Transcript The Southeast Energy Initiative Considerations for Installation Energy Security and Surety Gordon L.

The Southeast Energy Initiative
Considerations for Installation
Energy Security and Surety
Gordon L. Simmons, P.E.
Chief, Engineering Division
Savannah District
Energy Considerations in the Southeast
Issues:
• Population in the South Atlantic states expected to grow by ~32% by
2030 with a related increases in energy demand
• Greenhouse gas emissions reduction by replacing coal plants with
other forms of alternate and renewable sources
• Requirements toward energy and fossil fuel reductions (EPAct05,
EISA07, EO 13423, and EO 13514)
Solutions:
• Increased focus on reducing energy intensity and increasing
conservation
• Providing a level of energy security to Installation Commanders while
adding resiliency to the “Grid”
… All while protecting the interest of the tax payer and being
good stewards of the environment
2
Savannah District Focus Areas
The overall
Complex
Existing
Buildings
Alternate Energy,
Smart Grids,
Modernization,
Critical
Infrastructure,
Energy Security
Conservation,
Retrofit,
Recommission
Facility Design
being enhanced by
the SAS/SAM
Center of Energy
Excellence
3
What’s coming
New Construction
Large renewable
or alternate
power – The SAS
Southeast
Energy Initiative
Pilot Projects Conclusions
 Energy savings are site and facility specific
 EISA 2007 energy targets are a high bar to achieve
 Higher the internal loads the more difficult energy savings become
 Dining facilities are difficult, barracks are easier, admin somewhere in between
 Generally speaking, dependent on facility type:
o 25-35 % energy savings: the building yields the maximum energy savings for the
lowest investment
o 35-60 % energy savings: each increment of energy saved comes at an
increasingly higher investment
o Above 60 %: May be cost prohibitive for facility types with high internal loads.
Requires that we introduce renewable sources.
 Introduction of renewable energy rarely pays back in the life of a single
facility. Need to aggregate sources and needs across a grid.
4
Large Scale Renewable or
Alternate Power
SAS Energy Cx designs or retrofits
existing buildings to the more cost
effective energy efficient solution
Ft. Anywhere
Renewable Energy
Generation
5
Work with EITF and
Installation for large
scale secure power
solutions on the
installation
6
Large Scale Renewable Projects
The EITF
Phase 1
Opportunity
Identification
“Identify and Prioritize
Opportunities”
Target: 90 Days
Phase 2
Project
Validation
“Developing an Opportunity
Into a Project”
Target: 90-180 Days
Current: 1-3 years
•Conduct GIS Screening to ID
installations w/ RE potential
•Analyze maturity of effort
•Assess top level economics
•Identify sites on
installations w/ master
plans
•Visit installation and
confirm data on sites
•Assess Environmental and
Operational Issues
•Conduct Go/No Go
Assessment
•Prioritize sites in portfolio
on Army RE goals
•Sign MOU with
installations
•Conduct initial legal and
regulatory review
•Initiate NEPA assessments
•Provide full Economic Case
Analysis (ECA)
•Coordinate Off-Take and
other Stakeholder Input
•Define Real Estate strategy
•Define System Integration
approach
•Assess Mission Operation
and Security Impacts
•Obtain Required Approvals
and Clearances
•Define Acquisition
Approach
Phase 3
Acquisition
Phase 4
Building
Infrastructure
“Getting a Binding
Agreement”
Target: .5-1 Years
Current: 1-3 Years
“Constructing Assets;
Structuring Services”
Target: 1-3 Years
“Managing the Operation
and Transition to Closure”
Target: 10-30 years
•Develop Acquisition
Requirements and
Evaluation Criteria
•Solicit Proposals from
Industry
•Select “Highest Ranking
Offeror”
•Obtain Required Approvals
and Clearances
•Finalize Business
Arrangements
•Award Contract or Execute
Lease
•Monitor and Enforce
performance, quality,
schedule and warranty
commitments
•Structure and Implement
Support Service Agreements
to Developer
•Structure and Account for
Lease Payments or In-Kind
Consideration
•Structure and Account for
Power Purchase Payments
•Structure and Implement
Service Agreements with
Developer
•Structure REC transactions
and accounting mechanisms
•Track PPA Payments
•Track REC management
•Conduct enforcement of
performance, quality, and
warranty commitments
with operator
•Conduct validation of O&M
activities vs O&M
plan/schedule (case by case)
•Manage Counterparty Risk
(credit monitoring)
•Develop
transition/maintenance/decommissioning plan
•Update installation energy
plan
The EITF Renewable Energy Project Development Guide
7
Phase 5
O&M and
Closure
Current EITF Assessments
WA
OR
NY
PA
IA
NV
UT
CA
CO
IL
MD
KS
NC
AZ
OK
NM
TX
Fewer
opportunities
here
HI
Current Installation Engagements
8
Fort Bliss, TX
Fort Bragg, NC
Fort Carson, CO
Fort Detrick, MD
Fort Drum, NY
Fort Hunter Liggett, CA
Fort Irwin, CA
Fort Lewis, WA
Fort Riley, KS
Fort Sill, OK
Iowa Army Ammo Plant, IA
Kahuku Training Area, HI
Letterkenny Army Depot, PA
Oregon Army National Guard, OR
Parks Reserve Forces Training Area, CA
Rock Island Arsenal, IL
Sierra Army Depot, CA
Tooele Army Depot, UT
USAG-Hawaii, HI
West Point (U.S. Military Academy), NY
White Sands Missile Range, NM
Yuma Proving Ground, AZ
AFB
Ft. Anywhere
Biomass
Regional Energy
Initiative
Other
Federal
Installation
9
Tenant
Agency
Navy Yard
SMR
Introduction to Regional
Initiatives
Obtain secure regional renewable energy at the best value possible:
 Combining and resolving the needs of multiple Federal partners on multiple
sites with a best value solution that provides economy of scale and shared
investment.
 Providing a focus on regional solutions and economics and the development
of regional expertise.
 Development of partnerships with industry, utilities, investors, and customers
for successful, repeated, distributed RE projects within the region.
 Providing available Federal land at no cost
 Providing land with NEPA clearance to reduce risk
 Providing a guaranteed customer base of Federal users
 Shared risk and reward with the goal of providing the best value solution
10
BLUF - Southeast
Energy Initiative (SEEI)
 Savannah District is leading Army/ Federal Partners to produce
commercial RE Power in various states in the southeast:
 Army/Federal Partners – Customers / Initial Investment / Strategic
Mgmt
 USACE Savannah District – Regional Leadership/ Planning/
Execution/ Oversight of PPA
 DOE/ Savannah River National Lab – RE/Alternate Technology/
Existing Pilot Project/ Feasibility
 Local Utilities – Business Plan / RFP / PPA/ Transmission/ Marketing




11
Goal: Secure Energy Solutions, renewable, alternate, hybred
Private investment $400-$600 million to $1 billion
Biomass, Solar, Waste-to-energy, small modular reactors
Power Purchase Agreement (PPA) or ESPC
The Savannah District/Savannah River
National Lab Team
The Savannah River National Lab is a premier research,
development and execution agent on the leading edge of all
state-of-the-art clean energy opportunities
 Existing partnership with USACE and Savannah District
 Proven applications of Private-Public partnerships in the
development of renewable energy projects that supplement the
Site’s power requirements
 Active in applying multiple forms of energy independence
research and development that will be a benefit to the Army and
the nation:





12
Regional Industrial Hydrogen
Fuel cells
Small Modular Reactors and fuel repurposing
Carbon neutral fuels (Biomass, algae, recycled CO2)
Carbon fuels recycling
Southeast Energy Initiative
SRS Model - Biomass
It’s not just a theory…
Pilot Project at Savannah River Site:
 Commercially funded biomass plant
 40% of site’s required electricity
 100% of site’s required steam
 Design/build/operate by a commercial
firm for 19 years (ESPC)
 The government still owns the plant
from day one
Minimum Federal investment
Actively partnering and holding discussions for
expansion into the region:
 Ameresco Federal Services
 Forts Gordon, Stewart, Bragg, Jackson
 Utility Consortiums (SCANA, Duke…)
 DOE, DHS, others
13
Ameresco is providing turn-key delivery of this
20 MWe/200,000 pph steam biomass
cogeneration plant at the Savannah River Site
under an ESPC. Completed in Sept 2011 and
now fully operational.
Southeast Energy Initiative
SRS Model – Waste to Energy
Private – Public Partnership
 Three Rivers Solid Waste Authority
 (Local) Government Owner
 Gas Collector
 Kimberly-Clark
 Gas Purchaser (15 years)
 Siemens Building Technologies
 Plant Operator/Pipeline
 Financier
Landfill Gas to Energy Project
14
 Provides 40% of K-C’s energy needs,
increasing to 90% as plant grows
 Reduces greenhouse gases by 170,000 tons
per year
 Generates $150,000 revenue/month
SEEI Future Strategies
For Example - Biofuels
 Energy Independence
 Reducing dependence on foreign oil
 Small scale demonstrations underway in US
 Producing ~2000 gal/acre/yr
 Utilize large quantities of land and carbon
dioxide
 Algae farm
 Carbon source
• Biomass Plants
• Landfill
SEEI is looking beyond the
immediate need toward
applying other developed
solutions to the southeast’s
demands
15
Algae farm project in Hawaii
REI Keys to Success – Giving All
Parties What they Need
 Developers need “shovel ready” projects to back up PPA
RFPs – Completed environmental and real estate
reviews, resource assessments, etc.
 Financiers need PPA (with developer) that “guarantees”
repayment of invested capital – Profitable sale price,
provisions for full repayment if contract terminated, right
to lien, etc. Ability to assume contract from the
developer once construction is complete.
 Utilities need protection from new generation affecting
power quality, reliability, and cost to other customers.
That is a state requirement for all retail utilities and a
Federal requirement for all wholesale providers
(generators, transmission owners, etc.).
18
REI Challenges –
There is no cookbook yet
 States regulate retail power, and crossing state lines on
a REI may present issues. Federal agencies are bound
by State regulations per 40 USC 591
 Connection to the transmission grid highly regulated




Adding to the grid is a long process
The frequency response of the grid must be maintained
Smart Grid technologies not mature
Transmission lines between sites decrease security issues
 Different agencies have different authorities with respect
to entering into such agreements
 How to share/purchase RECs if necessary
 How to define “secure” energy
19
Particular Challenges of SEEI
• Regulated markets – profit fixed and controlled
• Who gets the projects? How much is needed for 25% in
2025?
• Economic downturn changes demand curves – looks like it
may be flat for the next 10 years.
• $/KWh in the SE already low – hard to compete with new
capital costs
• Natural gas prices remain low, discouraging renewables
20
Particular Challenges of SEEI
• Utility Companies Integrated Resource Plans vs. Installation
renewable requirements
• Master planning of utility infrastructure on installations being
lost in privatization
– Privatized firms may not report their plans/vulnerabilities
– Installations may not adequately share future plans with utility
companies
• Infrastructure not in place to “manage” new power sources
– Microgrid/Secure Grid
– Definitions of Critical Infrastructure
21
How do you
eat an
elephant?
22
23