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Assistant Secretary of the Navy (Energy, Installations & Environment) 1
Department of the NavyRenewable Energy Program Office (REPO)
Overview
Monica DeAngeloDirector, Facilities and Renewable Energy Program Integration
Energy Exchange Conference Panel:Renewables Through Private Financing
August 2015
Assistant Secretary of the Navy (Energy, Installations & Environment) 2
DON Renewable Energy Priorities
Produce/Procure 1 GW of renewable energy
500 MW in Procurement by 31 Dec 2014 500 MW in Procurement by 31 Dec 2015
Provide a roadmap to integrate renewable energy into the installation electrical grid
Projects Will Improve Energy Security across DON Installations
Assistant Secretary of the Navy (Energy, Installations & Environment) 3
REPO Project Development Models
Different Development Models Accommodate Diverse Requirements and Market Conditions
Model 1Model 1
Model 2Model 2
Model 3Model 3
Off-base Generation for On-base Consumption (Acquisition: USC/PPA)
On-base Generation for Off-base Consumption (Real Estate: Outgrant)
On-base Generation for On-base Consumption
(Acquisition: PPA)
Assistant Secretary of the Navy (Energy, Installations & Environment)
Requirements Generation Process
4
Det
ails
› Research energy markets using data from Bloomberg New Energy Finance, NREL, and other industry experts and publications
› Collect installation energy usage data
› Analyze renewable resource profiles in target regions
Load & Resource Analysis (LRA)1 Market Analysis2 Business Case
Analysis (BCA)3› Issue requirements
and solicit proposals from industry
Request for Proposal (RFP)4
1. Determine DON’s current energy costs
2. Scenario analysis for conventional and renewable energy
3. Calculate if renewable energy is economical
Assistant Secretary of the Navy (Energy, Installations & Environment)
Analysis of Current Electricity Bills
x Monthly Consumption
1,580,000 kWh=
$119,000
All-in Electricity Cost
Transmission
Distribution
$0.047/kWh
+
$0.000/kWh
$0.00/kWh
$0.003/kWh
$0.018/kWh
Other Market Charges
Grid Market Price
$0.007/kWh
State, market, ancillary service fees
$0.002/kWh
Capacity Charge
ESP Charge
RPS Compliance (State-specific)
Assistant Secretary of the Navy (Energy, Installations & Environment) 6
Analytic Approach
› Use LRA’s historical load data and market research to forecast expected costs of conventional energy compared to green energy
› Calculate if the net present value (NPV) of green energy is positive and therefore reduces DON energy costs
› Conduct sensitivity analyses to validate conclusions
Schematic of Power Cost Comparison
Comparative Analysis of Conventional and Renewable Energy
Assistant Secretary of the Navy (Energy, Installations & Environment) 7
Green Energy Net Benefit Determination
Net Present Value (NPV) Calculation
› The LRA tool uses model assumptions and historical load to forecast future energy purchases and costs under grid energy and renewable energy scenarios
› The tool calculates the NPV of savings that DON would realize with a renewable energy procurement compared to purchasing grid energy. The present value of future cash flows is discounted by 3.1% annually (per OMB Circular A-94), to calculate the total value of savings in 2014 dollars
› DON will only consider procurements that result in project cost neutrality or savings over the term of the contract
› Sensitivity analysis analyzes a range of inputs by varying model assumptions – including escalation rates and renewable PPA prices – to validate expected project savings
Grid Energy
Total Electricity
Costs
Renewable Energy
Total Electricity
Costs
Renewable
Procurement Total
Savings- =
Assistant Secretary of the Navy (Energy, Installations & Environment) 8
Business Case Analysis (BCA)
Example: Electricity Reliability Council of Texas (ERCOT)
Green Power Cost Grid Power Cost DON Savings
Annual Grid and Green Power Costs
Annual Energy Cost ($)
Redacted to Protect Source
Selection Sensitivity
Assistant Secretary of the Navy (Energy, Installations & Environment) 9
Model 1 Project Opportunities(as of June 2015)
Guam10 MW
DVP30 MW
ERCOT 58 MW
PJM up to 205 MW
*Project size are estimates that are subject to change.
DON RE Online CY1490 MW
CAISO up to 210 MW
Pax River & Indian Head
30 MW
REPO Project Opportunities
USN InstallationsUSMC Installations
Model 1 Opportunities
Italy 10 MW
Assistant Secretary of the Navy (Energy, Installations & Environment) 10
Model 3 Project Opportunities(as of June 2015)
HI15 MW
REPO Project Opportunities
USN InstallationsUSMC Installations
*Project size are estimates that are subject to change.
DON RE Online CY1490 MW
NS Newport13 MW
JBAB6 MW
Model 3 Opportunities
ESPC Opportunities
GITMO10 MW
Diego Garcia10 MW
Assistant Secretary of the Navy (Energy, Installations & Environment) 11
(202) 685-0533
Questions?
