Defense Infrastructure:

DOD Needs to Take Actions to Address Challenges in Meeting Federal Renewable Energy Goals

GAO-10-104: Published: Dec 18, 2009. Publicly Released: Jan 25, 2010.

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The Department of Defense (DOD) consumes about 60 percent of all energy used at federal government facilities. To encourage an increased use of energy from renewable sources, such as solar and wind power, (1) the Energy Policy Act of 2005 (the 2005 Act) directs DOD to consume at least 3 percent of its total electricity from renewable resources starting in fiscal year 2007; (2) Executive Order 13423 (the 2007 Executive Order) directs that an amount equal to half of the statutorily required renewable energy be generated by sources placed into service in 1999 or later; and (3) the 2007 Defense Authorization Act directed that at least 25 percent of electricity consumed by DOD come from renewable sources in fiscal year 2025. The Government Accountability Office (GAO) was asked to examine (1) DOD's progress toward these three key goals for consuming renewable energy in fiscal years 2007 and 2008, (2) challenges to DOD meeting those goals, and (3) DOD's plans to meet the goals. GAO reviewed relevant laws and DOD and Department of Energy (DOE) policy, plans, and data; interviewed agency officials; and visited DOD facilities.

DOD has three key goals for its installations' consumption of renewable energy, contained in the 2005 Act, the 2007 Executive Order, and the fiscal year 2007 National Defense Authorization Act. DOD met the goals in the 2005 Act and 2007 Executive Order in fiscal year 2007. However, in fiscal year 2008, DOD fell just short of the 2005 Act goal. Moreover, in fiscal years 2007 and 2008, DOD overstated its progress toward the goal in the 2007 Defense Authorization Act, counting nonelectric renewable energy. In these 2 fiscal years, the 2007 Defense Authorization Act goal allowed only electric renewable energy to be counted. According to amendments in the fiscal year 2010 Defense Authorization Act--which became law in October 2009--DOD is now able to count nonelectric renewable energy toward this goal. In fiscal years 2007 and 2008, when calculating progress toward the 2007 Defense Authorization Act goal, DOD included renewable electricity produced on DOD land, but not consumed by DOD. According to DOD, it has "facilitated production," but has not "directly consumed" this electricity. It is unclear whether such renewable energy should be included in the Office of the Secretary of Defense's (OSD) calculations of progress toward this goal. Moreover, OSD has not published guidance clarifying key terms in the language of the goal. With such guidance specifying how the services are to implement this goal, DOD will have greater assurance that it can accurately assess progress toward the goal and accurately report on this progress to Congress. DOD faces three key challenges in meeting the renewable energy goals. First, renewable energy projects may sometimes be incompatible with installations' need to use land for primary mission objectives. For example, wind turbines may conflict with aircraft operations during training. Second, renewable energy is often more expensive than nonrenewable energy. Therefore, using renewable energy can be at odds with DOD and DOE guidance that calls for DOD to invest in energy projects when cost-effective. In response, DOD plans to obtain additional funds by joining with private industry, such as local electric utilities, to develop renewable energy projects. Third, however, the use of those private sector approaches can be constrained by several factors. For example, energy produced by the projects may not count toward the renewable energy goals. By addressing these challenges, DOD would strengthen its ability to fully realize the potential of its renewable energy resources, improving its chances of meeting the goals in the most cost-effective way. OSD has not developed a long-term, DOD-wide plan to help ensure that DOD meets the renewable energy goals. Such a plan that identifies and addresses key challenges, has strategies for coordinating the services' renewable energy activities, sets realistic performance measures for achieving the goals, and aligns DOD resources will better enable DOD to meet the renewable energy goals.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD now has a Master Plan that was established and reported in the Fiscal Year 2011 Annual Energy Management Report dated June 2013. The Energy Performance Master Plan aligns investments to energy objectives, enables consistent Department-wide decisionmaking, and establishes metrics to evaluate the Department of Defense?s progress against the energy performance goals.

    Recommendation: To enhance DOD's ability to achieve the renewable energy goals consistent with the need to maximize cost-effectiveness, follow existing federal guidance, and increase oversight of DOD's renewable energy activities, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) in conjunction with the secretaries of the services to develop a long-term, DOD-wide plan to assist DOD in effectively and efficiently meeting the renewable energy goals over the long term. At a minimum, this plan should identify key challenges--such as the higher price of renewable energy compared with conventional energy and volatility in renewable energy certificate markets--that DOD faces in meeting the goals and ways to mitigate those challenges. The plan should also coordinate the services' renewable energy activities, contain realistic performance measures for DOD and the services so that OSD can accurately assess annual progress, and align DOD's resources in pursuit of the renewable energy goals.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD agrees that sufficient personnel with adequate training are required, but believes it is a component responsibility. However, since our report was issued, each of the services has met the intent our recommendation by establishing central energy offices to provide the expertise needed for large renewable energy projects. For example, the Army Energy Initiatives Task Force (EITF), now serves as the central management office for partnering with Army installations to implement cost-effective, large-scale renewable energy projects, and leveraging private sector financing.

    Recommendation: To enhance DOD's ability to achieve the renewable energy goals consistent with the need to maximize cost-effectiveness, follow existing federal guidance, and increase oversight of DOD's renewable energy activities, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) in conjunction with the secretaries of the services to facilitate the successful implementation of alternative financing approaches and help ensure that DOD can maximize its opportunities for completing cost-effective renewable energy projects by (1) determining the adequate number of energy managers, contracting officials, and other officials with the necessary expertise to administer these complex transactions and (2) determining and providing the appropriate level of training to these employees.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: OSD took action to implement this recommendation in its current 2012 Annual Energy Report.

    Recommendation: To enhance DOD's ability to achieve the renewable energy goals consistent with the need to maximize cost-effectiveness, follow existing federal guidance, and increase oversight of DOD's renewable energy activities, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) in conjunction with the secretaries of the services to develop and issue guidance to assist the services in determining how to balance the use of land for renewable projects with their installations' primary missions, thereby assisting installation commanders and potential investors in knowing which land on the installations may be available for renewable energy projects, consistent with the installations' mission capabilities.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: DOD issued report guidance for its fiscal year 2010 Annual Energy Management Report on August 30, 2010. The guidance includes a section describing the details of whether a renewable energy project counts toward the goals as we recommended.

    Recommendation: To enhance DOD's ability to achieve the renewable energy goals consistent with the need to maximize cost-effectiveness, follow existing federal guidance, and increase oversight of DOD's renewable energy activities, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) in conjunction with the secretaries of the services to develop and issue guidance specifying how to accurately report DOD's annual progress toward the 2007 Defense Authorization Act goal, as amended by fiscal year 2010 Defense Authorization Act. Among other things, this guidance should clearly define how the services are to apply the terms "produce" and "consume" to their implementation of the goal and how OSD is to apply the terms to its reporting of DOD's progress toward the goal.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: DOD issued its Fiscal Year 2012 Department of Defense Annual Energy Management Report in June 2013 and building upon past reports it now includes detailed information about renewable energy projects for each of the services. For example, the report includes appendices listing energy projects funded by appropriations; non-governmental third party funded energy projects; military construction projects incorporating energy efficiency standards; and military construction renewable energy initiatives. In addition, in April 2013, the Deputy Under Secretary of Defense (I&E) issued an updated policy on the metering of DOD facilities. In addition to increasing the amount of energy that must be captured on building?]level meters, the policy will help ensure that installed meters can automatically and securely deliver data to energy professionals in the field and at all levels of the Department. DOD has implemented our recommendation by developing a process to capture renewable energy projects and key information about these projects. These detailed listings are now provided in their Annual Energy Management Reports.

    Recommendation: To enhance DOD's ability to achieve the renewable energy goals consistent with the need to maximize cost-effectiveness, follow existing federal guidance, and increase oversight of DOD's renewable energy activities, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) in conjunction with the secretaries of the services to develop information systems or processes that will enable OSD to have visibility over DOD renewable energy projects, allow the services to monitor and coordinate the services' consumption of renewable energy, and guide DOD toward achievement of the renewable energy goals.

    Agency Affected: Department of Defense

 

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