The Pew Charitable Trusts issued a report this month on the progress of the Department of Defense (DoD) in meeting its renewable energy goals – goals set over a period of years through various means, including legislation.1 The tone of the report is quite optimistic, and indicates Pew’s confidence that the DoD will achieve its objective of providing one gigawatt of energy from renewable sources for each branch of the military by 2025.2 Such an achievement would be a boon for pro-environmental and energy independence proponents, but it also has myriad other benefits for the military and the country as a whole: Both infrastructure security and the safety of military personnel are being improved through the use of renewable energy technology, and much of it is coming at zero up-front cost to the government.
The report references little-known project financing programs run by the Department of Energy that allow government agencies to obtain energy-saving capital improvements without expending appropriated funds.3 Not surprisingly, these programs are getting more attention because of both the constraint on appropriated funds, and the goal of consuming more energy created from renewable sources. These funding programs, which are specifically authorized by Congress, allow the agencies to install improvements to meet the goals without spending their own appropriated funds and without violating the prohibition on improper augmentation of funds. See, e.g., 42 U.S.C. § 8287.
There are a few different methods for obtaining the capital improvement – in the case of Energy Savings Performance Contracts (ESPCs), the contractor (or “ESCOs” as they are known in the program) provides the up-front costs of the project and then is paid with the resultant energy savings that the agency would have otherwise paid to the utility providers.
The DoD’s evolution to using “alternative” sources of energy comes at an intriguing time, as the country as a whole is becoming more aware (and more apprehensive) of the vulnerability of critical infrastructure components. Almost every month, the news seems to reveal a new breach of security of a well-known company. As many know, or should be aware, the government is in the process of devising a system to encourage banks, utility providers and other business sectors that are key to everyday life to protect their IT networks in order to mitigate against the possibility of a widespread shutdown of services.4 Although the focus of the cyber security initiative has largely been to promote heightened cyber security standards within private industry, the DoD’s use of renewable energy sources provides another example of an effective way to protect critical infrastructure. Such promotion and continued development in this area will only continue to grow in importance as the United States and other countries attempt to combat an increasingly difficult security environment.
Pew’s report discusses the DoD’s strategy of using advanced microgrids, smaller-scale versions of conventional power grids with sophisticated controls for managing and monitoring energy consumption. Such implementations of energy generation can isolate and insulate the sources of power. In addition to protecting the IT network that controls and monitors the power system, this ability to isolate the source of power generation increases the ability to defend the system exponentially. Not only that, but the system is no longer vulnerable to inadvertent compromise outside of the DoD’s portion of the overall power distribution network – a network that also links tens to hundreds of thousands of non-DoD users and spans miles of distance within the physical power distribution system. As noted in the Pew report, the DoD’s ability to protect its network and keep it running is critical to maintaining mission effectiveness. After all, according to the report, 99 percent of domestic military bases are dependent on a commercial power grid for energy needs (albeit a figure that Pew indicates will be decreasing in the near future).
The most important benefit of alternative sources of energy is the ability to reduce human loss. It is no secret that many of the military’s casualties are the result of moving supplies and equipment to where they are needed in the battle space. With an organization that uses large amounts of fuel, much of that movement is dedicated to getting fuel to remote and dangerous locations, resulting in numerous casualties.5 This has led to support from the highest ranks of the military for the use of technologies, such as solar-generated power, simply because it can be harvested right at the point where it is used – reducing military casualties resulting from, for example, the transportation of liquid fuel.
The DoD’s focus on renewable sources of energy is compelling in terms of how it may impact civilian culture in a society that has long relied on carbon-based fuels. It is also highly relevant within the government contracting community for the immense opportunity created for companies that can meet the DoD’s growing need. Accelerated renewable energy efforts by the military will continue to create such opportunities. According to the Pew report, “[t]he value of energy savings performance contracts across the armed forces has increased from $277 million in fiscal year 2010 to just over $411 million in FY2012, a 49 percent increase.”
As the DoD increases its demand for renewable energy, there are many unknowns that will emerge – such as how rights in data and computer software for microgrids will be managed. For example, will the military seek technical data to maintain its own solar power systems, or will it pay for maintenance from the company that provided it? This is just one of the many near-term considerations. There are also many exciting questions/possibilities for the future, including whether microgrids will ever advance to the point where cities, towns, or regional municipalities are no longer needed to distribute power. Time will tell whether the DoD’s commitment to renewable energy promotes future widespread adoption of renewable energy, and what impact the DoD’s commitment will have on those companies that contract with it to satisfy its renewable energy needs. This presents a significant opportunity for contractors that can assist the DoD in meeting its renewable energy goals.