1. Renewable Energy Plan 26 OCTOBER 2011 Presented by: Energy Transformation Office (ETO)
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6. RENEWABLE ENERGY PLAN PATH FORWARD RENEWABLE ENERGY PLAN Solar Geothermal Geothermal Exploration 5 MW Site Clearance â Solar & Geothermal (EA) 245 ac Solar - 4 MW Solar - 5 MW (UpRange) Review & Investigate PPAs, EUL, ESA, ESPC & LGIP Decision Point Geothermal - Expand to 20 MW (EA) Site Clearance 42 ac, 4 MW Solar Enclosure 2 2011 2018 2012 2013 2014 2015 Green Net 0 by 2015 Future Growth PPAs â Power Purchase Agreements EUL â Enhance Use Leasing ESA â Energy Service Agreement ESPC â Energy Savings Performance Contract LGIP â Large Generation Inter connection Permits EIS â Environmental Impact Study REC â Record of Environmental Consideration EA â Environmental Assessment WAPA â Western Area Power Administration
POWER PURCHASE AGREEMENTS (PPAs): Power purchase agreements (PPAs) allow the Army to finance on-site renewable energy projects without up-front capital costs. With a PPA, a developer installs a renewable energy system on Army property under an agreement that the Army will purchase the power generated by the system. The Army pays for the system through these power payments over the life of the contract. The developer owns, operates, and maintains the system for the life of the contract. PPA - The most critical, and often most complicated component of a renewable energy project is the negotiation and execution of a long term contract for the sale of the electricity generated by the project â called a power purchase agreement or PPA. For the seller, who is generally the owner or developer of the renewable project, a PPA is a necessary part of securing equity and debt financing because it demonstrates a long-term revenue stream for the project. The buyer, often a utility, may be motivated to secure a long-term agreement for renewable energy to meet a state Renewable Portfolio Standard (RPS), now in effect in twenty-eight states, or by the potential of a national RPS, which has been identified as a key policy proposal of the Obama administration. The PPA sets forth the complex, long-term relationship between the parties and includes key provisions regarding price, transfer of environmental attributes, project construction and timing, credit support, defaults, and damages. The most heavily negotiated of these PPA provisions address the tension between buyer and seller resulting from the need to equitably allocate uncertainties that are inherent in renewable energy projects â i.e., capacity factor in wind and solar projects, future regulatory requirements, transmission curtailments, and system upgrade costs. ENHANCED USE LEASING (EUL): The Enhanced Use Leasing (EUL) process allows military installations to out-lease land to a private or public entity for the development of renewable power or other energy projects. Installations can out-lease land, enter into long-term or short-term leases, provide greater flexibility for facility reuse, and receive fair market rental, (either in cash or in-kind), as consideration for the leased property. In exchange, the developer can provide power generation facilities, manage distribution systems, and deliver critical energy needs without significant upfront installation investment. EUL - The Army Enhanced Use Leasing (EUL) Program, managed by the U.S. Army Corps of Engineers, Baltimore District, engages a competitive process, private sector entities to acquire and leverage value from non-excess real estate assets on Army and select Department of Defense (DoD) Installations. With the expanded authority of Title 10, USC § 2667, each of DoD Military Departments have the authority and incentive to obtain a broad range of financial and in-kind considerations of for leasing opportunities. The changes to Section 2667 expand the purpose for which lease proceeds may be used, and augment the types of in-kind consideration which may be accepted for leases. These changes maximize the utility and value of installation real property and provide additional tools for managing the installationâs assets to achieve business efficiencies. ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC): An Energy Savings Performance Contract (ESPC) is a partnership between the Army and an Energy Service Company (ESCO). In consultation with the installation, the ESCO designs and executes projects that meet the Army's needs by improving energy efficiency of existing facilities and implement new renewable energy capability where economics permit. The ESCO arranges the financing for the project and guarantees that the improvements will generate sufficient energy cost savings to pay for the project over the term of the contract. After the contract ends, all additional cost savings accrue to the Army. ESPCs allow installations to accomplish energy savings projects without up-front capital costs. ESPC - Energy Savings Performance Contracts (ESPCs) allow Federal agencies to accomplish energy savings projects without up-front capital costs and without special Congressional appropriations. An ESPC is a partnership between a Federal agency and an energy service company (ESCO). The ESCO conducts a comprehensive energy audit for the Federal facility and identifies improvements to save energy. In consultation with the Federal agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary financing. The ESCO guarantees that the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract. After the contract ends, all additional cost savings accrue to the agency. Contract terms up to 25 years are allowed.