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Is Renewable Energy Required for your Next Federal Project?
Implementation of renewable and alternative energy has long been encouraged for federal agencies through policies, guidance documents, and government mandates. Rapid changes in technology, uncertain budgets, and a changing political climate have many of us in the business of design and construction wondering what’s required for new projects and significant renovations. Below is a brief snapshot of where things stand in early 2018 related to the implementation of renewable energy systems for new construction or major renovation projects at federal agencies. The discussion is broken into the specific mandates and standards that govern projects for federal agencies.
General – Is it Life-Cycle Cost (LCC) Effective?
Many of the references discussed in this post include the phrase, “where life cycle cost effective” or something similar. NIST 135 (referenced through 10-CFR 436) provides the rules necessary for LCC evaluation including guidance on the analysis period and factors required for discount rates and other factors.
Anyone evaluating these systems must realize the importance of using current first-cost data when evaluating these systems as prices are falling rapidly. (Even year-old prices are out of date.) It’s also necessary to know that the bulk of PV system components will last at least 25 years although gradual module output degradation must be included.
For federal projects procured directly by the government, tax-based incentives like production credits and accelerated depreciation can’t be applied, thus raising the bar for economic viability. Even so, solar PV can prove life-cycle cost effective without incentives anywhere power is above about $0.13/kWh and this breakpoint continues to decrease.
Depending on the criticality of the project, it is also important to explore other factors like mission assurance and resilience, and potentially incentives from local utilities.
The Energy Policy Act (EPAct) of 2005 – All Agencies
This act accelerated the push for the federal government to its energy use and expenditures. In addition to requiring incremental reductions in energy and water consumption for existing building stocks, it also put forth renewable energy targets for federal agencies. We’ve now passed the sunset date for some of these targets which necessitated more recent mandates like E.O. 13693 (below), but EPAct 2005 is still in effect. As it sought to encourage the implementation of on-site renewable energy in lieu of simply buying credits from remote installations, it allows the energy produced on site from renewable systems to be counted as DOUBLE toward the agency’s goals in meeting these targets.
Executive Order 13693 – All Agencies
This order, issued in 2015 and still in effect at the time of this writing requires federal agencies to, where life cycle effective, ensure the following percentages of total electrical energy are met by renewable energy for each fiscal year.
Note the word agency is important here. The targets apply to an agency’s entire real property inventory which can be quite extensive. It does not mandate these specific percentages for each building. It follows, though, that new projects should strive to meet or exceed these percentages so they don’t put the agency’s entire portfolio further in the renewable energy hole. This is the reason why some federal RFPs and design standards we’ve seen require these percentages for each new project.
Also, and very important to note, in accordance with provisions of the Energy Policy Act (EPAct) of 2005 as discussed above, energy produced on site by renewable systems may be counted as DOUBLE toward the agency’s goals in meeting these targets.
UFC-1-200-2 and ASHRAE 189.1
The Department of Defense’s Unified Facility Criteria 1-200-2 High Performance and Sustainable Buildings Requirements requires the implementation of renewable energy by referencing ASHRAE 189.1 2014 – Standard for the Design of Hih-Performance Green Buildings. In this, buildings must include at least a modest amount of renewable energy systems (either PV or solar thermal) based on their floor space. (In the case of high-rises, the minimum quantity is based on available roof area.) IF, however, renewable energy is shown to not be LCC effective (an analysis is required), provisions for a future system must be made. This includes space provisions for PV or solar thermal as well as the necessary infrastructure.
2016 Guiding Principles for High-Performance and Sustainable Buildings – All Agencies
This document requires designers to: evaluate and implement, where appropriate, life cycle cost-effective renewable energy projects on-site. It suggests considering long-term off-site renewable sources and Renewable Energy Certificates (RECs) and utilizing clean and alternative energy where possible. Again life-cycle cost effective is important as discussed above. It then invokes UFC 1-200-02 (discussed above).
Deartment of the Army Sustainable Design and Development Policy Update, January 17, 2017)
Importantly, these principles require renewable energy systems (if installed) to be able to operate independently of normal power AND have the ability to divert the power to critical loads. Most PV systems are grid connected and therefore do not provide power when grid power is lost because their inverters need a frequency input from the grid. Additional controllers are required to manage the interaction of solar arrays and on-site diesel generators. Additionally, the ability to manage non-critical loads also necessitates additional hardware and controls. It’s debatable whether all of these additional control costs should be born entirely by the renewable energy system being analyzed since the final system will provide significant benefits to mission readiness and resilience. Arguably, this is the beginning a microgrid. As designers we need to be able to communicate this to project owners very early in the design process.
(Referenced in 10CFR 433 and a variety of other standards and rating systems)
Most federal new construction projects we design are required to improve upon ASHRAE 90.1-2013 by 30%. (some say, if Life Cycle Cost Effective, but this exception often is excluded from project-specific requirements.) Additionally if working on design build project proposal, it’s difficult to say that our team will not be meeting 30% reduction.
As baseline energy performance requirements continue to strengthen with each three-year cycle of Standard 90.1, solar PV might be necessary for some projects to meet minimum energy performance prerequisites.
This may be even applicable for project with aggressive amounts of glazing and/or on large projects that cannot accommodate a water-cooled chiller plant but are required to baseline performance against one.
As costs of renewable energy systems continues to decline, the incremental cost of PV relative to other energy efficiency measures may be more attractive.
Requires compliance with E.O. 13693, EPAct 2005, EISA 2007, and Guiding Principles for Sustainable Federal Buildings-2016. Note new construction projects also appear to require LEED v4 GOLD certification. This can be difficult. (See notes below related to LEED.)
The LEED Green Building Rating System has never required renewable energy for projects. It does, however, provide hefty point incentives for their use. The ratings systems have specific credits for varying levels of energy COST reductions resulting from renewable energy. (Up to 5 points in v4 BD+C if the exemplary performance threshold is met and renewable energy is a regional priority credit.) The BD+C standard also allows the energy production from the renewable systems to be subtracted from the energy costs when calculating points for Optimizing Energy Performance. This double-dipping makes a huge difference. All told, a PV system that offsets 15% of a building’s energy usage could directly contribute to 8-9 LEED points.
So…Do I have to Include Renewable Energy?
At a minimum, designers of new or renovated federal facilities are required to provide an honest and detailed life-cycle cost analysis. Fortunately, this is a relatively quick exercise.
Even if renewable energy is not economically viable for a location it will likely be so in the near future. Designers should work with owners to identify space for future systems and design building systems to accommodate future connections.
Frequently, we are engaged in projects where renewable energy would be viable, but the project has no money available for implementation. Our options are limited in this case, but we must inform our clients and at least work to accommodate the systems in the future. To avoid these situations as we move forward, we must work with our clients at the very earliest stages of project development to ensure that the project estimates include funds for renewable energy. This is best accomplished when preparing RFPs. Since the viability of renewable energy is largely location specific and doesn’t depend significantly on the actual building, designers will have a good idea of how the systems will perform. Asking a contractor to evaluate the economic performance of renewable energy systems and install as necessary will almost certainly not provide desired results.
As designers, we should also inform our clients of the other benefits of these systems. (Enhanced resilience, assistance with other energy and sustainability goals, etc.) Emerging DoD policies are allowing resiliency and reduced cost of backup generation to be considered for analysis. (10-USC 2911)
Even in cases where energy is relatively inexpensive, there are numerous benefits in installing renwable energy in projects where there are good resources available – particularly where the local grid power is generated by carbon-intensive fossil fuel. After basic energy efficiency, solar and wind energy are the most effective ways to reduce harmful greenhouse gas emissions.
 Renewable energy may be thought of as a subset of alternative energy. The broader category includes recovered heat from power production, other thermal energy, and modular nuclear reactors.
 Yes, the actual value depends on a number of factors that might not apply for all locations and clients.
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