Dexter Gauntlett
Research Analyst
Kerry-Ann Adamson, Ph.D.
Research Director
Executive Summary:
Renewable Energy for Military Applications
Solar, Wind, Biomass, Geothermal, Hydrokinetic Energy,
Biofuels and Synfuels, Fuel Cells, Microgrids, Smart Meters,
and Energy Efficiency: U.S. Market Analysis and Forecasts
NOTE:
This document is a free excerpt of a larger report. If you are interested in
purchasing the full report, please contact Pike Research at
sales@pikeresearch.com
.
Published 3Q 2012
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
1
Section 1
E
XECUTIVE
S
UMMARY
1.1 Energy and National Security
This report focuses on the mandates for and development of renewable energy (RE)
technologies within the U.S. Department of Defense (DOD) and the military arena in general, with a concentration on mature electricity generating technologies which will make up the majority of applications in the next 12 years. In addition, Pike Research discusses energy conservation actions, such as the movement toward Net-Zero bases, mobile power
technologies, microgrids, biofuel and alternative fuel development and deployment, and other cleantech applications for the U.S. military currently underway.
The various composite branches of the U.S. DOD combine to form the single largest consumer of energy in the world – more than any other public or private entity, surpassing the
consumption totals of more than 100 nations. Energy is the lifeblood of the U.S. military and of the supporting governmental infrastructure that facilitates and controls it.
The DOD reportedly consumes 3.8 billion kilowatts hours (kWh) of electricity and 120 million barrels of oil per year. This translates to total primary energy consumption of over 1,100 trillion British thermal units (Btu) annually and a per capita consumption, including non-military DOD personnel, of 524 trillion Btu. The DOD currently spends approximately $20 billion per year directly on energy: 75% for fuel and 25% for facilities and infrastructure. The advancement of clean technologies into the mainstream of DOD spending is driven by legislation, national and international policy, departmental strategic goals and planning, technology cost reductions, and innovative financing and procurement tools. Officially, the annual DOD budget is about $800 billion, but Pike Research estimates the actual figure is much higher. A portion of total expenses includes the procurement of technology, vehicles, aircraft, vessels equipment, etc. that have renewable energy or cleantech components and at least $75 billion in research and development (R&D). As such, the DOD is now one of the most important drivers of cleantech markets in the United States.
1.2 Current Major Renewable Energy Initiatives
Changes in energy policy have provided countless opportunities throughout all operations of the military and the DOD, with many examples of renewable energy projects under the DOD
umbrella. Some of the most significant recent initiatives include:
» Targets of 1 GW of renewable energy installed capacity each for the Army, Navy, and Air
Force, by 2025
» 25% of all energy produced or procured from renewable energy sources by 2025 » 30% reduction in energy intensity on a BTU per square foot basis
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
2
» Development of the Navy’s Great Green Fleet Strike Group powered by biofuel, nuclear
power, synthetic fuels, and hybrid propulsion systems
» Experimentation and deployment of microgrid technologies at both U.S. facilities and FOBs » Increased focus on the tools required by the modern warfighter to operate and
communicate more effectively in combat zones and on patrol
Most of these initiatives have gained considerable momentum and many of the targets will be achieved. The power purchase agreement (PPA) and enhanced use lease (EUL) models enable military installations to pay the same amount or less for renewable sources of electricity as they do for retail power from the grid on day one. Enabling technology such as microgrids and smart meters will enable the integration of renewables alongside diesel generators at Forward Operating Basis as well as at bases and facilities connected to the national electric grid.
Chart 1.1 Total DOD Direct Annual Expenditures by Market Application: 2013-2025
$-$200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2013 2015 2020 2025 ($ M illio n s) Conservation Measures Smart Meters
Microgrids (Not including generation assets) Renewable Electricity Purchases
(Source: Pike Research)
Industry and government alike realize that for U.S. renewable electricity systems and transportation fuel, cost is the most important factor. In the case of advanced biofuels, advocates and industry participants see the military as the long-term customer that could bolster further investment required to drive down costs of domestic advanced biofuels that are currently uneconomic. However, an election year and polarized politics in the short-term threaten the support required from Congress to carry out the military’s mission to reduce dependence on foreign oil and increase energy security as currently planned.
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
3
1.3 Large-scale Renewable Energy Installations at DOD Facilities
The future of DOD renewable energy installations will be in the form of large-scale RE installations, defined as 1 MW capacity or more, represent the largest current opportunity for RE applications. The Army’s Energy Initiatives Task Force (EITF), which is directing the implementation strategy for the Army has screened 180 Army and National Guard sites and has identified potential for 20 different renewable energy installations across 20 installations totaling 683 MW. Technology cost reductions and the use of Power Purchase Agreements (PPA) and Enhanced Used Lease (EUL) as contracting vehicles will enable mature technologies such as solar PV, biomass, wind, and geothermal power to be rapidly and cost-effectively deployed at scale during the next 12 years. This report quantifies the deployment capacity and DOD expenditures of each technology across the different branches of the U.S. military through 2025.
1.4 Tactical Energy Consumption and Renewable Energy for Mobility
Liquid petroleum-based fuel represents approximately three-quarters of total DOD annual energy consumption and spending. Based on trends over the last decade, this approaches $20 billion annually. The Defense Energy Support Center (DESC) has delivered between 29 million barrels and 33 million barrels of petroleum products to the DOD for the last 5 years. U.S. domestic oil production peaked in the early 1970s and the United States has since become the largest importer of oil in the world. As the largest consumer of oil in the country, the military is currently completely dependent on foreign oil. Daily military operations around the planet depend on an enormous array of fuel-consuming equipment, including: approximately 11,000 aircraft and helicopters (as well as unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), missiles, etc.), more than 200 combat and support Navy vessels (and unmanned underwater vehicles (UUVs)), 200,000 tactical vehicles (tanks, trucks, and light armored vehicles), and over 190,000 non-combat vehicles, including trucks, cars, buses, etc. Pike Research estimates that the current horse race to find a technology and commercially viable approach to the production of fuels and JP-8 in particular, from renewable sources has only started. It is likely that multiple approaches – photosynthetic, heterotrophic, cellulosic, fermentation, etc. – will contribute to the ultimate solution.
1.5 DOD and U.S. Cleantech Market at Transition Point
It is worth noting that a similar situation with respect to transitioning energy sources for the military occurred 100 years ago. In 1910, the British and American Navies relied primarily on coal. The then-powerful British Navy saw strategic importance in converting its fleet to oil-powered engines. Thus, it provided capital resources to create a new exploration, refining, and distribution endeavor called Anglo-Persian Oil Company – known today as BP.
Similarly, Pike Research sees the DOD as one of the most important drivers for cleantech markets and innovation today with the potential to directly impact non-military sectors in the future, much the way fossil fuel industries did in the 20th century.
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
91
Section 8
T
ABLE OF
C
ONTENTS
Section 1 ... 1
Executive Summary ... 1
1.1 Energy and National Security ... 1
1.2 Current Major Renewable Energy Initiatives ... 1
1.3 Large-scale RE Installations at DOD Facilities ... 3
1.4 Tactical Energy Consumption and Renewable Energy for Mobility ... 3
1.5 DOD and U.S. Cleantech Market at Transition Point ... 3
Section 2 ... 4
Major Renewable Energy Markets & Current Initiatives ... 4
2.1 Overview of Military Renewable Energy Applications to Date ... 4
2.2 Renewable Energy Projects for DOD Facilities and Installations to Date ... 5
2.3 Large-scale RE Installations at DOD Facilities ... 6
2.4 Major Renewable Electricity Markets by Technology ... 7
2.4.1 Solar Energy ... 7
2.4.1.1 Large-scale Solar PV Facilities on DOD Property ... 8
2.4.1.1.1. Historic and Current Cost Trends of Solar PV on DOD Property ... 10
2.4.1.2 Solar Thermal Heating and Solar Hot Water ... 10
2.4.1.3 Concentrating Solar Thermal Electric ... 10
2.4.1.4 Flexible Solar Technologies ... 10
2.4.1.5 Space-Based Solar Power ... 11
2.4.2 Wind Energy ... 11
2.4.2.1 Wind Energy Trends in DOD Markets ... 11
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
92
2.4.2.2.1. Cost per Kilowatt-hour ... 12
2.4.2.2.2. Equipment Costs ... 12
2.4.2.3 Market Size... 13
2.4.2.4 Wind Turbine Conflicts with Military Radar ... 13
2.4.3 Biomass Energy ... 14
2.4.4 Geothermal Energy ... 15
2.4.4.1 Hydrocarbon Production Wells ... 15
2.4.4.2 Ground Source Geothermal Heat Pumps ... 15
2.4.5 Waste-to-Energy ... 16
2.4.5.1 Leading Companies Currently Working with DOD on WTE ... 16
2.4.5.2 Mobile W2E ... 17
2.4.6 Military Microgrids ... 17
2.4.6.1 DOD Microgrid Initiatives ... 18
2.4.6.1.1. Overview ... 18
2.4.6.1.2. Military Energy Surety Microgrid System... 19
2.4.6.1.3. Smart Power Infrastructure Demonstration for Energy Reliability and Security ... 19
2.4.6.2 Case Study: Twentynine Palms Marine Base ... 20
2.4.7 Hydrokinetic, Tidal, and Wave Energy ... 21
2.4.8 Ocean Thermal Energy Conversion ... 21
2.4.9 Hydropower ... 22
2.4.10 Fuel Cells ... 22
2.4.10.1 Fuel Cell Potential for Unmanned Air and Ground Vehicles ... 23
2.4.10.2 Unmanned Ground Vehicles ... 24
2.4.11 Smart Metering ... 25
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
93
2.5.1 Enhanced Use Lease ... 26
2.5.2 Power Purchase Agreements/Federal Acquisition Regulation ... 27
2.6 Energy Conservation ... 28
2.6.1 Energy Conservation for Tactical Operations ... 28
2.6.2 Energy Efficiency Contracting Vehicles ... 28
2.6.2.1 Energy Savings Performance Contracts ... 28
2.6.2.2 Utility Savings Contracts ... 29
2.6.3 DOD and DOE Federal Energy Management Program Interaction ... 29
2.6.4 Defense Energy Conservation Investment Program ... 29
2.6.5 Total DOD Energy Conservation Market ... 29
2.7 Transportation Biofuels and Synthetic Fuels ... 30
2.7.1 Background ... 30
2.7.2 Total Fuel by Type ... 30
2.7.3 DOD Fuel and Energy Consumption by Application: Peacetime versus Contingency Operations ... 31
2.8 Fully Burdened Cost of Fuel ... 32
2.9 Current U.S. Government Biofuels Initiatives with Impact on the DOD ... 33
2.9.1 Defense Energy Support Center ... 33
2.9.1.1 DESC Support of Alternative Fuels... 34
2.9.2 DARPA-Sponsored Research on Biofuels for the Military ... 34
2.9.2.1 The DARPA Phase O BioFuels Program ... 34
2.9.2.2 DARPA Phase I and II Biofuels Program (BioFuels: Alternative Feedstocks Program) ... 35
2.9.2.2.1. Algal Biofuel Commercial Viability ... 36
2.10 Aircraft ... 37
2.10.1 Synthetic Fuel ... 38
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
94
2.11 Land Vehicles ... 40
2.11.1 Tactical Vehicles, Trucks, and Tanks ... 40
2.11.2 Joint Light Tactical Vehicles ... 40
2.11.3 Non-Tactical Vehicles ... 42
2.12 Marine Vessels ... 43
2.12.1.1 Green Strike Group ... 44
Section 3 ... 45
Market Drivers by Major Military Branches ... 45
3.1 DOD Energy Consumption ... 45
3.2 DOD Fuel Consumption ... 45
3.3 Net-Zero Initiative ... 46
3.3.1 Net-Zero Applications to Tactical Operations... 46
3.4 Renewable Energy Focus and Directives by Military Branch ... 46
3.5 Army ... 47
3.5.1 Directives ... 47
3.5.2 Current Renewable Energy Programs ... 48
3.5.3 U.S. Army Renewable Energy Targets ... 49
3.6 Air Force ... 50
3.6.1 Directives ... 50
3.6.2 Current Renewable Energy Programs ... 51
3.6.3 Air Force RE Targets ... 52
3.7 Navy/Marines ... 52
3.7.1 Directives ... 52
3.7.2 Current Renewable Programs ... 53
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
95
3.8 Alternative Fuels Development ... 54
3.8.1 U.S. Biofuels Production from Algae Feedstocks ... 55
Section 4 ... 58
Key Industry Players ... 58
4.1 Select Major Defense Contractors ... 58
4.1.1 BAE Systems, Inc. ... 58
4.1.1.1 Marine Energy Conversion ... 58
4.1.1.2 Hybrid-Electric and Fuel Cell Propulsion Systems ... 59
4.1.2 Boeing Co. ... 60
4.1.2.1 Biofuels ... 60
4.1.2.2 Solar Cell Technology ... 61
4.1.3 Booz Allen Hamilton ... 61
4.1.3.1 Alternative Energy and Energy Efficiency Solutions ... 61
4.1.3.2 Renewable Energy Projects on DOD Property ... 61
4.1.4 General Dynamics Corp. ... 62
4.1.4.1 Fuel Cell Technology ... 62
4.1.4.2 Hybrid-Electric Technology ... 62
4.1.5 General Electric Company ... 63
4.1.5.1 Microgrid Technology Development ... 63
4.1.5.2 Wind ... 63
4.1.6 ITT Exelis ... 63
4.1.6.1 Geothermal Energy Products ... 63
4.1.7 KBR Inc. ... 64
4.1.7.1 Biomass/Biofuels/Waste to Energy ... 64
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
96
4.1.8.1 Hybrid Fuel Cell Systems ... 64
4.1.9 Lockheed Martin Corp. ... 64
4.1.9.1 Solar Energy ... 65
4.1.9.2 Marine & Hydrokinetic Energy ... 65
4.1.9.3 Smart Grid ... 65
4.1.10 Northrop Grumman Corp. ... 66
4.1.10.1 Hybrid-Electric Propulsion ... 66
4.1.11 Science Applications International Corp. ... 67
4.1.11.1 Algae to Biofuels, Alternative Fuels ... 67
4.1.11.2 Solar Technologies ... 67
4.1.11.3 Marine Energy and Wind Technologies ... 67
4.2 Other Select Military/Defense Contractors with a Strong Focus on Renewable Energy ... 68
4.2.1 ACCIONA Solar Power, Inc. ... 68
4.2.2 Bechtel Corporation ... 68
4.2.3 Clark Energy Group ... 69
4.2.4 General Atomics ... 69
4.2.4.1 Renewable Energy Power Conversion ... 69
4.2.4.2 Biofuels from Algae ... 69
4.2.5 Honeywell International ... 70
4.2.6 Oshkosh Defense ... 70
4.2.6.1 ProPulse Hybrid Diesel-Electric Drive ... 70
4.2.6.2 Renewable Energy Mission Module ... 71
4.2.7 Protonex Technology Corporation ... 71
4.2.8 SkyBuilt Power ... 71
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
97
4.3.1 SolarCity ... 72
4.3.2 SunPower ... 72
Section 5 ... 73
Market Forecasts ... 73
5.1 DOD Expenditures by Market Application ... 73
5.2 Renewable Energy Installed Capacity by Military Branch ... 74
5.3 Electricity Expenditures via Renewable Electricity PPAs / EUL Contracts ... 77
Section 6 ... 80
Company Directory ... 80
Section 7 ... 82
Acronym and Abbreviation List ... 82
Section 8 ... 91
Table of Contents ... 91
Section 9 ... 98
Table of Charts and Figures ... 98
Section 10 ... 100
Scope of Study ... 100
Sources and Methodology ... 100
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
98
Section 9
T
ABLE OF
C
HARTS AND
F
IGURES
Chart 1.1 Total DOD Direct Annual Expenditures by Market Application: 2013-2025 ... 2
Chart 2.1 Snapshot of Cost per Gallon of Algae versus Transportation Fuels ... 37
Chart 3.1 Price Parity Experience Curve for Algae-based Biofuels, United States: 2009-2020 ... 55
Chart 3.2 Algae Biofuels Production, North America: 2010-2020 ... 56
Chart 5.1 Total DOD Direct Annual Expenditures by Market Application: 2013-2025 ... 73
Chart 5.2 Annual and Cumulative Renewable Energy Installed Capacity, All Military Branches by Technology: 2013-2025 ... 74
Chart 5.3 Breakdown of Army Renewable Energy Installed Capacity by Technology: 2013-2025 ... 75
Chart 5.4 Breakdown of Navy Renewable Energy Installed Capacity by Technology: 2013-2025 ... 75
Chart 5.5 Breakdown of Air Force Renewable Energy Installed Capacity by Technology: 2013-2025 ... 76
Chart 5.6 Annual Expenditures from PPAs, Combined Army, Navy (including Marines), Air Force Renewable Energy Facility Installations by Technology: 2013-2025 ... 78
Chart 5.7 Average Military PPA Rates, Leading RE Technologies: 2013-2025 ... 79
Figure 2.1 Map of Potential DOD Large-scale Renewable Energy Opportunities ... 7
Figure 2.2 Potential Economically Feasible Installed Capacity for Solar Technology at Select U.S. Military Bases ... 8
Figure 2.3 Current Level and Proportional Army Investment in Research of Essential Microgrid Components ... 20
Figure 2.4 Current Smart Metering Initiatives of DOD Facilities and Buildings ... 26
Figure 2.5 DOD Fuel Consumption by Type (0% indicates less than 1%) ... 31
Figure 2.6 DOD Energy Consumption by Application, Peacetime versus Contingency Operations ... 31
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
99
Figure 3.1 DOD Proportion of Total U.S. Government Fuel Consumption... 45
Figure 3.2 Mandated Changes in Energy Use for the Department of Defense, Percentage Change, 2000-2030 ... 46
Figure 3.3 U.S. Air Force, Navy, and Army Fuel and Energy Utilization ... 50
Table 2.1 Number of DOD Renewable Energy Initiatives by Type: 2010 ... 6
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
100
Section 10
S
COPE OF
S
TUDY
This report focuses on the mandates for and development of renewable energy (RE) technologies within the U.S. Department of Defense (DOD) and the military arena in general. Pike Research primarily concentrates on the wide array of emerging RE technologies that are presently competing for incorporation into mainstream DOD activities. In addition, this report discusses energy conservation actions, such as the movement toward LEED certification, insulation measures for forward operating bases (FOBs), retrofits for military installations, and cyber security and other cleantech markets.
S
OURCES AND
M
ETHODOLOGY
Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.
Additional analysis includes secondary research conducted by Pike Research’s analysts and its staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.
These primary and secondary research sources, combined with the analyst’s industry expertise, are
synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.
Pike Research, a part of the Navigant Consulting, Inc. Energy Practice, is a market research group whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. Pike Research is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
101
N
OTES
CAGR refers to compound average annual growth rate, using the formula: CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.
CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well. Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.
©2012 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
102 Published 3Q 2012
©2012 Navigant Consulting, Inc. 1320 Pearl Street, Suite 300 Boulder, CO 80302 USA Tel: +1.303.997.7609
http://www.navigant.com/pikeresearch
This publication is provided by Pike Research, a part of the Navigant Consulting, Inc. (“Navigant”) Energy Practice and has been provided for informational purposes only. This publication may be used only as expressly permitted by license from Navigant and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed, or used without the express written permission of
Navigant. Navigant makes no claim to any government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication), and makes no express or implied warranty, guaranty, or representation concerning the information contained in this publication, its merchantability, or its fitness for a particular purpose of function. Any reference to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply an endorsement, recommendation, or favoring by Navigant. Navigant does not assume, and hereby disclaims, any liability that may result from any reliance on or use of any information contained in this publication, or for any loss or damage caused by errors or omissions in this publication. This publication is intended for the sole and exclusive use of the original purchaser. If you do not have a license from Navigant covering this publication, please refrain from accessing or using this publication. Please contact Navigant to obtain a license to this publication.
