Sea Power - April 2015

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THE FLEET


gigawatt, or 1,000 megawatts, of renewable energy in var-
ious forms, and we are doing it all through public-private
partnerships. Some of the [partnerships] are utility com-
panies, while some of them are with renewable energy
project developers, and we are seeing some real progress.”
He said with private industry, DoN is entering into
energy savings performance contracts, utility energy
savings contracts, power purchase agreements and
enhanced use leases, where DoN can provide land on
installations that do not have any current or projected
need for the direct mission of the installation.
“[We] offer that up to a private sector contractor for
value-producing capability and get the shared value
from that contract,” McGinn said.
From a programmatic perspective, REPO is, to date,
committed to scores of projects across the nation and
at installations around the world in order to fulfill
Mabus’ goals and priorities for renewable energy. Using
a variety of models for producing or procuring renew-
able energy, the program office, by virtue of changing
the energy landscape and culture within DoN, has
exhibited the importance and utility of P3s.
“I think the greatest rate of growth [with P3s] is in
our area, energy, installations and the environments,”
McGinn said. “This happens in the context of tight
defense budgets, so to the extent that we get benefit for
the Department of the Navy through P3, that is money
we don’t have to be going after in normal budgeting
and programming.”
Among the numerous projects REPO has undertaken
over the last nine months, McGinn discussed DoN’s mid-
February announcement of a lease with Charlotte, N.C.-
based Duke Energy that will allow the development of a
large-scale, ground-mounted solar array at Marine Corps
Base Camp Lejeune, N.C. The lease grants Duke Energy
access to 80.65 acres of land at Camp Lejeune to develop
a solar photovoltaic array power facility.
The project, slated for completion late this year,
would provide up to 17 megawatts of direct current for
the local community and a potential redundant power
source for Camp Lejeune. McGinn said the arrange-
ment falls under the model within the P3 construct of
using an enhanced use lease.
“The power that is generated from those photovoltaic
arrays is actually going to be exported to the whole cus-
tomer base of Duke Energy. [However], if there is a wide-
spread grid outage, part of the contract is that the energy,
or as much of that energy [that] is needed, will be used
by Camp Lejeune,” he said. “So one of the benefits of this
contract is that it takes a first step at enhancing the ener-
gy security of Camp Lejeune using renewable energy.
But, in the meantime, Duke benefits and the customers
benefit from having that additional power that is going
into the grid from this enhanced-use lease.”


McGinn said a key to the department’s focus and
success in setting the standard for major P3 initiatives,
like the Navy’s energy program, has been the nature of
the collaboration between government and industry.
“One of the things that is important is one of the Ps in
[P3], which is partnership,” he said. “Partnership in this
sense is shared risk, shared reward — understanding each
other’s requirements and capabilities — and moving for-
ward deliberately and rather quickly, not so quickly that
you make mistakes or get it wrong, but not wasting any
time in redundant or bureaucratic processes, because in
the private sector, time is money.”
McGinn said deal structure also is important in
terms of understanding where the money is going to be
coming from, and the funding terms of a project,
which also helps manage expectations and establish
project baselines.
“What is the cost of that money in terms of percent-
age points? What is the payback? What are reasonable
expectations of being able to make that payback based
on savings?” McGinn said. “Baselining correctly, using
good business cases from other similar types of proj-
ects and giving the contractors enough flexibility to
tell us what they think their best systems engineering
approach is rather than our over specifying it.”
Austen Givens, co-author of the book “The Business
of Counterterrorism, Public-Private Partnerships and
Homeland Security,” concurs with McGinn about the
nature of P3s. He believes that the definition of a public-
private partnership includes the contractual relation-
ships, as well as a level of cooperation and understand-
ing not outlined in a contract.

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The Department of the Navy announced in mid-February a
lease with Charlotte, N.C.-based Duke Energy that will allow
the development of a ground-mounted solar array at Marine
Corps Base Camp Lejeune, N.C., as part of a public-private
partnership agreement. Several 1.2 megawatt, photovoltaic
arrays are shown here aboard the Marine Air Ground
Combat Center at Twentynine Palms, Calif. These solar pan-
els collect energy that is stored in a battery storage system.

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