Assistant Secretary of the Navy (Energy, Installations & Environment) 1 Department of the Navy Renewable Energy Program Office (REPO) Overview Monica DeAngelo Director, Facilities and Renewable Energy Program Integration Energy Exchange Conference Panel: Renewables Through Private Financing August 2015

Assistant Secretary of the Navy (Energy, Installations & Environment) 2 DON Renewable Energy Priorities Produce/Procure 1 GW of renewable energy 500 MW in Procurement by 31 Dec MW in Procurement by 31 Dec 2015 Provide a roadmap to integrate renewable energy into the installation electrical grid Projects Will Improve Energy Security across DON Installations

Assistant Secretary of the Navy (Energy, Installations & Environment) REPO Project Development Models 3 Different Development Models Accommodate Diverse Requirements and Market Conditions Model 1 Model 2 Model 3 Off-base Generation for On-base Consumption (Acquisition: USC/PPA) On-base Generation for Off-base Consumption (Real Estate: Outgrant) On-base Generation for On-base Consumption (Acquisition: PPA)

Assistant Secretary of the Navy (Energy, Installations & Environment) Requirements Generation Process 4 Details Load & Resource Analysis (LRA) Market Analysis Business Case Analysis (BCA) Request for Proposal (RFP)

Assistant Secretary of the Navy (Energy, Installations & Environment) Analysis of Current Electricity Bills x = Transmission Distribution $0.047/kWh + $0.000/kWh $0.00/kWh $0.003/kWh $0.018/kWh Other Market Charges Grid Market Price $0.007/kWh State, market, ancillary service fees $0.002/kWh Capacity Charge ESP Charge RPS Compliance (State-specific)

Assistant Secretary of the Navy (Energy, Installations & Environment) 6 Analytic Approach ›Use LRA’s historical load data and market research to forecast expected costs of conventional energy compared to green energy ›Calculate if the net present value (NPV) of green energy is positive and therefore reduces DON energy costs ›Conduct sensitivity analyses to validate conclusions Schematic of Power Cost Comparison Comparative Analysis of Conventional and Renewable Energy

Assistant Secretary of the Navy (Energy, Installations & Environment) 7 Green Energy Net Benefit Determination 7 Net Present Value (NPV) Calculation ›The LRA tool uses model assumptions and historical load to forecast future energy purchases and costs under grid energy and renewable energy scenarios ›The tool calculates the NPV of savings that DON would realize with a renewable energy procurement compared to purchasing grid energy. The present value of future cash flows is discounted by 3.1% annually (per OMB Circular A-94), to calculate the total value of savings in 2014 dollars ›DON will only consider procurements that result in project cost neutrality or savings over the term of the contract ›Sensitivity analysis analyzes a range of inputs by varying model assumptions – including escalation rates and renewable PPA prices – to validate expected project savings Grid Energy Total Electricity Costs Grid Energy Total Electricity Costs Renewable Energy Total Electricity Costs Renewable Energy Total Electricity Costs Renewable Procurement Total Savings Renewable Procurement Total Savings - - = =

Assistant Secretary of the Navy (Energy, Installations & Environment) 8 Business Case Analysis (BCA) Example: Electricity Reliability Council of Texas (ERCOT) Green Power CostGrid Power CostDON Savings Annual Grid and Green Power Costs Annual Energy Cost ($) Redacted to Protect Source Selection Sensitivity

Assistant Secretary of the Navy (Energy, Installations & Environment) 9 Model 1 Project Opportunities (as of June 2015) Guam 10 MW DVP 30 MW ERCOT 58 MW PJM up to 205 MW *Project size are estimates that are subject to change. DON RE Online CY14 90 MW CAISO up to 210 MW Pax River & Indian Head 30 MW REPO Project Opportunities USN Installations USMC Installations Model 1 Opportunities Italy 10 MW

Assistant Secretary of the Navy (Energy, Installations & Environment) 10 Model 3 Project Opportunities (as of June 2015) HI 15 MW REPO Project Opportunities USN Installations USMC Installations *Project size are estimates that are subject to change. DON RE Online CY14 90 MW NS Newport 13 MW JBAB 6 MW Model 3 Opportunities ESPC Opportunities GITMO 10 MW Diego Garcia 10 MW

Assistant Secretary of the Navy (Energy, Installations & Environment) (202) Questions?