2017 Defense Energy Funding for Energy Resiliency and Infrastructure

On Jan. 18, 2017, the Senate Armed Services Committee cleared Retired General James Mattis for an immediate confirmation vote shortly after Trump’s swearing-in. For industry, this begs the question: What does this mean for my company? As discussed in our previous blogs, we believe that Secretary Mattis will be immensely beneficial for the renewable and innovative energy technology sectors; indeed, all of Mattis’ actions and comments since our original analysis have reinforced this perspective. While we don’t have clarity on positions of key personnel and new direction on existing programs, the 2017 National Defense Authorization Act (NDAA) includes an unprecedented number of provisions that are likely to accelerate efforts to upgrade and modernize critical energy systems in a way that will enhance security, harden infrastructure, and diversify supply.

Energy Resiliency and Infrastructure Provisions

At well over 1,000 pages, the 2017 NDAA includes a dizzying array of military authorizations and provisions. Here are some highlights regarding energy resiliency and infrastructure:

• $150,000,000 has been authorized for energy conservation projects at over 18 domestic and international military installations. Furthermore, Congress specifically expanded the energy conservation construction program to incorporate energy resiliency and security measures.
• Over $300,000,000 has been authorized for the research, development, testing, and evaluation of innovative energy solutions across military services, with the bulk of the funding going to specific Navy R&D energy programs.
• Over $900,000,000 in energy resiliency and infrastructure construction projects has been authorized across military services including microgrids, transmission and distribution upgrades, and other utility infrastructure investments.
• Congress also offered its perspective on funding decisions related to climate change. Without directly negating the importance of climate change, Congress directed the Defense Department to prioritize combat readiness and national security ahead of seeking energy efficiency and efficacy, while implicitly acknowledging that these are intrinsically connected.

Conclusion

Ultimately, we believe that these energy resiliency and infrastructure provisions are not about quantifying energy security per se, but instead aim to close the current gap in energy security projects that would make them third party financeable. By doing so, Congress can enable critical infrastructure improvements without significant appropriations or spending of political capital. As the 2017 NDAA became law on December 23, 2016, these opportunities provide an unprecedented opportunity that is already underway for innovative energy companies that are seeking to expand their business in the federal market.