US Army moves to attract $7.1 bil in private money for renewables

Washington (Platts)--15Sep2011/317 pm EDT/1917 GMT

The Army on Thursday launched a special task force that it hopes will attract $7.1 billion in private-sector investment over 10 years to help expand the use of renewable energy at bases around the country.

Meant to be a "one-stop shop" for companies interested in building large-scale renewable-energy projects on Army facilities, the Energy Initiative Task Force will work to increase the use of solar, wind, geothermal power and other technologies in the face of declining Pentagon budgets.

"This is something that the Army does not have the budget to put in the amount of renewables we need to increase energy security," said Katherine Hammack, the Army's assistant secretary for installations, energy and environment.

The task force aims to attract enough projects to supply 2.1 million MWh/year and will focus on projects larger than 10 MW, but could go as large as 1 GW, Hammack told reporters.

Currently the group is developing an initial 20 solicitations, and expects to release the first requests for proposal in spring or summer 2012. It is also in the midst of streamlining the bureacracy involved when companies work with the Army on large-scale renewable projects.

The Pentagon spent $20 billion on energy in 2008 and is currently the government's largest energy consumer, accounting for 80% of federal energy use. The Army alone consumes about 21% of that, using 9.1 million MWh/year, according to a report from the Pew Charitable Trusts in 2010.

That report found that the heavy reliance on off-base power supplies left facilities vulnerable to power outages.

Led by Richard Kidd, the deputy assistant secretary for energy and sustainability, the task force will be staffed with a "cadre" of renewable energy, finance and project-management experts, and includes six full-time staff and other part-time Army personnel. Prior to working with the Army, Kidd was in charge of the Department of Energy's Federal Energy Management Program.

While Kidd said he is confident the Army is committed to the task force's mission, he also said it would be a challenge.

"I have no illusions about how difficult some of these things will be to achieve," Kidd said.

The Army hopes to attract industry by exchanging land-use rights for electricity, providing a long-term market, and by allowing the companies to sell unused electricity outside of the facility.

"One of our slogans for this is, 'We've got the land and the demand,' " Hammack said. "The developers have the opportunity to make money from selling energy onto the grid, or it could be a local utility that makes money from selling energy onto the grid."

The task force has scheduled a summit in Washington on November 3 to help get the word out to industry.

--Derek Sands, derek_sands@platts.com

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