The Army and Air Force are confident they can each meet a White House target to produce a gigawatt of renewable energy on their installations by 2025. But it’s going to depend on industry’s ability to make good business deals to construct those projects.
Katherine Hammack and Terry Yonkers, the assistant secretaries in charge of energy and installations for the Army and Air Force, respectively, are touring military bases together all over the country as they push toward the one gigawatt goal on their respective installations. “And certainly one of the reasons for that is to look at combined opportunities,” Yonkers told reporters on a recent conference call. “When you look at the way we put our energy strategies together, there’s really not a whole lot of daylight between us in terms of the way we approach these problems, whether it’s an Army installation, a Navy installation or an Air Force installation.”
In some cases, they’re joint bases that host both services, like Lewis-McChord in Washington state or Joint Base San Antonio, where Hammack and Yonkers spoke to reporters on a conference call about their efforts to find the best approaches to renewable electricity on bases. Yonkers said neither service is taking a one-size-fits-every-base approach. Different geographical locations have different renewable energy potential, and also come with varying real estate situations that determine what kind and how much of a particular renewable technology can be installed.
“But a lot of this really is going to depend on the private sector,” Yonkers said. “We’re really looking for them to bring us the business deal that’s going to make it work. Some of the tax incentives that are in place right now makes [renewable energy] cost-competitive with conventional energy. If that scenario changes, we might be looking at a different situation. But right now, a lot of companies are finding ways to do this economically and in a competitive way with conventionally-derived fossil fuel energy.”
Tax credits to expire
That scenario might indeed change if Congress doesn’t take action by the end of the year. A key tax credit for wind energy is set to expire in December. Incentives like that and similar state programs have been one of the main factors that have enticed private companies to build renewable energy projects on military bases, according to officials.
But there are other pitches they’re making to industry. For example, operators of renewable plants on military bases don’t need to worry about providing their own security, Yonkers said.
And Hammack said the power purchase agreements the Army has signed so far create a guaranteed, long-term market for renewable power companies.
Combining purchasing power
“The kind of agreements we’ll be signing could be as long as 30 years,” she said. “That is something the financial community is looking for. It’s like an anchor tenant in a shopping mall. If the Army can be an anchor tenant in a power purchase agreement, it certainly helps finance and fund a project that might be looking to sell power back onto the grid.” The Army recently issued a draft request for proposals that envisions buying $7 billion worth of renewable electricity over a period of up to 30 years. Hammack said the service has received a huge amount of feedback already, and officials from the Army Corps of Engineers will update industry on the RFP at a joint Army-Air Force energy industry day the two services will host together in Washington next month.
Yonkers said DoD is looking for other ways to collaborate on energy, like managing smaller renewable energy projects on a regional basis across the military services, or teaming up to use DoD’s purchasing power to make better buys from traditional utility providers.
“The services have typically gone at this on their own, base by base,” he said. “But in some locations, like in Georgia, the Army and the Air Force have teamed up and gone to Georgia Power and said, ‘we’re a huge buyer, we’re a long-term customer. What kind of deal can you make for us?’ And what we’ve seen is a couple cent reduction per kilowatt hour in what we pay for electricity. We’re looking at these things, and I think there’s more goodness and more that we could be doing collectively.”