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North Carolina Military Business Center Army Renewable Energy RFP Forum May 2, 2012
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NCMBC Army Renewable Energy Contract Forum 050212

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Page 1: NCMBC Army Renewable Energy Contract Forum 050212

North Carolina Military Business

Center

Army Renewable Energy RFP Forum

May 2, 2012

Page 2: NCMBC Army Renewable Energy Contract Forum 050212

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

Page 3: NCMBC Army Renewable Energy Contract Forum 050212

Welcome, Introductions and Purpose

Page 4: NCMBC Army Renewable Energy Contract Forum 050212

NCMBC

Introduction

Page 5: NCMBC Army Renewable Energy Contract Forum 050212

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”

Page 6: NCMBC Army Renewable Energy Contract Forum 050212

Mission & Goals

Mission

To leverage military and other federal business opportunities for economic development and quality of life in North Carolina

Goals

1 - Increase federal business for NC companies

2 - Integrate military/families into workforce

3 - Support defense-related recruitment

Page 7: NCMBC Army Renewable Energy Contract Forum 050212

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

Page 8: NCMBC Army Renewable Energy Contract Forum 050212

DoD Procurement & NCMBC Business Developers

Cherokee Clay

Graham

Alamance Alexander

Alleghany

Anson

Ashe

Avery

Beaufort

Bertie

Bladen

Brunswick

Buncombe

Burke

Cabarrus

Caldwell

Caswell

Catawba Chatham

Cleveland

Columbus

Dare Davidson

Davie

Duplin

Edgecombe

Forsyth Franklin

Gaston

Gates

Granville

Greene

Halifax

Harnett

Haywood

Henderson

Hertford

Hoke

Hyde

Iredell

Jackson

Jones

Lee Lincoln

McDowell

Madison Martin

Mitchell

Montgomery

Nash

New

Northampton

Orange

Pamlico

Pender

Person

Pitt

Polk

Randolph

Richmond

Robeson

Rockingham

Rowan

Rutherford

Sampson

Scotland

Stanly

Stokes Surry

Swain

Tyrrell

Union

Vance

Wake

Warren

Washington

Watauga Wilkes

Wilson

Yadkin

Yancey

Pasquotank

Chowan

Greater than $50 million

$20 million to $50 million

$10 million to $19 million

Less than $10 million

Transylvania Macon

Moore Mecklenburg

Guilford

Cumberland

Johnston

Wayne

Onslow Carteret

Craven

New Hanover

Durham

Lenoir

NCMBC – Serving Statewide!

DoD Data FY2009

Page 9: NCMBC Army Renewable Energy Contract Forum 050212
Page 10: NCMBC Army Renewable Energy Contract Forum 050212

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)

Page 11: NCMBC Army Renewable Energy Contract Forum 050212

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)

Page 12: NCMBC Army Renewable Energy Contract Forum 050212

Emerging Patterns in DoD Energy Acquisition

Page 13: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

16

Perfect Storm

Energy Initiatives Task Force UNCLASSIFIED

Page 14: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

17

Army Energy in Perspective – 2010

24%

76%

42%

58%

Facilities

Vehicles & Equipment

(Tactical & Non-tactical)

Sources: Energy Information Agency, 2010 Monthly Energy Review; Agency Annual Energy Management Data Reports submitted to DOE's Federal Energy

Management Program (Preliminary FY2010)

35%

65%

DoD

80%

Army

23%

Federal

Gov 1%

Federal Government United States Department of Defense

U.S. = 98,079 Trillion Btu DoD = 819 Trillion Btu Fed Gov = 1,096 Trillion Btu(FY09) U.S. Army = 189 Trillion Btu

FY10 Highlights - $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

Energy Initiatives Task Force UNCLASSIFIED

Page 15: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Army Energy Program

18

• 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

Energy Initiatives Task Force UNCLASSIFIED

Page 16: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Soldier Basing Vehicles

Installation

Land

Air

Tactical Non Tactical Contingency

OPERATIONAL ENERGY

NET ZERO STRATEGY

19

Army Power & Energy

“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 capabilities Power 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

Energy Initiatives Task Force UNCLASSIFIED

Page 17: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

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

20

Basing – Net Zero Installations

UNCLASSIFIED Energy Initiatives Task Force

Page 18: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

21

Net Zero ‘Scorecard’

Patterned after the federal

OMB Sustainability & Energy

Scorecard

Net Zero Trends

Pilot Installations’ trends by fiscal year,

using their Scorecard data

Tracking Net Zero Progress

Success Stories

For more info on Installation successes:

• https://eko.usace.army.mil/public/fa/netzero/

• http://army-energy.hqda.pentagon.mil/netzero/

Energy Initiatives Task Force UNCLASSIFIED

Page 19: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

22

Basing – Net Zero Installations

Energy Initiatives Task Force UNCLASSIFIED

Page 20: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Innovation

23

The world will not evolve

past its current state of

crisis by using the same

thinking that created the

situation. - ALBERT EINSTEIN

Energy Initiatives Task Force UNCLASSIFIED

Page 21: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Army Renewable Energy NOT New

24 Energy Initiatives Task Force UNCLASSIFIED

Fort Carson, CO

2 MW PV

Page 22: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Army Approach to Achieve Renewable Energy Goals

Energy Initiatives Task Force UNCLASSIFIED 25

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Ene

rgy

Co

nsu

mp

tio

n (

MW

h)

Path to 25% Renewable Energy by 2025 - Notional

Renewable Energy

Traditional Energy

7.5% (EPAct 2005)

25% (NDAA 2010/ EO 13514)

Energy Efficiency Gains funded by

appropriated funding, ESPC, UESC

Requires leverage of private sector

funding, EUL, PPA

Page 23: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Where the Army Needs to Go

Energy Initiatives Task Force UNCLASSIFIED 26

Major Issues Declining Budgets

Specialized Expertise Enterprise Strategy

Page 24: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

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

27

Energy Initiatives Task Force

Energy Initiatives Task Force UNCLASSIFIED

Page 25: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

• 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

Benefits of Centralized Approach

Energy Initiatives Task Force UNCLASSIFIED 28

Outcome: Reliable program for Army and industry

Page 26: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Energy Initiatives Task Force UNCLASSIFIED 29

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.

Page 27: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Director - Richard Kidd

Executive Director - John Lushetsky (DOE)

Kathy Ahsing, Director

Clyde Reynolds

Jeff Smith

MAJ (P) Kevin Lovell

U.S. Army Corps of Engineers Defense Logistics Agency Department of Energy

Alan King, Director

Douglas Waters

Erich Kurre

Paula Skipper

Jon Powers, Director

Heidi Hansen, OGC Dedicated Attorney

30

EITF Organization

NREL and other DOE Labs

Energy Initiatives Task Force UNCLASSIFIED

Office of the Director

Planning Division Execution Division Outreach Division

Page 28: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

31

Roads to Project Completion

Acquisition Strategies: Various approaches to acquiring energy

Development strategy: Planning and execution of project opportunities

Large-scale

renewable

energy projects

Page 29: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

The EITF will leverage existing authorities to meet

sustainability 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)

Energy Initiatives Task Force UNCLASSIFIED 32

Army’s Enabling Authorities

Page 30: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

• 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).

Acquisition Approach

Energy Initiatives Task Force UNCLASSIFIED 33

Page 31: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

• 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.

Acquisition Approach (cont’d)

Energy Initiatives Task Force UNCLASSIFIED 34

Page 32: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

• 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.

Energy Security vs. Affordability

Energy Initiatives Task Force UNCLASSIFIED 35

Page 33: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

• 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.

Environmental Assessments

Energy Initiatives Task Force UNCLASSIFIED 36

Page 34: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Phase 0

Project Solicitation

Project Validation

Project Negotiations & Closing

Opportunity Identification & Due Diligence

Post-Closing Management

Phase 1 Phase 2 Phase 3 Phase 4

Renewable Energy Project Development Guide

Project Development Process

The EITF is producing a process for developing large-scale

renewable energy projects that is clear, consistent and

transparent. This process will be described in a Project

Development Guide that will detail the five phases of project

development.

Energy Initiatives Task Force UNCLASSIFIED 37

Page 35: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Potential

Renewable

Energy

Opportunities

Stage 1

Structured Process for Identifying Opportunities

Site

Assessment

Stage 2 Stage 3

Stakeholder

Buy-in

Stage 4

Project

Charter

Stage 1 validation with

installation SMEs

Site visit/walkthrough:

siting determination

Preliminary stakeholder

meetings (including

utility)

State regulatory, policy, market, and

renewable resources

Installation land availability, GIS, and

master plan review

Mission & environmental impacts

Financial viability across alternative

financing contracts

Project development risk factors

Stage 1

Project concept vetted

Project deconfliction

(mission compatibility,

NEPA scoping)

Stakeholder analysis

and mitigation plans

Stage 3

Project charter

signing

Army stakeholder

approval

Execution Team

formulation

Stage 4

Increased due diligence and decreased risk early-on, through incremental analysis and

buy-in – resulting in a viable, defined and well-supported project

Energy Initiatives Task Force UNCLASSIFIED 38

Stage 2

Initial

Opportunity

Screening

Page 36: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Current Opportunity Assessments

Energy Initiatives Task Force UNCLASSIFIED 39

Page 37: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

Questions and Answers

Energy Initiatives Task Force UNCLASSIFIED 40

Learn More at www.armyeitf.com

Page 38: NCMBC Army Renewable Energy Contract Forum 050212

Assistant Secretary of the Army (Installations, Energy & Environment)

AMERICA’S ARMY: THE STRENGTH OF THE NATION

ARMY STRONG

41

Page 39: NCMBC Army Renewable Energy Contract Forum 050212

Review of the Draft RFP

Page 40: NCMBC Army Renewable Energy Contract Forum 050212

Review of the Draft RFP

• Objective

• Deliverables

• Contract logistics

• Upcoming milestones

Page 41: NCMBC Army Renewable Energy Contract Forum 050212

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

Page 42: NCMBC Army Renewable Energy Contract Forum 050212

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 “

Page 43: NCMBC Army Renewable Energy Contract Forum 050212

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

Page 44: NCMBC Army Renewable Energy Contract Forum 050212

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

Page 45: NCMBC Army Renewable Energy Contract Forum 050212

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

Page 46: NCMBC Army Renewable Energy Contract Forum 050212

Teaming for Government

Contracts

Page 47: NCMBC Army Renewable Energy Contract Forum 050212

www.smithlaw.com

©2012 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Traps and Tips:

Subcontracts and Joint Ventures

Presented By:

Smith, Anderson, Blount, Dorsett,

Mitchell & Jernigan, LLP

www.smithlaw.com

[email protected]

(919) 821-6755

[email protected]

(919) 821-6688

Page 48: NCMBC Army Renewable Energy Contract Forum 050212

www.smithlaw.com

©2011 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Joint Venture v. Prime/Subcontract

• JV: “[C]ompanies form a partnership or joint venture to act as a

potential prime contractor” FAR 9.601(1).

– “Partnership”

• Prime contractor contracts with government. FAR 9.601(2).

– Prime subcontracts with other team member

– No “privity” between the government and subcontractor

51

Page 49: NCMBC Army Renewable Energy Contract Forum 050212

www.smithlaw.com

©2011 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Pros & Cons

• Pros

– JV member has increased stature (vs. subcontract)

– Shared control

• Cons

– Joint responsibility for performance (vs. subcontract)

– Lead/Larger team member gives up some control to other

team member

– Termination/unwinding JV more complicated

52

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www.smithlaw.com

©2011 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Drafting tips and techniques

• Have a written teaming agreement (RFP)

• Identify the contract you are bidding on

• Require the prospective team member to be awarded

subcontract instead

• Have subcontract terms well-negotiated before submitting bid

– Divide team member functions

• Who will prepare proposal? Who will pay for it?

53

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www.smithlaw.com

©2011 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Drafting tips and techniques

• Non-poaching, non-compete, non-solicit?

• Exclusivity?

• Confidentiality?

• Consider favorable choice of law provisions?

– Forum Selection? Arbitration/mediation?

• If there is termination, who owns the confidential data or the

intellectual property?

• If there is a dispute, will one party indemnify another?

54

Page 52: NCMBC Army Renewable Energy Contract Forum 050212

www.smithlaw.com

©2011 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Drafting tips and techniques

• Preference contract?

– Identify the preference, state the percentages

• SBA approval required?

– Make contract subject to SBA approval

• Termination:

– If one side decides not to pursue the contract

– Government disapproval of sub

– Government non-award or cancellation of RFP

– Suspension/debarment/proposed debarment

• Impossibility; mutual agreement; default

55

Page 53: NCMBC Army Renewable Energy Contract Forum 050212

www.smithlaw.com

©2012 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

Questions?

Smith, Anderson, Blount, Dorsett,

Mitchell & Jernigan, LLP

www.smithlaw.com

[email protected]

(919) 821-6755

[email protected]

(919) 821-6688

Page 54: NCMBC Army Renewable Energy Contract Forum 050212

Background Information for Responding

to the Future RFP

Page 55: NCMBC Army Renewable Energy Contract Forum 050212

Best Value Procurements

Continue to procure MATOCs and SATOCs

Increased use of Standalone Acquisitions

Increased use of Regional/Local Contracts

Acquisition Trends

Page 56: NCMBC Army Renewable Energy Contract Forum 050212

The New Reality for Defense Primes

Shorter timelines. Strict contract terms. Greater value.

LEED construction Mandates.

The Department of Defense (DoD) is overhauling the way it

acquires products and services, and it’s changing the rules

that dictate how defense primes conduct business. There is

a huge paradigm shift taking place in all Federal

Construction.

Defense Primes are now moving to a strategic partnering

paradigm. Instead of managing dozens if not hundreds of

vendors for a project, focus on the several who can deliver

true business value. This provides Primes with flexibility

and lowers fixed costs.

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Where’s the Box Top to the Puzzle?

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Large Scale Wind Energy Generation

1. Sustainable Technology: •Technologies desired are those that have the smallest environmental impact. •Describe any potential impacts of your technology that could be limiting for

environmental or safety reasons. For example, issues associated with flying

wildlife, noise production, radio frequency or other electronic noise generation,

acoustic noise, etc. •Describe your technical approach to utilize large scale wind to generate a rated

power of <50 MW. Please state general design criteria including size and height

of the turbines, foundation requirements, etc. Note that the supporting facilities,

such as roads and electrical transmission, are limited or non-existent in many

areas of the installation where wind production could be implemented. •Would inclusion of 30 miles of transmission lines and temporary road

development, as part of the project, eliminate the economic viability of a wind

farm <50MW? •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 developer to fund and coordinate any additional

site-specific NEPA actions for the proposed facility that may be required.

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2. Excess Electrical Production •Describe the approach for regulatory issues and other agreements that need to

be addressed for the developer to be able to sell excess power production. •Is there an economically feasible and reasonable cost of electricity under a

Power Purchase Agreement (PPA), or similar instrument, for a project that does

not sell excess electricity? •Describe the approach for the regulatory issues regarding power generation on

federal land in that state and transmission of power for consumption on

contiguous federal land in the state and vice versa.

3. Financing •The Army intends on pursuing project financing methods where the Army

provides the land and access as well as a consumer of the electricity, but allow

the 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+ year

timeframe. •Is the PPA contractual vehicle to secure private capital to build electrical

generation on federal land with a guarantee of electrical power purchase by the

federal government a viable option in the regulatory environment of this area?

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•What opportunities exist for the use of Extended Use Leases, Energy

Savings Performance Contracts, Utility Energy Savings Contracts, or

other potential authorities that allow public-private partnerships to

obtain private capital to develop technology on Army land that is paid

off over the long term via energy savings or direct purchase of the

commodity?

•If DOD decides to pursue acquisition of these technologies,

competitive future proposals would have the cost of electrical power

to 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 to

retain all Renewable Energy Credit (REC) certificates. If this is not

viable, what is the best cost of power that can be expected for the

technology?

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Solar Technology: •Describe the technology you would recommend. Do you consider this a

commercial technology? If not what barriers have to be overcome to achieve

commercial 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 for

environmental or safety reasons. For example, issues associated with panel

reflectance and air traffic, concentrating solar energy, noise production from

the operation of Stirling cycle generators, radio frequency or other electronic

noise generation, etc. •For energy generation (assuming sufficient, available, and NEPA vetted land

and appropriate distribution tie in were available), describe the technical

approach of the project to provide electricity for the training areas noted in

Table 1. Assume standard grading and land preparation and 1.5 kilometer

distance to the grid tie in. •What is the minimum size CSP trough plant (in MW) that would be

considered economically viable to develop and finance? •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 developer to fund and coordinate any

additional site-specific NEPA actions for the proposed facility that may be

required.

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Given Conditions for Geothermal Development

•Geothermal resource is accessed on Bureau of Land Management withdrawn lands for

the US Army

•Water temperatures between 170 degrees to 190 degrees Fahrenheit

•Assume sufficient flow, water table level and heat recovery (please specify what you

would 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 to produce near base load electrical power from this geothermal source?

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. Sustainable Technology: Mid to Large Scale Energy Storage

•Technologies desired are those that have the smallest environmental impact, including water

usage. •Describe any potential impacts of your technology that could be limiting for environmental or

safety reasons. For example, issues associated with hazardous chemicals and other materials,

potential for catastrophic failure of high energy density systems, radio frequency or other

electronic noise generation, ambient acoustic noise, water use, mechanical hazards, etc. •Describe the carbon dioxide (equivalent) output of greenhouse gases from your technology

approach. •Describe the technical approach to achieve 0.5 to 10MWh increments that could be utilized to

provide energy storage at distribution voltage (13.8kV) that comes from the utility grid and/or

intermittent 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 developer

to fund and coordinate any additional site-specific NEPA actions for the proposed facility that

may be required.

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2. Technology Maturity

•With respect to the Department of Defense (DoD) Technology Readiness

Level (TRL) scale, what is the maturity of your energy storage technology?

•What is the footprint of your system (include all system components) in terms

of acres/MWh or ft2/MWh, as appropriate?

•What is the control method / processes that you use to charge and discharge

your 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/recharge

cycles? This may be described in the lifetime and replacement frequency for

specific system components, if needed.

•What is the viability of your technology as applied to distributed (building

scale 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 and

maximum rate)?

•What is the commercial history of your technology?

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3. Financing / Economic Feasibility

•What is the Rough Order of Magnitude (ROM) cost range per

megawatt-hour associated with your energy storage technology?

Large scale photovoltaic systems have demonstrated $3M-$4M/MW

installed costs. What would be the impact of adding 50% energy

storage to a large scale photovoltaic plant (assume 20MW total peak

production)?

•Given the willingness of the Army to consider public-private ventures

to finance energy projects, what ideas do you have with regard to

private financing of energy storage projects through contracting

instruments such as Energy Savings Performance Contracts (ESPC),

Power Purchase Agreements (PPA), Enhanced Use Leases (EUL),

etc.?

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Discussion, Questions and Networking

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Contact Information

• Scott Dorney, Executive Director, 910-678-0190, [email protected]

• Bill Greuling, Program Manager, Business Development, 910-578-2626, [email protected]

• Anne Campbell, Business Development, Energy, 910-938-6785, [email protected]

• Carolyn Bunting, Program Manager, Technology, 910-578-2579, [email protected]

• Mickey Finn, Program Manager, Strategic Initiatives, 910-390-4011, [email protected]