Energy as a Service: A Cost-Effective Path to Energy Resilience for Federal Agencies

August 7, 2019

Today, energy resilience, supply, management, and assurance are top concerns within the U.S. federal government, especially for the U.S. Department of Defense (DoD) and its military branches. Ensuring a continuity of operations amidst rising energy costs, compliance with government mandates, and the continual threat of cyber attacks, natural disasters and adversarial risks has become more and more challenging.  In addition, these agencies often deal with highly complex and sometimes outdated energy environments and aging systems and equipment.

Energy as a Service (EaaS) presents a new model of energy delivery and management to address these challenges. It provides a cost-effective path to energy resilience – a path that delivers significant energy, operations, and financial benefits. It’s a comprehensive and holistic service that manages everything from energy delivery and infrastructure to financing and ownership.

Navigant Research defines EaaS as “the management of one or more aspects of a customer’s energy portfolio – including strategy, program management, energy supply, energy use, and asset management – by applying new products, services, financing instruments, and technology solutions.”

As the term implies, an EaaS initiative allows federal agencies to purchase everything associated with the management of their energy needs as a service. Typically, this is through a contractual agreement paid for via an annual service fee and delivered from a single source that oversees all aspects of the engagement through service agreements with a consortium of one or more parties.

We’re already seeing this innovative concept in use and under consideration by the DoD as a way to help military installations more effectively and cost-efficiently fulfill their mission while minimizing energy-related security and operational risks.

For instance, the U.S. Air Force spends a significant $5.5 billion on energy annually to power its missions while attempting to achieve ambitious energy resilience and assurance goals. This DoD branch has started to explore how EaaS can optimize, and perhaps even reduce, its energy investment while achieving other benefits such as more efficient systems and modernized equipment.

EaaS delivers experts and expertise

Federal agency leaders recognize that energy management is a complicated task that is not a core competency and thus, too much time and effort directed towards it could compromise their missions. The ones that have considered or already implemented EaaS understand that this service can provide expert oversight that can help them holistically manage part – or all – of their energy portfolios. To do so, an EaaS initiative is set up to provide military bases with three core deliverables:

1. Energy delivery. When energy is delivered as a service, it can help installations obtain the energy they need to meet resilience, demand and assurance goals by consolidating energy delivery that is currently siloed into a holistically managed delivery model. Furthermore, to help achieve energy efficiency and conservation goals, an EaaS model combines traditional energy solutions with cost-effective and energy-saving microgrid controlled distributed energy resources (DER) such as solar, wind, and energy storage that are typically implemented on premise.

2. Energy infrastructures. EaaS also provides federal agencies with all the necessary systems and services for the development, operational management, and ongoing maintenance of new innovative high efficiency technology. In addition DERs and microgrids, EaaS can also include the technology and equipment that efficiently run electrical substations, switchgear, and data centers. It can also include the modernization of existing systems, as well as plans for future continuous improvement and ongoing security assurance. Plus, EaaS provides the technology and systems to support and validate cybersecurity, cyber survivability, and operational resilience requirements for all energy, technology, and operational systems throughout an installation. 

3. Financing and ownership options. Navigant Research notes that financing innovation is fundamental to EaaS as it enables new business models and the delivery of energy options that offer OPEX benefits and relieve CAPEX constraints. Therefore, key to this service are third-party financing and asset ownership options that alleviate the pressure on a federal agency’s energy-related expenditures, time, people, capital resources, and risk mitigation.

Download the white paper, Energy as a Service: A Cost-Effective Path to Energy Resilience for the Federal Government to learn more.

 

 

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