IN DEPTH: Greening the US military
In April 2011, tornadoes effectively shut down the US Army’s Aviation and Missile Command centre in Alabama for more than a week.
Yet the twisters had not touched the Redstone Arsenal base — they had damaged the power grid dozens of miles away.
With blackouts growing in regularity — due to ageing, overloaded grids and increasingly frequent extreme weather events — the US military understands that its critical electricity supply is vulnerable.
The Department of Defense (DoD) envisages renewables — and technologies that can help leverage them, such as advanced microgrids and storage — playing a key part in its comprehensive strategy to increase security of power supply, and reduce energy costs and consumption.
And it is counting on the private sector to develop, build, operate, maintain and largely finance them under contracts of up to 30 years — but only if the long-term price is competitive with other energy sources.
As defense secretary Leon Panetta (who stepped down in February) said last year: “Developing renewable energy is the right thing to do for national security, as well as for the environment and our economy.”
The US military has been on a war footing for the past decade, and its thirst for energy has been insatiable. Its fuel and electricity bill for the 2011-12 financial year alone was $20bn — greater than the GDP of almost half the countries in the world — and $3bn higher than budgeted due to rising global oil prices. Roughly $16bn of this bill was for fuel consumed in operations — including the generation of electricity in the field. The remaining $4bn was mainly for power used by its global network of permanent military installations and facilities — comprising nearly 300,000 buildings.
“Every dollar we spend on energy is a dollar we can’t spend on something else,” says Kevin Geiss, deputy assistant secretary for energy at the Air Force. “In this context of tightening belts and shrinking budgets in the military, energy is front and centre.”
Yet Congress — under pressure to curb runaway federal deficits — is now requiring the DoD to cut its non-war-zone expenditure by 9%, or $46bn. And further reductions are possible in the coming years.
The Air Force, Army and Navy — which includes the Marine Corps — have each committed to procuring and producing 1GW of renewable energy at their permanent installations (and/or on 65,000sq km of military land opened up for development). The Air Force expects to meet this goal by 2016, the Navy by 2020 and the Army — which issued a $7bn request for project proposals last year — by 2025. In the Navy’s case, this 1GW is in addition to the 300MW it already has in operation. The 1.3GW total will hit its target of supplying 50% of its electricity consumption from renewables.
But the projects’ complexity — involving resource validation, third-party financing, dealings with the private sector and utilities, and other issues — goes beyond what busy Army personnel can dedicate time to. “History has shown that most [military] installations cannot execute projects of that size on their own,” he explains.
It will be up to private investors to make the economics work. “The first premise is that we won’t enter into renewable-energy projects if the cost is not equal to or less than whatever we are paying for utilities,” says Joseph Sikes, who oversees facilities’ energy and privatisation in the office of the deputy undersecretary of defense for installations and environment. This is much easier in Arizona, California, New Mexico and other Western states with abundant solar resources and strong local incentives and mandates.
In some cases, the military will buy renewable energy directly from utilities, yet some of these providers are filling their state mandates ahead of time. “That’s becoming a little bit of a drag on figuring out where we can do this,” Sikes says. However, utilities in California — where the military is proposing many projects — need to contract much more power to meet their targets.
The DoD is not interested in helping finance large projects or providing loan guarantees to take risk off the table. “We’re trying to get the private sector to do deals, not us,” Sikes adds.
As he points out, private investors can depreciate assets for tax purposes, but the armed forces, as part of the federal government, cannot. “It’s one of the reasons we don’t do the bigger projects ourselves.”
The DoD is legally required by Congress to increase its use of renewable energy. The White House closely monitors the department’s progress, and civilian and military leaders at the Pentagon are fully aware of the importance President Barack Obama gives this issue.
The first of two congressional mandates requires the DoD to supply 25% of its permanent facilities’ energy (including heat) from renewables by 2025, with an interim goal of 15% by 2018.
“We think we’ll be pretty close to that number,” says Sikes. In the 2010-11 financial year, it achieved 8.5%, down from 9.6% a year earlier.
The second mandate sets a target for 7.5% of the DoD’s total power usage to come from renewables by the end of the financial year (on September 30). Last year, its target was 5%. “We were only [at] about 3.1% in 2012,” says Sikes, which was down from about 4% a year earlier. This was largely due to increased electricity usage and fewer purchases of renewable-energy credits (RECs). The Air Force, with 6%, is the only service close to meeting this year’s target.
The DoD wants to end any reliance on unbundled RECs (those not tied to a renewable-energy project), as they do not help provide energy security for bases.
For bundled RECs (those tied to specific projects), it seeks an acceptable trade-off between retaining some to meet its mandate and allowing developers to hold them, so they can improve their project returns. RECs do not apply to the 25% target.
The military also needs to consider the length of lead times for particular projects, as well as local grid constraints.
Offshore wind is a potentially large resource that the services are keen to explore. Sikes says the DoD is having “significant discussions” with the office of Governor Martin O’Malley, who wants it to buy power from a proposed 200MW project off Maryland’s coast that could be operational in 2017.
Sikes describes it as a chicken-and-egg situation where individual bases would be expected to sign up without knowing what the price is going to be.
“Right now that is what the discussion going on is about,” he says. At present, it is too expensive compared to existing rates, although much will depend on the level of public incentives.
Another project generating interest at the DoD is the Atlantic Wind Connection, a Google-backed offshore transmission project that would directly link multiple wind farms together and export their energy to various east-coast locations.
“What’s cool about that is that it provides some protection against a big storm hitting your area and taking out transmission lines. You can move power from New Jersey to Virginia, and have a source of power that is probably more reliable,” says Sikes.
The DoD is also developing advanced microgrids that would provide bases with reliable power independent of local grids vulnerable to a potential military or cyber attack. “Many Army installations are at the end of feeder lines that are not particularly well-maintained in rural areas,” explains Lushetsky.
The microgrids, such as the one to be implemented at Fort Carson in Colorado, would link multiple renewable-energy sources to an energy-storage system and electric vehicles, and would also offer improved energy efficiency and advanced metering. Such networks would be more reliable and cost-effective than back-up diesel generators tied to single buildings that require onsite fuel stores.
“When I look at energy, I’m looking to be robust, resilient and ready,” explains Geiss. “And [to have] the ability to recover when there is degradation in that [local grid] supply.”
The US military’s renewables goals may be ambitious, but Pentagon officials insist they will be met. There appears to be little choice. Energy security is critical to each service’s national-defence mission and global competition for fossil fuels will only intensify in the future.