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Federal Agency Use of Energy Savings Performance Contracting Has Banner Year for Private Investment – Agencies Look to Achieve More Res...

The U.S. Department of Energy (DOE) Federal Energy Management Program (FEMP) is pleased to announce that during fiscal year 2018 federal agencies achieved a record year of more than $800 million of energy infrastructure improvements. Agencies utilized DOE’s pay-from-savings energy savings performance contracts (ESPCs) to leverage private sector investment to achieve energy efficiency and water conservation projects that renew federal infrastructure and increase energy security and resilience. This is the largest annual investment amount in DOE’s ESPC program history and will generate total guaranteed energy and water cost savings of almost $1.7 billion.

FEMP provides agencies with expert assistance, guidance, and training to help them implement ESPC projects, continually working to increase project activity across the federal government. During the record fiscal year, 10 agencies awarded 23 ESPC projects to eight energy service companies (ESCOs) in 15 states and four countries. The month of September alone represented $341 million in private investment, approximately equal to the typical annual ESPC awards for a fiscal year. The average award size is about $35 million with the minimum and maximum award size ranging from $3 million to $132 million. The average contract term for these projects is approximately 20 years. 

The combined 23 projects are expected to achieve more than 2.3 million MMBtu in annual energy savings and over 324 million gallons per year of annual water savings. The energy saved is equivalent to the annual household energy usage of 25,800 homes or 49,000 cars off the road and almost $2.8 million dollars in annual water savings. Moreover, the more than $800 million in private investment represents 6,475 job-years of good-paying jobs in engineering, construction trades, and manufacturing.

ESPCs have proven to be an excellent vehicle for procuring and deploying energy-efficient and advanced technologies for federal facilities, while helping to address deferred maintenance and reliability and resilience of for mission assurance. The types of energy conservation measures (ECMs) that will be installed include energy efficiency technologies and systems, water conservation, renewable energy, and resilience. While energy efficiency technologies comprise the majority of the types of ECMs to be installed, progress continues on including renewable energy to agency project portfolios. The renewable investment is approximately $90 million and includes a planned 35.93 MW solar photovoltaics. 

During fiscal year 2018, a number of agencies that are major ESPC users requested resilience ECMs to address their mission assurance priorities. Accordingly, FEMP enhanced the ESPC program by providing tools and guidance to help agencies develop projects that will ensure successful execution of their critical missions. As a result, resilience ECMs are valued at $116 million or 14% of all fiscal year 2018 investments. Three project examples are provided to highlight resilience ECMs:

  1. At Joint Base San Antonio (JBSA), the Air Force ESPC project includes integrated and comprehensive energy security across the JBSA. These ECMs will modernize and optimize base building systems while providing resiliency and mission continuity through a mix of distributed generation, energy efficiency measures, and targeted microgrid operation for critical loads. 

  2. The Commander Navy Region EURAFSWA ESPC project will enhance mission assurance by reducing shore energy consumption at three European installations  by 23%; and by improving energy reliability and resiliency through various facility, equipment, and controls upgrades and diversification of fuel sources. According to the Navy, “…these energy security improvements could not be accomplished as quickly, given time and funding constraints for traditional, funded projects.” 

  3. At the Veterans Affairs' (VA) VA Northport Medical Center in VISN 2, the ESPC project will address critical infrastructure improvements, enhancing the efficiency, reliability and resiliency of the facility through the installation of a 2 MW cogeneration plant and replacement of the facility’s steam distribution system. This project provides a sustainable solution for the facility and ensures veterans and their families have a continued exceptional environment of care for generations to come.

ESPCs allow federal agencies to implement projects that save energy and/or water, improve building comfort, and provide cost savings without up-front capital and special Congressional appropriations. ESPC is a partnership between a federal agency and an ESCO. The ESCO conducts a comprehensive energy audit of federal facilities, identifies improvements to save energy and then designs and constructs a project that meets the agency's needs. By law the ESCO arranges the necessary funding and guarantees that improvements will generate energy cost savings to pay for the project over the term of the contract (up to 25 years). Learn more about ESPCs and awarded projects


Distribution channels: Energy Industry

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