Navy awards $200 million for 40 MW of solar power on US bases

[wpsedgwick]

Source: Green Technology Daily

The U.S. Navy announced it has awarded a $200 million contract to construct up to 40 megawatts (MW) of solar photovoltaic power plants at Navy and Marine Corps facilities throughout the Southwestern United States.

The Navy chose five solar development companies to compete for individual projects, which will range from 1 to 15 MW. The five companies - SunEdison, AECOM Energy/Solar Power Partners Inc., SunPower Corporation, SunDurance Energy LLC, and Chevron Energy Solutions Company - will construct, own, operate, and maintain the systems, selling the power to the Navy and Marine Corps through power purchase agreements.



Read more: http://www.greentechnologydaily.com/solar-wind/662-navy-awards-200-million-for-40-mw-of-solar-power-on-us-bases

[420inTN]

1. Wait...

So, we are paying to build these facilities which will be owned by the energy companies.

We will then purchase the generated electricity from said energy companies.

So, this is a win/win for the energy companies, but what's in it for us taxpayers?

[sumus]

2. Alternative Power

I think they should be looking at wave power. More reliable power, and they don't ruin the view like windmills. http://www.oceanpowertechnologies.com/

[activa8tr]

3. That would be great for the Navy! n/t

[activa8tr]

4. I am wondering why they can't build the plants on their own and just

sell us the power.

[420inTN]

5. Yeah, that was pretty much my point.

Or, the Navy pays to build the plants. The Navy owns the plants, and the Navy contracts to the energy companies to staff and manage the plants, while keeping the electricity generated and selling the excess to the energy companies or the grid.

[bananas]

14. Do you know what a Power Purchase Agreement is?

It's just a promise from the Navy that they will buy the power from the company.
The Navy is just promising to buy that much electricity at that price.
The company takes that promise to a bank, the bank loans the money to build the plant, the company builds the plant using that loan, then it starts deliving power to the Navy, the Navy pays for the power as it is delivered, and the company pays off the loan to the bank.
Without the promise, the bank might not be willing to make the loan, because it couldn't be sure the Navy would buy the power - for example if the Navy decided to buy the power from somebody else.
http://en.wikipedia.org/wiki/Power_Purchase_Agreement

[JoeyTrib]

16. But what about the $200 million contract?

Tax money is going to these companies in addition to the power purchase agreement.

[bananas]

18. No, the Navy doesn't pay a dime until electricity is delivered

and then it only pays for the electricity it uses, as it uses it.
The PPA just says that the Navy will buy $200M worth of electricity over a number of years.
The Navy will be charged per kilowatt-hour as it uses the electricity,
and after many years the Navy will have paid out $200M for the electricity it used.
It's just an agreement that the company will supply the electricity and the Navy will buy the electricity.
The Navy will only pay for the electricity that it actually uses.
The Navy has estimated how much electricity it will need in the future,
this is just a legal agreement that the Navy will buy that much electricity from these companies in the future.
They do the same thing with other commodities, like toilet paper.
They estimate how much toilet paper they'll be using in the future,
and contract with a supplier to provide it.
The supplier can then get the financing to build and operate a toilet paper factory.
There's no reason for the Navy to build and operate toilet paper factories.
Snopes explains why it's so important for the Navy to have a reliable supply of toilet paper: http://www.snopes.com/language/document/skipjack.asp

[JoeyTrib]

19. Oh, Ok.

Thanks for explaining that.

[bananas]

15. No, the Navy is just promising that it will buy the electricity

It's just a promise from the Navy that they will buy the power from the company.
The Navy is just promising to buy that much electricity at that price.
The company takes that promise to a bank, the bank loans the money to build the plant, the company builds the plant using that loan, then it starts deliving power to the Navy, the Navy pays for the power as it is delivered, and the company pays off the loan to the bank.
Without the promise, the bank might not be willing to make the loan, because it couldn't be sure the Navy would buy the power - for example if the Navy decided to buy the power from somebody else.
http://en.wikipedia.org/wiki/Power_Purchase_Agreement

[jrt4]

6. how about ...

How about shaving a few tens of billions of dollars off of the defense budget, and putting that towards renewable energy?

[Dont_Bogart_the_Pretzel]

11. I like that idea

:thumbsup:

[Honeycombe8]

7. This sounds pretty "cool" to me. This may be the way that alternative energy

gets a big foothold in our country. When the military and other governmental entities start using massive amounts of it, it'll be in place for residential use.

Cool. Things are happening, I'm happy to see.

[420inTN]

8. What's cool about it?

Tax payers are funding this, and private companies are getting all of the benefits?

WE pay to build the plants which are GIVEN to the energy companies. WE then PAY the energy companies for the energy generated by the plants for which WE paid.

What is cool about this?

[tabasco]

9. My initial reaction is that's a lot of money for 40 MW.

But if it helps to get solar power a foot in the door, it's a good thing.

[FarCenter]

10. $5000 / kilowatt sounds pretty high

1 kilowatt = 1.34 horsepower

7 kilowatt generator at Home Depot for $1449 -- of course you have to pay for fuel. On the other hand, it produces power when it is dark or cloudy.

http://www.homedepot.com/Outdoors-Generators-Portable-Generators/h_d1/N-5yc1vZ1xgfZb8xq/R-100660521/h_d2/ProductDisplay?langId=-1&storeId=10051&catalogId=10053

[tabasco]

13. "of course you have to pay for fuel"

Well, yeah. And we're talking megawatts, not kilowatts.

A 40 MW wind project is being built near me, which is expected to cost $80 million.

[jpak]

17. New nuclear plants cost $6-8000 per kilowatt - not including O&M, fuel and spent fuel disposal costs

Solar is a bargain by comparison

[maxsolomon]

12. must be nice to be the US military

200 million = the entire budget of Hope VI program for redevelopment of distressed public housing for 2010.

remember, the US military is as big as the next 14 countries COMBINED.



http://www.warresisters.org/federalpiechartdetails

[TexasObserver]

20. Recommend