Constellation is in the running for up to $7 billion in federal contracts to install alternative energy technology in the U.S. Army, Navy and Air Force bases in this country and abroad.
The Baltimore-based regional energy provider, a subsidiary of Exelon, last month qualified to provide up to $4 billion in geothermal alternative systems. The company has submitted bids to qualify for the remaining, up to $3 billion, for solar, wind and biomass systems.
The Renewable and Alternative Energy Power Production contracts stem from a congressional mandate to reduce the U.S. military's reliance on fossil fuel. The goal is for U.S. Department of Defense installations to receive 25 percent production and consumption of energy from renewable sources by 2025. In 2012, the department reportedly spent more than $21 billion on conventional fuel contracts.
Constellation's executive director of the federal energy management programs John Dukes says geothermal was likely chosen as the first renewable to install because the technology can provide a reliable, steady source of energy for heating and cooling.
“The army strategically laid out geothermal as the biggest opportunity in compliance with their mission. It is starting with geothermal because that’s where they see the biggest bang for their bucks,” he says.
Dukes expects to hear by August whether Constellation qualifies for any or all of the other three renewables. He does not know how the up to $3 billion in contracts for solar, wind and biomass will be divided.
For the geothermal contracts, Constellation is one of five companies to qualify to bid on such contracts. The other companies are EEC Renewables LLC, California; Enel Green Power North America, Massachusetts; LTC Federal, Michigan; and Siemens Government Technologies, Virginia.
Within the next three to four months, the defense department will issue requests for proposals for possibly seven to nine projects within the U.S. and abroad. Dukes does not know if and when more geothermal contracts will be offered, although a meeting this week with army officials might answer that question.
The contracts will include power purchase agreements, meaning that the award-winning company builds and maintains the geothermal system at its own expense but has a guaranteed market for the energy produced. The government will buy the energy at a predetermined rate in long-term contracts that can run up to 30 years.
Geothermal uses the subsurface temperature to produce energy. There are different technologies and delivery systems depending on the location. Dukes says Constellation intends to bid on every geothermal contract although there is no guarantee that it will win any of them.
“It’s going to be highly competitive but we expect to be successful,” he says. “The awards will be based on the lowest price of electricity from the different geothermal technology.”
Source: John Dukes, Constellation
Writer: Barbara Pash