to develop and install the equipment.The investment is paid back by the Army purchase of electricity over 20+ yeartimeframe.•Is the PPA contractual vehicle to secure private capital to build electricalgeneration on federal land with a guarantee of electrical power purchase by thefederal government a viable option in the regulatory environment of this area?
•What opportunities exist for the use of Extended Use Leases, EnergySavings Performance Contracts, Utility Energy Savings Contracts, orother potential authorities that allow public-private partnerships toobtain private capital to develop technology on Army land that is paidoff over the long term via energy savings or direct purchase of thecommodity?•If DOD decides to pursue acquisition of these technologies,competitive future proposals would have the cost of electrical powerto DOD would be lower than or equal to the current grid electrical cost(FY2010 blended rate of $0.06/kw-hr) and would allow for Army toretain all Renewable Energy Credit (REC) certificates. If this is notviable, what is the best cost of power that can be expected for thetechnology?
Solar Technology:•Describe the technology you would recommend. Do you consider this acommercial technology? If not what barriers have to be overcome to achievecommercial status?•Technologies desired are those that have the smallest environmental impact,including water usage.•Describe any potential impacts of your technology that could be limiting forenvironmental or safety reasons. For example, issues associated with panelreflectance and air traffic, concentrating solar energy, noise production fromthe operation of Stirling cycle generators, radio frequency or other electronicnoise generation, etc.•For energy generation (assuming sufficient, available, and NEPA vetted landand appropriate distribution tie in were available), describe the technicalapproach of the project to provide electricity for the training areas noted inTable 1. Assume standard grading and land preparation and 1.5 kilometerdistance to the grid tie in.•What is the minimum size CSP trough plant (in MW) that would beconsidered economically viable to develop and finance?•The Army is in the process of conducting programmatic NationalEnvironmental Policy Act (NEPA) analyses for renewable energy generation.It will be the responsibility of the developer to fund and coordinate anyadditional site-specific NEPA actions for the proposed facility that may berequired.
Given Conditions for Geothermal Development•Geothermal resource is accessed on Bureau of Land Management withdrawn lands forthe US Army•Water temperatures between 170 degrees to 190 degrees Fahrenheit•Assume sufficient flow, water table level and heat recovery (please specify what youwould consider sufficient)•Well depths of roughly 2000 to 4000 feet•Target generation capability from this resource is up to 20 MW•The overall objective is to answer the question:Given the above conditions, what technologies and strategies are available toproduce near base load electrical power from this geothermal source?
. Sustainable Technology: Mid to Large Scale Energy Storage•Technologies desired are those that have the smallest environmental impact, including waterusage.•Describe any potential impacts of your technology that could be limiting for environmental orsafety reasons. For example, issues associated with hazardous chemicals and other materials,potential for catastrophic failure of high energy density systems, radio frequency or otherelectronic noise generation, ambient acoustic noise, water use, mechanical hazards, etc.•Describe the carbon dioxide (equivalent) output of greenhouse gases from your technologyapproach.•Describe the technical approach to achieve 0.5 to 10MWh increments that could be utilized toprovide energy storage at distribution voltage (13.8kV) that comes from the utility grid and/orintermittent renewable energy sources such as photovoltaic panels, concentrating solar thermal-electric power, and wind.•The Army is in the process of conducting programmatic National Environmental Policy Act(NEPA) analyses for renewable energy generation. It will be the responsibility of the developerto fund and coordinate any additional site-specific NEPA actions for the proposed facility thatmay be required.
2. Technology Maturity•With respect to the Department of Defense (DoD) Technology ReadinessLevel (TRL) scale, what is the maturity of your energy storage technology?•What is the footprint of your system (include all system components) in termsof acres/MWh or ft2/MWh, as appropriate?•What is the control method / processes that you use to charge and dischargeyour system?•What is the operation and maintenance requirement for your system?•What is the expected availability of your system?•What is the expected lifetime of your system or number discharge/rechargecycles? This may be described in the lifetime and replacement frequency forspecific system components, if needed.•What is the viability of your technology as applied to distributed (buildingscale or clustered buildings and microgrids) and large scale (50+MW-hr)energy storage?•What is the charge time to nominal capacity for your storage?•What is the discharge rate (amps)? Is this rate variable (minimum andmaximum rate)?•What is the commercial history of your technology?
3. Financing / Economic Feasibility•What is the Rough Order of Magnitude (ROM) cost range permegawatt-hour associated with your energy storage technology?Large scale photovoltaic systems have demonstrated $3M-$4M/MWinstalled costs. What would be the impact of adding 50% energystorage to a large scale photovoltaic plant (assume 20MW total peakproduction)?•Given the willingness of the Army to consider public-private venturesto finance energy projects, what ideas do you have with regard toprivate financing of energy storage projects through contractinginstruments such as Energy Savings Performance Contracts (ESPC),Power Purchase Agreements (PPA), Enhanced Use Leases (EUL),etc.?
Contact Information• Scott Dorney, Executive Director, 910-678-0190, firstname.lastname@example.org• Bill Greuling, Program Manager, Business Development, 910-578-2626, email@example.com• Anne Campbell, Business Development, Energy, 910- 938-6785, firstname.lastname@example.org• Carolyn Bunting, Program Manager, Technology, 910-578-2579, email@example.com• Mickey Finn, Program Manager, Strategic Initiatives, 910-390-4011, firstname.lastname@example.org