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10 NAREIM FUTURE Depart of Defense (DoD) Leading By Example If our Federal Government were a corporation, given the size and scope of its operations, it would be the biggest business in the United States. The DoD alone has over 500 major installations around the world and manages more than 500,000 buildings with over 2.2 billion square feet. That is over three times the square footage Wal-Mart currently operates. Energy touches every part of the military's mission, and domestically it must ensure energy security and reliability to fulfill that mission. For example, drone flights over the middle east piloted out of Air Force hangars in Nevada, vital communications systems supporting Naval fleets in the Pacific, or cyber security operations all need to be able to operate regardless of how the local grid is up and running. The military facility energy budget alone is $4 billion, just to keep the lights on. As such, to better manage costs and ability to always meet its mission, the DoD has been strategically evaluating strategies to fundamentally reduce its energy footprint. For the military, having such a large installation footprint can be a challenge, but it can also be an incredible opportunity. These installations display many of the same characteristics as a university campus or small city or town with residential, industrial, and business sections that all require different levels of energy demand. The military asked for a study of the energy production capability on its bases by the Department of Energy's Pacific Northwest Laboratory which estimated that 90 percent of the critical power needs could actually be met by renewable energy resources To tackle these challenges, the military is turning more and more toward renewable energy. For instance, each of the branches (Army, Navy and Air Force) have been pursuing a 1 GW renewable energy goal, and the Navy met theirs years ahead of schedule. They are also looking to drive efficiency and sustainability within their buildings. This is an area where the military is learning from the innovations within industry and using systems such as the US Green Building Council's Leadership in Energy and Environmental Design (LEED) standards to design and certify more sustainable buildings. They are relying on a variety of solutions that look similar to what is happening in the commercial and industrial real estate market. This includes distributed generation solutions like rooftop solar arrays, microgrids, onsite storage, but they are also executing long term power purchase agreements. One key development over the last few years is the emphasis in using third party financing to fund these initiatives. Congress provided the DoD with a variety of authorizations to utilize alternative financing by allowing the private sector to invest in military bases to own and operate projects. This allows the DoD to reap the benefits of project ownership without needing to overcome the sometimes impossible hurdle to provide the upfront capital required for construction.