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Agencies look to award more renewable-energy ESPCs

Oct. 19, 2012 - 05:52PM   |  
By ANDY MEDICI   |   Comments

Competition for federal energy-saving projects is white-hot these days.

One reason is that a special brand of contract, called an energy savings performance contract (ESPC), allows agencies to install extensive energy-efficiency renovations without upfront money — those renovation costs are borne by the vendor in exchange for payments from energy cost savings over time.

Another reason is a December presidential directive that ordered agencies to enter into $2 billion worth of ESPCs by October 2013.

So what makes an ESPC bid competitive?

Renewable energy.

Agencies uninterested in renewable energy only a year or two ago are now pressing vendors to include some form of renewable energy in their ESPC proposals, said John Dukes, vice president of federal and public-sector energy efficiency at Constellation Energy.

“Nowadays they are looking at it and saying, ‘Find a way to make it part of this project,’ “ Dukes said.

Agencies are particularly interested in smaller-scale renewable energy projects, such as solar panels on rooftops and carports, or small wind turbines.

Jeff Sherman, federal energy director at contractor Schneider Electric, said every ESPC solicitation he has seen that contains specific requests for energy-saving equipment includes a request for renewable-energy production.

“Inevitably, renewable energy becomes a part of the scope of the work,” Sherman said.

One reason for the attraction to renewable energy, says Bill Johnston, energy program director at Schneider Electric, is that the contractor is responsible for all maintenance of the project for the duration of the ESPC contract.

“They can place the responsibility for its performance on the energy services contractor,” Johnston said.

Barbara Humpton, senior vice president of business development at Siemens Government Technologies Inc., said renewable energy is a “must-have” for agencies because it fills a variety of mandates with no upfront costs.

“It takes the burden off their appropriated budgets and allows them to focus on their mission-critical needs,” Humpton said.

She said agencies have been requesting renewable-energy projects, ranging from rooftop solar panels to projects at military installations, as part of their ESPCs.

Siemens Government Technologies is now helping the Army install a 4-megawatt solar field on a 42-acre tract of land at its White Sands Missile Complex in central New Mexico. The $16.8 million project, to be completed in December, will generate about 10 percent of the installation’s power and will cost the Army the same amount it currently pays for its electricity, according to the Army.

Other ESPCs that incorporate renewable-energy projects include:

• The Architect of the Capitol plans to install solar panels on the roof of the Hart Senate Office Building in Washington to generate up to 150 kilowatts of power — enough to power about 100 homes. The agency is interested in a nine- to 20-year contract.

• The Energy Department’s Savannah River Site in Aiken, S.C., this year completed construction of a new 20-megawatt biomass power plant. The $795 million project will be paid for entirely out of energy savings — estimated at about $47 million a year — making it the largest ESPC awarded by the government.

• The Transportation Department’s Volpe Center in Cambridge, Mass., intends to incorporate solar, wind or geothermal energy into its retrofit of lighting and heating and cooling systems.

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