The Air Force is seeking creative business solutions to its energy needs. Officials now are sifting through input from a fall request for information, and say they anticipate issuing a formal solicitation in mid-2018.
The service is looking at the migration of computing to the cloud as a possible model for how it might buy energy for its many installations. Just as software and apps today are provided “as a service,” they’re exploring whether energy could be managed more cost-effectively under a similar model.
“I am not going to pay you for power; I am not going to pay you for light bulbs and light fixtures,” said Mark Correll, the Air Force’s deputy assistant secretary for environment, safety and infrastructure. “I want light and heat and the ability to project the force. That’s what I want done. Give me that, and tell me how you are going to do that.”
Today, energy is a bit of a hodgepodge on Air Force installations. Power companies may generate the energy and deliver it to the door, but bases also operate their own secondary infrastructure to transport and deliver power as needed. An Energy-as-a-Service, or EaaS, model could streamline and simplify the process.
How the Air Force buys its energy could have a profound impact on C4ISR needs.
“The Air Force has refocused its attention on mission assurance, including C4ISR, and one of the things that underpins our efforts is about energy resilience,” Correll said.
“Every time I have to integrate the energy generation with the transmission with the energy savings mission, each one of those is a potential area for breakdown,” he said. “If a single organization is doing all those things, then the opportunity for failure goes down. That means increased reliability and increased resilience for missions such as C4ISR, which has a lot of energy dependence.”
The Air Force is not alone if seeking a new business model for energy generation and delivery. Analysts as Navigant Research for example predict the market for EaaS could top $221.1 billion by 2026.
“While in its early stages, the EaaS market consists of third-party vendors, utility services companies, and potential business model disruptors,” Navigant notes. “As the EaaS market matures, it is expected to give rise to the outsourcing of energy portfolios and turnkey vendors equipped with a comprehensive set of technical, financing and deployment model options.”
It’s not clear how exactly an EaaS model would play out on a military installation, with many details around the concept still to be worked out.
“Who is going to own the infrastructure? Does that go to the contractor, or do we retain infrastructure ownership?” Correll said. “How would we award a contract like this? What would be the mechanisms we would use?”
At the same time, an EaaS model might raise security concerns. If the service were to turn over energy management to a contractor, it would need to be thoughtful about the limits of that provider’s authority.
“The Department of Defense will continue to exercise control over what is or is not okay in the installation, but we will have someone else providing that,” Correll said. “How is that going to work? These are questions we will have to address.”
The present model around energy seems to put the Air Force at odds with its providers. A utility company, after all, is motivated to sell as much power as possible and at the highest possible price. Air Force mitigates this somewhat by handling the distribution of power through its own infrastructure on its installations, but this is an imperfect solution.
“We buy it, we install, it we maintain it and we want to do that as reliably as we can, as cheaply as we can. But that’s not a core competency of the Department of Defense,” Correll said. “That forces us to put a great deal of time and effort and people into integrating all these things. That is money that could be spent somewhere else.”