November 30, Welcome to the Army Installation Energy Resilience Update We will begin momentarily 1

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1 November 30, 2018 Welcome to the Army Installation Energy Resilience Update We will begin momentarily 1

2 Army Installation Energy Resilience Update 30 November 2018

3 Check out the boxes on the right hand side for more webinar information: Audio Information for Today s Webinar Army Energy Links Webinar Presentation for Download 3

4 Webinar Presenters Acting DASA (E&S) Mr. J.E. Jack Surash, P.E. OEI Executive Director Mr. Michael McGhee, P.E. Special Assistant to the ASA IE&E Dr. Bret Strogen, P.E. Chief, Energy and Utilities Branch Energy & Facilities Policy Division Operations Directorate, ACSIM Mr. Thomas B. Delaney, Jr., P.E. Army Energy Resilience Update Office of Energy Initiatives Update Energy Savings Performance Contracts & Utilities Energy Service Contracts Update Installation Energy & Water Plans and Utilities Privatization Update 4

5 Army Energy Resilience Update Mr. J.E. Jack Surash, P.E. Acting Deputy Assistant Secretary of the Army for Energy and Sustainability

6 Army Energy and Water Universe Energy and water security/resilience ensure available, reliable, and quality power and water to continuously sustain critical missions Army Universe Installation Population: 3,002,873 Total Army Installations: 156 National Guard & Reserve Centers: >2,800 Total Land (acres): 13,591,251 Buildings (ft 2 ): 982,668, % Energy Use Intensity since FY15 vs 5% FY17 Goal 32% Water Use Intensity since FY07 vs 20% FY17 Goal Army Directive , Installation Energy & Water Security Policy (February 23, 2017) FY 2017 ARMY Energy & Water Cost / Consumption $1.1B Energy 71.8T BTUs/year. $86.9M Potable Water 31.2B GALs/year Office of Energy Initiatives (OEI) 11 Awarded Energy Projects 325 MW Onsite Generation Capacity 76% Islandable Projects (onsite generation, storage & controls) Utilities Privatization: 152 Privatized Systems Water 35 Wastewater 34 Electric 45 Gas 36 Heat/Power 2 Combined Heat & Power (CHP) Strategy 14 Projects / MW Sustainable Buildings: LEED Silver (FY05-17) 919 Buildings Demand Response: 16 Installations Participating Enterprise Metering System > 21,000 Electric, Gas & Water Meters Facility Related Control Systems Energy / Resource Energy Managers: 179 FY 2017 Energy Sources: Electricity: 45.2% Natural Gas: 34.6% Fuel Oil 4.4% Other 15.8% Installation Energy & Water Plans: In Progress Energy Resilience & Conservation Investment Program (ERCIP): FY 2019: 6 Projects / $31.2 M Energy Savings Performance Contracts (ESPCs)/ Utility Energy Service Contracts (UESCs) $2.8 B Total Third-Party Investment 637 Total Task-Orders and Mods FY 2017: $289.3M Investment Energy and Water Resilience and Security Enables Army Readiness November

7 Energy and Water Resilience It is now undeniable that the homeland is no longer a sanctuary. attacks against our critical defense, government, and economic infrastructure must be anticipated National Defense Strategy 2018 The Secretary of Defense shall ensure the readiness of the armed forces for their military missions by pursuing energy security and energy resilience 10 USC 2911 (2018 NDAA) PHYSICAL NATURAL CYBER Addressing Vulnerabilities: Pivot from focus on efficiency and compliance to ENERGY AND WATER RESILIENCE SecArmy Directive (Installation Energy and Water Security Policy) - CRITICAL MISSION SUSTAINMENT (CMS): Critical mission continuity of operations for a minimum of 14 days - ASSURED ACCESS (AA): Dependable supply of energy and water needed to meet evolving mission requirements during normal and emergency response operations - INFRASTRUCTURE CONDITION (IC): Infrastructure capable of on-site storage and flexible and redundant distribution networks to reliably meet mission requirements - SYSTEM OPERATION (SO): Trained personnel conduct required energy and water security system planning, operations and sustainment activities 7

8 Imagine. Army installations A whole flock of pink flamingos? The year is 2030: Army has invested in training and equipment but took risk in installation infrastructure Authorized mobilization and deployment to counter the invasion in allied nation Cyber attack disrupted power supplies, including communications Systems below the threshold of critical, disrupted Key external utility, water, and energy control systems under attack Black Swans = unknown, unknowns Pink Flamingos = known, knowns The Army is unable to deploy 8

9 Efficiency and Conservation BUILDING SQFT AVAILABLE RESOURCE BUILDING LOAD BUILDING LOAD AVAILABLE LAND DEMAND RESPONSE Driver Assessment Footprints Risk Considerations Solutions Project Prioritization Federal Mandates Square-footage and load N/A Building load management strategies and onsite generation Cost effectiveness 9

10 Security and Resilience BUILDING SQFT AVAILABLE RESOURCE BUILDING LOAD BUILDING LOAD AVAILABLE LAND EFFICIENCY OPPORTUNITIES DEMAND RESPONSE Driver Assessment Footprints Risk Considerations Solutions Project Prioritization Critical mission requirements Uninterruptable and critical footprints, interdependencies, and emergency response Threat/hazards with associated impact Load management PLUS O&M, infrastructure, and onsite generation and storage Meeting mission need, reducing risk, cost effective alternatives analysis 10

11 Closing Gaps Low Cost/ No Cost Management Installation Planning Best Management Practices Energy Resilience Exercises Appropriated Project Funding Military Construction (MILCON) Energy Resilience and Conservation Investment Program (ERCIP) Operations and Maintenance (O&M) Third Party Financing Energy Savings Performance Contracts (ESPCs) Utility Energy Service Contracts (UESCs) Utilities Privatization (UP) Private Financing Power Purchase Agreements Enhanced Use Leases Fort Campbell, KY: MILCON Conceptual drawing a microgrid included in the FY2018 NDAA Anniston Army Depot, AL: UESC Replacement and Modernization of Depot-wide central heating and process high pressure steam plants, HVAC equipment and controls, interior and exterior lighting, compressed air equipment and distributions, and potable water fixtures. Schofield Barracks, HI: Lease Project: 50 MW / 30 day contingency microgrid where Hawaiian Electric constructed, owns, operates and maintains a 50 MW biofuel/multi-fuel power generation plant, fuel storage tanks, and controls. 11

12 Office of Energy Initiatives Update Mr. Michael McGhee. P.E. Executive Director Army Office of Energy Initiatives 30 November 2018

13 The Office of Energy Initiatives The Army Office of Energy Initiatives (OEI) was established by the Secretary of the Army with the mission to develop projects that enhance energy security and resilience on or near Army installations using existing DoD land use and private financing authorities. OEI serves as the Army s central program management office for the development, implementation and oversight of privately financed, energy resilience projects. OEI is focused on creating an Islandable capability energy security projects that include onsite generation, storage, and controls which contributes to the Army s Directive to provide power to critical missions for a minimum of 14 days in the event of an electrical grid outage. Schofield Barracks, Hawaii: 50 MW multi-fuel power plant; 100% Islandable capability for 30 days; Operational May 2018 Redstone Arsenal, Alabama: 1 MW / 2 MW-hour battery energy storage system, coupled with a 10 MW solar array; Operational December 2017 Fort Sill, Oklahoma: 36 MW natural gas and 14 MW solar array; 100% Islandable capability for 14+ days; In Development 13

14 Army OEI Current Energy Projects Portfolio November

15 Energy Security Project, Operational: Schofield Barracks, HI Project: 50 MW / 30 Day Contingency Microgrid Hawaiian Electric constructed, owns, operates and maintains a 50 MW multi-fuel power generation plant, fuel storage tanks, and controls, on Schofield Barracks Construction Army Benefit Plant can provide 50 MW of first call and black start capability to three Army installations simultaneously; 5 days of fuel storage onsite, 30 days of fuel storage on island. Utility Benefit Hawaiian Electric gained a critical generation facility above the tsunami strike zone, which powers the Oahu grid during normal operations. Operational May 2018 Community Benefit As the only baseload power generation facility on Oahu located above the tsunami inundation zone, this project enhances grid resilience and could provide power to part of the surrounding community in the event of a grid outage. Status Operational since May

16 Energy Security Project, Concept: Fort Sill, OK Project Concept: 36 MW / 14 Day Minimum Contingency Microgrid Public Service Corporation of Oklahoma would construct, own, operate and maintain a 36 MW natural gas fueled gridfacing power plant and up to a 14 MW solar PV array with controls. Army Benefit The project would enhance energy resilience by locating on-demand generating assets on Fort Sill that are capable of supplying reliable power to mission critical facilities during a commercial grid disruption. Utility Benefit Utility gains a distributed asset enhancing grid reliability in normal operations that aligns with their Integrated Resource Plan. Power from the project would flow directly to the commercial grid. Community Benefit The project provides additional operational flexibility that improves electrical service reliability to the surrounding Lawton community. Status Project in pre-negotiation stage. NEPA is underway; in 1 st public comment period and consultation phase. 16

17 Energy Security Project, Concept: Joint Forces Training Base Los Alamitos (JFTB-LA), CA Current Status: Project Solicitation 16 MAY 18 Industry Day 30 MAY 18 RFP Closed 20 AUG 18 Conditional Selection Notice NOV 18 Lease Award Target WINTER 19 Project Concept: 3 MW / 14 Day Minimum Contingency Microgrid Developer would construct, own, operate and maintain the energy resilience capabilities project, which includes power generation assets, energy storage, and microgrid components to island JFTB-LA in the event of a grid disruption. Army Benefit Project will enhance energy security by providing islandable capability to power the base s critical missions for a minimum of 14 days during a grid outage. Developer Benefit During normal operations, the developer would benefit from selling power or services from the project to off-base customers via the electrical grid. Community Benefit The project may enhance grid reliability by alleviating transmission line congestion or provide other electrical grid quality-enhancing services. Status Conditional Selection Notice accepted by developer November

18 Energy Savings Performance Contracts & Utilities Energy Service Contracts Update Dr. Bret Strogen, P.E. Special Assistant to the Assistant Secretary of the Army for Installations, Energy & Environment

19 Program Summary 637 task orders/mods at 96 installations >13.9 Trillion BTU saved per year $2.9B in private sector investments >$300M more in development Energy Savings Performance Contracts (ESPC) Utilities Energy Service Contracts (UESC) Servicing utilities and private companies provide initial private capital investment to execute projects that recapitalize energy and water systems and infrastructure Army executes project at no up-front capital costs; payments offset via commodity savings Army budget funds amortized repayments based on validated savings Third-Party Investments ($M) ESPC UESC Projected As of July 2018 Ft Knox ESPC Controls to cycle off geothermal well pumps during unoccupied hours Rock Island ESPC Surface finishing process improvements Kwajalein ESPC PV array for Meck Island 19

20 Kwajalein ESPC Energy Savings Performance Contract (ESPC) for USAG Kwajalein Atoll Task Order for KWAJ ESPC phase 1 awarded in SEP 17, provides $40M of private capital investment 2.4MW Solar PV array, 2 MW / 3 MWh Lithium-ion Energy Storage System (ESS), Microgrid control system on Meck Island HVAC convert window A/C to split systems on Kwajalein, Meck, and Roi-Namur Building Envelope Improvements on Kwajalein, Meck, and Roi-Namur LED Lighting on Kwajalein, and Meck (Roi-Namur in Phase II) Financial Summary $40M third party investment for phase I $2.2M projected annual cost avoidance 20 year task order term 55% reduction in diesel fuel consumption on Meck Island 64% reduction in lighting energy costs Future Projects ESPC Phases 2 & 3 Potential ESPC Phase 4 Concept Plan for 2.4MW solar PV array on Meck Island Construction camp for Kwajalein ESPC Leveraging Private Sector Expertise and Financing in Support of Resilience 20

21 Installation Energy and Water Plans & Utilities Privatization Update Mr. Thomas B. Delaney, Jr., P.E. Chief, Energy and Utilities Branch Energy and Facilities Policy Division Operations Directorate Office of the Assistant Chief of Staff for Installation Management

22 Installation Energy and Water Plans IEWP Development Steps 1. Identify requirements Review installation performance metrics Define IEWP stakeholders, scope, and goals Establish energy and water (E&W) needs for critical missions Develop baseline 2. Assess risk and opportunities Identify threats and hazards Assess risks and mission impact Evaluate conservation and efficiency opportunities 3. Generate solutions Scope best management practices Develop project concepts 4. Develop an implementation plan Prioritize solutions Document the IEWP Define the implementation and funding approach 5. Execute and evaluate the IEWP Report installation performance Review and update the IEWP 22

23 Use the IEWP Roadmap to Develop Solutions Funding Sources Appropriated Third-Party Low Cost/No Cost MILCON ESPC/UESC Planning ERCIP UP BMPs SRM OEI Exercises Construction of Biofuel Plant at Schofield Barracks Examples of Energy and Water Security Solutions: MILCON FY20 construction of a new substation inside the fence line at Detroit Arsenal Energy Resilience and Conservation Investment Program (ERCIP) FY19 construction of a connection between two substations at Fort Sill Restoration, Modernization, and Operations Electrical Repair, Clay Kaserne Comprehensive energy and water plans to support resilience planning required by FY18 NDAA Third-Party Partnering with local utility to build a biofuel plant on Schofield Barracks to support USAG Hawaii in event of a grid outage Prioritizing utilities privatization efforts to address critical deficiencies in energy and water system Notional Picture of an Army Microgrid Conceptual drawing of substation interconnect at Fort Sill 23

24 Army UP Program Status UP improves readiness by leveraging industry expertise and financing to upgrade and sustain utilities for safe, secure, efficient mission support. 152 out of 356 U.S. systems privatized (43%): 45 Electric, 36 Gas, 35 Water, 34 Wastewater, (+2 Heat/Power) 29% Portfolio Average Should-Cost avoidance $3.4 B Net Present Value saved compared to continued Army ownership FY17- FY18 UP Awards: 14 systems, $1.2 B cost avoidance (34%) Affordable Efficient Resilient Safe Strategic Investments for Critical Missions 24

25 UP Evaluation Decision Selects best option for FULL Sustainment Reduced risks + commodity savings are added benefits 50-Year $ Cost Deficiency Corrections Renewal & Replacement O&M Government Should Cost Leaks & Losses Self-Insured Risk O&M ~75% Funded Status Quo Portfolio Average 29% Cost Avoidance Upgrades + interest Recurring UP Offer 25

26 Risk Management 1990: Fort Benjamin Harrison: Gas explosion killed 2, injured 27 NTSB found Army negligence FY13 Fort Bragg Gas UP: 366 Leaks Detected 92 Grade 1 Leaks Fixed Incomplete Inventory 2010: San Bruno CA 2013 Senate (Markey) Report: 796 gas incidents 2002 to 2012: 116 fatalities, $811M in damage Cast iron or bare steel mains leak: 18x more gas than plastic pipe and 57x more than protected steel Actual FY16 Fort Hood Gas UP: 383 Leaks Detected 39 Grade 1 Leaks Fixed 26

27 Question and Answer Session

28 Q&A Session We look forward to your questions! When submitting questions, please: Identify yourself and organization Indicate which speaker your question is for, if known Acting DASA (E&S) Mr. J.E. Jack Surash, P.E. Army Energy Resilience Update OEI Executive Director Mr. Michael McGhee, P.E. Office of Energy Initiatives Update Special Assistant to the ASA IE&E Dr. Bret Strogen, P.E. Energy Savings Performance Contracts & Utilities Energy Service Contracts Update Chief, Energy and Utilities Branch Energy & Facilities Policy Division Operations Directorate, ACSIM Mr. Thomas B. Delaney, Jr., P.E. Installation Energy & Water Plans and Utilities Privatization Update 28

29 Thank You Thank you for joining us today! Army Energy & Army ACSIM Army If you have any additional questions, please 29