U.S. Army Corps Of Engineers Solicits $7 Billion Of New Renewable Energy

On August 8, 2012, the U.S. Army Corps of Engineers posted a request for proposals from renewable energy developers to offer the government up to $7 billion of total contracted energy from new projects for use on U.S. Army installations over a period of 30 years. The government plans to purchase the energy through longterm offtake contracts, and the companies that win those contracts will be responsible for developing, owning, financing, designing, building, operating and maintaining the plants.

John M. McHugh, Secretary of the Army, announced the RFP as a means to further the Army's goal to deploy a gigawatt of renewable energy by 2025. The RFP followed a recent memorandum of understanding agreed between the U.S. Department of the Interior and the U.S. Department of Defense to identify opportunities to develop renewable energy resources on 16 million acres of "withdrawn" public land set aside for defense-related purposes, and to otherwise facilitate renewable energy projects near military installations, including a dedicated partnership for offshore wind.

In the face of ongoing congressional opposition to traditional federal renewable energy incentives, these Department of Defense initiatives represent a unique and present opportunity for developers of renewable energy projects. Of note, the military spent more than $17 billion on fuel last year, and accounts for 1 percent of all U.S. energy use – making its activity in the alternative energy market something that energy companies and contractors already involved in energy efficiency projects should closely watch.

How to Qualify

October 5, 2012 is the deadline for developers to submit proposals to be ultimately awarded an "Indefinite Delivery/Indefinite Quantity" (ID/IQ) contract. If qualified at this initial stage, the developer becomes part of a pool of pre-selected companies that then have three years to bid for "task orders" through which the government will contract to purchase energy from specific projects. The Army will determine whether developers qualify for an ID/IQ contract based on the following criteria: (i) corporate technical and management experience in developing, operating and maintaining renewable energy projects and performing PPA obligations, (ii) financial capability to self-finance or obtain third-party financing at competitive rates, (iii) past performance, (iv) small business participation and (v) a reasonable and realistic maximum unit price for the proposed...