Navy Energy Program and Initiatives

1. Navy Energy Program and Initiatives LCDR J. Doug Herrin, P.E., C.E.M. October 4, 2012

2. NAVFAC SE AOR Shaw Charleston Beaufort Meridian Albany Pensacola Kings Bay Barksdale Mayport Keesler Fort Worth Blount Island Gulfport Jacksonville New Orleans Cape Canaveral Panama City Orlando Whiting Field Corpus Christi Key West Kingsville Guantanamo Bay Haiti

3. NAVFAC SE Business Volume

4. Navy Energy Priorities • Security • “Protection from vulnerabilities related to the commercial electric grid, which is susceptible to physical and cyber attack, natural disaster, and malfunction” – Naval Energy: A Strategic Approach (2009) • Navy increases shore energy security by decreasing energy consumption, increasing energy efficiency, increasing use of alternatives, and increasing the reliability of its energy supply to critical assets • Independence • “achieved when naval forces rely on energy resources that are not subject to intentional or accidental supply disruptions” – Naval Energy: A Strategic Approach (2009) • Fuel itself, transportation, and each terminus on its route should remain secure from genesis to use • Provide secure, reliable, and affordable energy to our Navy and Marine Corps • Mitigate dependence on, and vulnerability to the commercial grid and become more energy efficient in the process

5. Department of the Navy’s Energy Profile • DOD is the single largest energy consumer in the nation • DOD accounts for 80% of the Federal Government’s energy consumption • Department of the Navy • 102 installations worldwide • 90, 045 buildings totaling more than 663M square feet • Consumes 28% of DoD’s operational and shore energy • FY11 installation energy • Consumed 8,850 GWh of electrical power • Produced or procured approximately 1,770 GWh of renewable energy on or near its installations – 20% of demand

6. Geothermal Energy A 270-megawatt renewable energy geothermal power plant at Naval Air Weapons Station China Lake provides on average 1.4 million megawatt-hours of electricity to the California power grid annually, enough power for 180,000 homes. The China Lake plant was built using a public-private venture business model. http://greenfleet.dodlive.mil/energy/shore/renewable/geothermal/

7. Efficiency and Demand Reduction • DON is a leader in Federal use of financed energy contracts • Energy Savings Performance Contracts (ESPCs) • Utility Energy Service Contracts (UESCs) • Since 2008, Navy has implemented 70 ESPCs and 275 UESCs • DON has implemented $1.4B of life-cycle efficiency improvements • Reduced energy intensity (power per square foot – MBtu/KSF) by -16.9% relative to 2003 Navy baseline toward goal of -18% at end of FY11 • Projects should match or beat life-cycle costs for brown power within the regional market Strategy includes concentrating on reducing energy consumption through the award of energy efficiency projects while simultaneously pursuing financed renewable energy projects

8. Navy Shore Energy Strategy ENERGY SECURITY & COMPLIANCE Renewable Energy & Sustainability Energy Efficiency Transform Navy From Culture of Consumption to Culture of ConservationThrough Transparency and Accountability Energy Security: - Redundancy - Resiliency - Reliability NavyEnergy Culture The Right Technologyat the Right Time - Watch - Partner - Lead Energy Efficiency First (OPNAV) “Compliance” is unique to the Shore

9. Energy Program? Pyramid Energy Demand Renewable Energy Energy Conservation Energy Efficiency Energy Pyramid Penn State University

10. Technology • Technology • Controls • Magnetically levitated centrifugal compressors • LED lighting, induction lighting • Insulation, solar hot water • More efficient chillers, glazing, plumbing fixtures • Metering and smart grid • Cost/Benefit • Building lifecycle > 67 years • Maintenance cost on specialty items particularly important • Limited ability to source select • Economic difference within region: Key West, GTMO

11. Design Standards • Primary Standards • Unified Facilities Criteria • International Building Code 2009 • Anti –Terrorism Force Protection (ATFP), UFC 40010-01 • USGBC LEED Gold • ASHRE 90.1-2010 • Whole Building Design Guide • Individual base requirements: IAP, Force Protection, Airfield criteria, etc • Source selection for Design Build often evaluates design approach for best value: TOC and mission viability • Competing priorities • Energy, ATFP, Environmental, Cost require thoughtful design

12. SE Industry Energy Partnership • Energy partnership forum is held to introduce new technology and solutions that we can integrate into facilities maintenance and construction projects • By partnering with industry, we leverage their expertise to meet our energy reduction and security goals • New technologies should be submitted to NAVFAC Engineering and Expeditionary Warfare Center (805) 982-3764

13. CNRSE Installation Awards

14. Energy Reduction Progress 2003 Baseline Where we need your help Our challenge

15. Energy Funding Average Base goes from ~$3M/ YR to ~$11M/ YR in Direct Energy Investment Total FY Investment ($M) PB 11 FY 11 Energy Program ~ $238M PB 12 FY 12 Energy Program ~ $781M

16. PB13 FY13 – Total Energy Funding ECIP~ $23M LEED w MILCON ~ $60M PB 13 FY 13 Energy Program ~ $650M 3rd Party Financing ~ $120M Geotherm. ~ $9M eMMRP ~ $41M OMN ~ $ 396M Average Base = $9.3M/ YR in Direct Energy Investment

17. Energy Project Types and Funding (current and projected) • RMe – CNIC’s Energy Special Projects Program • FY12 $220M (26 projects @ $12M = 6%) • FY13 $325M (56 projects @ $56M = 18%) • FY14 $210M projected (51 projects @ $24M = 12%) • FY15 $215M projected (Projects due to CNIC on 18 Nov 2012) • FY16 $225M projected • ECIP – Energy Conservation Investment Program • FY12 $23M ($15M) • FY13 $43M ($2M) • FY14 To be announced • FY15 Projects submitted to CNIC on 15 Aug 2012 • UESC/ESPC • Annual financed payments of $11M from UT Budget • Three projects in FY12 ($11M) • Navy goal of $300M in FY12/13 • eROI Tool

18. Energy Contracts FY12

19. Energy Contracts FY13 (projected)

20. eROI Tool Overview What is eROI? eROI is ratio of PV of total benefits over PV of total cost. Provides a consistent, quantifiable approach to prioritize energy projects that create value, using criteria that includes “hard” benefits, such as cost savings, as well as “soft” benefits, such as meeting stakeholder expectations. • eROI = (Present Value of Benefit) • (Present Value of Cost) Why is eROI useful? Using a weighted criteria approach, eROI tool enables Navy to rank and compare hundreds of energy projects submitted by installations, then invest in projects that deliver best ROI. Navy-wide optimized portfolio of energy projects and investments, created by this tool, positions Navy to achieve its energy consumption goal with efficient use of resources.

21. 1 Gigawatt Initiative • State of the Union (24JAN12 ): Navy Will Purchase “Enough Capacity to Power a Quarter of a Million Homes a Year” • 250K Homes = 1 GW of Power (~Honolulu, Orlando, Jackson, MS) • Coso Geothermal Plant ~270MW capacity • 180MW current output of Coso Geothermal Plant provides power for approximately 120K homes (average load of 1.5KW per home) • Draft 1 GW Task Force Charter • Assigns membership, roles/responsibilities to Secretariat, Navy & Marine Corps Echelon I & II commands • Focus primarily on larger projects using third party financing • Finalize the “Strategy” in 2012

22. Net Zero Installations • SECNAV Goal: 50% net-zero installations by FY20 • SECNAV Instruction 4101.3 of 3 Feb 12 defines a Netzero Installation as: “A DON Installation which, over the course of a fiscal year, matches or exceeds the electrical energy it consumes ashore with electrical energy generated from alternative or renewable energy sources. The alternative fuel generated electrical energy may be: 1) generated on the installation; or 2) generated off the installation but purchased for and consumed on the installation.” • Determine which installations have the best opportunity to achieve net zero in the most cost effective way • Determine what alternative energy projects to pursue at each installation based on NPV and ROI methodologies

23. Net Zero Study • Sites and Data provided by NAVFAC ESC • NAF El Centro, CA • NAS Fallon, NV • NS Guantanamo Bay, Cuba • NB Guam • NAS Key West, FL • NSB New London, CT • JB Pearl Harbor-Hickam, HI • Pacific Missile Range Facility, HI • NS Rota, Spain • NB San Diego, CA • NREL providing primary support to NZEI planning and assessment. • Funding: • DOE provided initial start up for NREL REO analysis for many Navy and Marine Corps Installations. • CNIC provided additional funds to complete the NREL REO analysis for all installations as well as to conduct site visits to 35-40 installations to validate the REO data and other related work • USMC also using NREL to conduct site visits to validate the REO data and other related work • Objective: develop cost effective strategy to achieve SECNAV goal of 50% of installations to be NZEI by 2020 • Approach • High level pre-screen of all bases for renewable energy opportunities • Select most cost effective sites for more in depth analysis (site visits) • Outcome: develop budget estimates for implementation for next POM cycle • Current Status: Navy/Marines-NREL Interagency Agreement approved in last month and now moving out

24. Technologies Evaluated • Evaluated for the following renewables: • Wind • Solar (PV (photovoltaic), thermal and hot water) • Biomass gasification boiler • Solar ventilation preheating • Day lighting • Technologies not evaluated: • Waste-to–energy (to be added for future screenings) • Geothermal (to be added for installations that have potential) • Landfill gas (to be added to future screenings)

25. NREL’s REO Screening Tool NREL’s REO tool is an early planning tool used to evaluate renewable energy options, estimate costs, and recommend a mix of technologies that meets the site’s energy goals REO aggregates energy systems data such as electric and thermal energy use, utility rates, incentives, and RE resource data REO results allow agencies to quickly and efficiently prioritize RE opportunities Costs, incentives, and other assumptions can change quickly REO is often used as part of the iterative project development process REO helps to inform project development and prioritize resources, but the results do not represent the final exact answer More detailed analysis is required prior to making project investment decisions

26. Results are NOT Conclusive Results for 1st 10 sites will change significantly during preliminary site assessments • This is the beginning of a multi-phased planning and analytical process involving the following stages 1) Preliminary screening (resource identification) 2) Exploration (resource verification) 3) Viability analysis (technology readiness levels) 4) Feasibility analysis (economic conditions) 5) Suitability analysis (siting and permitting – operational/environmental/land use compatibility) • This REO analysis addresses portions of the first four phases above • Site visits and follow-on efforts required to complete the first four phases • Suitability analysis (phase 5) will be completed for viable sites after phases 1-4 • Projects will be developed for viable sites after phase 5

27. DoN Smart Power Partnership Initiative (SPPI) • Group DoN installations into regional smart grids (at DoN FCAs) • Regional (DoN) real time visibility/monitoring of external supply, internal generation, utility systems, energy use (bldgs/systems) • Aggregate load and generation; participate in/establish incentive programs (i.e. Demand Response); move renewable power through the market (virtual wheeling) from point of generation to point of use • Define essential smart/micro grid capabilities and develop an ROI plus energy security based methodology to prioritize investments • “Power Partnerships” with internal and external stakeholders • Federal Energy Regulatory Commission (FERC), Regional Transmission Organizations (RTOs), Independent System Operators (ISOs), Public Utility Commissions (PUCs), Energy Service Providers (ESPs), Direct Access Cooperatives (Western, Southwestern, Southeastern, Bonneville Power), Local Utility, etc. • Indentify and prioritize critical power requirements • Identify and prioritize deferrable/discretionary loads • Develop Pre-Planned Responses, Load Shedding Plans and Plans for Continuity of Critical Power

28. Navy Smart Energy Background There have been a number of innovations recently towards a concept known as “Navy Smart Energy.” • Advanced Metering Infrastructure (AMI) • NDW Energy Vision and Smart Energy CONOPS • NDW Smart Grid • NW Energy and Utility Operations Center and Integrated ICS • A number of centralized Industrial Control Systems (ICS) • SW Area Wide Energy Management System (central DDC and SCADA) • Dahlgren and Little Creek central DDC • Kings Bay SCADA Operation Centers And a number of studies/proposals are underway that further the concept. • Norfolk Naval Station UEM OT-IC Project Study • Smart Energy Project Development Studies (26 sites): SW, ML and MW • Smart Power Partnership Initiative (SPPI) These innovations and continued progress on the concept have led to interest in the possible benefits of a corporate wide approach.

29. Smart Energy Defined The Smart Energy is a data-driven process targeted to specific objectives. The objectives are savings and energy reduction through specific actions. Objective/ Results Actions Results  What overall objectives does Navy want to accomplish? Actions  What key actions will help accomplish this? Analysis / Diagnosis • Integrated System of Industrial Controls: DDC, SCADA, AMI • Active Facility Management (ICS:DDC) • ICS:SCADA (improved reliability, energy security) • Identification of Energy Efficiency Opportunities (analytics leading to project development) • Actionable Stakeholder Metrics (tenant awareness) • Enhanced Demand Response (cost Reduction, grid support, SPPI) • Predictive Maintenance opportunities Approach Analysis  What key information does Navy need to support the actions? Data/Status Data  What critical raw data is needed to develop the analysis?

30. Energy: The Key Element We can create a more sustainable, cleaner and safer world by making wiser energy choices. – Robert Alan Non-renewable Energy All commodity usage consumes energy. Customers Corporate behavior change Renewable Energy EMS/DDC Commodity Production & Distribution reporting & policy control & sensing SCADA Monitoring Operations Centers AMI Monitoring is the key to knowing where and how commodity usage may be reduced.

31. Data Consumer Defense Information System Agency Navy Smart Energy Integrating Across the Enterprise Navy / USMC Installation DoN Smart Power Cluster • Program Drivers • SECNAV Energy Mandates • Legislative Requirements • (e.g. EPACT 2005) • Budget Constraints • Executive Orders • Navy / USMC Mission Navy / USMC Utilities (Microgrid) $$ Navy / USMC Facilities (HVAC & Lighting) Power Industry (e.g. Utility Supplier & Regulators) Smart Power Partnership Control Sensors SCADA DDC Building Managers Sensors Control • DoN Benefits • Energy Security • Behavior Change • Real-Time Energy Management • Customer Visibility into Usage • Utility Cost Saving • Energy Awareness • Demand Response • Load Balancing • Improved Efficiency • Integration of Renewables • Accurate Billing • Loss Identification • Meets Regulatory Requirements • Enterprise Benchmarking • Improved Customer Satisfaction • Predictive Maintenance • Reduced Metering Overhead • Fault Prediction • Production & Distr. Control • Enhanced Safety Navy / USMC Installation Energy Managers Time of Use Power Quality Operation Centers DoN Target Cluster Areas DoN Corporate AMI DoDD 8320.02 NetCentric Data Strategy DDC & SCADA Historical Data Utility Usage Navy /USMC Region Meta Data Meter Data Management (MDM) Data Acquisition & Integration Discovery via PSNET via NMCI CIRCUITS Authors: Chet Braun & Eric Lynch Last Update: 10/19/2011

32. Integrated System of Industrial Controls Commodity Production, Distribution and Consumption Collection of ICS Devices AMI Meters SCADA & DDC Control • DDC, SCADA and AMI devices treated equivalently • Data point aggregation allows for reorganization • Operator screens may display any information in any format, independent of vendor software

33. Questions?