DOD Announces 20 Additional Renewable Energy Contracts

On February 21, the U.S. Army Corps of Engineers announced 20 new renewable energy contracts as part of the Department of Defense (DOD)’s goal of generating 25 percent of its energy needs from renewable energy sources by 2025, under the National Defense Authorization Act of 2007. In 2012, the White House announced that the DOD would deploy 3 gigawatts of renewable energy at military installations – enough to power 750,000 homes – by the 2025 deadline. Lessening dependence on imported petroleum makes sense for the U.S. military, not only from an environmental perspective but primarily from a strategic one: energy security is essential to mission security.

Since 2007, DOD has steadily been moving towards its ambitious target. In 2012, the U.S. Army earmarked $7 billion towards renewable contracts as part of its Army Net Zero project, which funds solar, wind, biomass and geothermal projects for up to 30 years, in order to bring installations to net zero energy, water and waste. The Army is employing power purchasing agreements (PPA), enabling them to tap into a popular third-party model of financing. Under PPAs, the customer (in this case the Army) signs a lease with a company that pays for the renewable energy installation. In exchange, the company secures a long-term contract to sell electricity at a specific rate, providing it with the certainty it needs to obtain private financing for the project. The Army does not need to disburse any upfront costs itself. Indeed, the $7 billion that the Army has allocated for renewable contracts will be drawn from the funds normally paid to electric utilities – thereby avoiding any additional cost to the taxpayer. With their financing secure, these projects are less politically charged than other models, such as the farm-to-fleet program. So far, 15 biomass contracts have been awarded under the package. This week, the U.S. Army Corps of Engineers and the Army Energy Initiatives Task Force announced 20 additional renewable energy contracts, bringing the total contracts awarded thus far to 79. Included in the most recent award are two biomass projects.

One of the newly awarded contracts is to ReEnergy’s Black River plant in New York, which will serve Fort Drum, home to the Army’s 10th Mountain Division. ReEnergy invested $34 million to convert the Black River plant to biomass (it previously burned coal), and it secured the largest contract awarded thus far under the Army’s Energy Initiatives Office Task Force. Using waste reclamation, the plant will be run on forest industry waste and construction waste. It is capable of generating about 422,000 MWh annually, and the Army will purchase up to 28 MW from the facility for up to 20 years. ReEnergy is also selling renewable energy credits (RECs) under New York’s Renewable Portfolio Standard, which mandates 30 percent renewable sources for New York State by 2015.

The Black River plant embodies the type of collaboration between state and federal government, the private sector, and researchers needed to make large-scale renewable projects feasible. According to Governor Andrew Cuomo, the plant "represents the future of energy in New York State." The plant will also create local jobs, with 33 people employed full-time at the plant, and an additional 144 working in logging crews to collect forest residues as well as providing additional work to local logging companies. Furthermore, Black River has also met the Sustainable Forestry Initiative’s 2010–14 standard, with ReEnergy being the first energy production company to receive the label. Projects like the Black River plant represent the enormous potential in local biomass projects – using regionally appropriate biomass that in turn stimulates local economies.