Distributed-scale Renewable Energy Projects (Smaller than 10 MWs)
Learn more about project planning and implementation:
- Project Planning: Determining the Best Renewable Energy Project for Your Site
- Federal Renewable Energy Project Implementation: From RFP to Project Closeout
See more renewable energy training options.
Most Federal distributed-scale renewable energy projects (smaller than 10 MWs) can be broken down into nine steps. The first two fall within the planning phase, while the remaining seven are part of the implementation phase. Many steps will be familiar to energy/facility managers already versed in conventional energy projects.
Step 1: Facility/Energy Characteristics
Federal energy/facility managers interested in renewable energy projects should collect site data covering facility and energy characteristics. This data serves as the input for the analyses conducted in step two. The data collected in this step can also help determine which project financing mechanism to pursue. Data most often required includes site location, utility bills, land-use plans or facility master plans, and information on energy consuming systems and usage patterns. The level of detail collected increases as a project moves through the project process.
Step 2: Renewable Energy Studies
Multiple renewable energy studies can be undertaken in step two to determine potential opportunities.
Preliminary screenings can be undertaken using free Federal Energy Management Program (FEMP) screening tools and maps. An energy/facility manager can use these resources to decide whether a renewable energy project is worth exploring. At the headquarters or regional level, an agency can prescreen multiple sites to identify and prioritize locations for further study. Multi-site preliminary screenings are often based on maps of renewable energy resources, prevailing utility rates, and incentives.
A more detailed screening can help narrow site and project options after the preliminary screening. In this option, a renewable energy expert uses calculations or analysis software to identify the best opportunities. The detailed screening should recommend technologies to pursue, and can include a comparison of financing mechanisms to consider. Energy/facility managers can apply for a detailed screening through FEMP.
A feasibility study is often required for projects identified in preliminary and detailed screenings. Feasibility studies provide technology and financing recommendations an agency or site should pursue. If alternative financing is not pursued, then the feasibility study provides required information to request funding through the appropriations and budgeting process.
Feasibility studies typically require a site visit from a renewable energy expert. The expert conducts a detailed technical and economic study, including environmental and other constraints, for each opportunity. This study addresses all physical issues, including space for the systems, technical performance, interface with other existing systems, and anything that may impede project execution. At a minimum, economic feasibility is established by a detailed and credible life-cycle cost analysis according to Federal procedures (10 CFR 436).
Step 3: Requesting and Evaluating Proposals
After financing recommendations have been assessed, the energy/facility manager must prepare a request for proposal (RFP) for a competitive bid or skip to the next step if the contract will be purchased from an existing contract (e.g., ESPC, UESC, or PPA) or sole sourced. Funding must be available by this stage if using direct appropriations.
Step three is the stage to assemble an on-site team of key personnel, including but not limited to a contracting or procurement officer, a project manager, an attorney, an environmental officer, and a real estate officer. To prepare an RFP, the site must create a scope of work and selection criteria. After the RFP is issued, the site reviews and scores proposals according to the selection criteria.
Step three is perhaps the most important step. The success of a project is much more likely with a team capable of delivering a quality project and a strong scope of work. The scope of work must be complete to avoid change orders. Scopes of work without adequate instruction are prone to change orders and renegotiation that cost both the Federal Government and the supplier time and money. The scope of work must also include any and all details, such as coordination meetings and correspondence. If it is not in the scope of work, the offerors may not include it in their bids. Selection criteria often include capabilities and past performance. A track record and references of at least three successfully installed and operating projects is an excellent demonstration of past performance.
Step 4: Contracting
The Federal Government can award a procurement contract to the successful RFP bidder or to a pre-approved vendor through an existing or sole source contract. This contract establishes the cost, scope, and schedule of the project.
The RFP establishes the type of construction contract. Whether the Federal agency or an energy service company is contracting for construction, two basic construction contract types exist: Design-Bid-Build and Design-Build. In a Design-Bid-Build contracting arrangement, the system is designed by an engineering firm before construction companies bid on the installation. In a Design-Build contract, the same firm designs and installs the system.
With renewable energy projects, the project developer typical takes responsibility for determining the construction contract type. When the decision is made by a Federal agency, Design-Bid-Build contracts are typically chosen to allow design control. The second is selected when an agency is more concerned with performance.
Step 5: Design
In step five, the project developer begins with a schematic design (typically 35% of the design) that includes the size and type of the major system components. Most of the review effort for direct appropriation projects, which is the finance mechanism where design review most often occurs, is focused on the schematic design. Subsequent design phases (e.g., 50%, 75%, 95%) only develop the systems identified in the schematic design. Therefore, major changes after this early phase of design are unlikely to be considered. Step five ends when the final design is submitted.
Step 6: Construction/Build It
In step six, the project developer orders the equipment and begins construction or installation of the renewable energy system. Contract administration is required to enforce the terms of the contract. A construction manager is necessary to ensure that the various disciplines (e.g., roofers, plumbers, and electricians) are coordinated so that the different components work together as a system. Close coordination is also required with building occupants and management to minimize issues that could impact the facility's mission. Much of this is accomplished through frequent meetings between the construction manager and facility management and occupants.
Step 7: Acceptance Testing and Commissioning
With construction complete, it is important to commission the renewable energy system to ensure it works to specification. During the design phase, the commissioning agent should have documented the intent of the design and created the protocol by which the system performance will be evaluated and any required instrumentation. After the system is installed, the commissioning agent assesses the degree to which the system fulfills the intent of the design. Almost all large systems have at least some deficiencies that need to be corrected. In a performance contract, it is up to the developer to commission the renewable energy system.
Step 8: Performance Period
Step eight covers the period of time that the renewable energy system is in operation. It is important to take care of the renewable energy system through regular operations and maintenance (O&M), and to confirm that it is working according to specification and warranties through measurement and verification (M&V). In some alternatively financed projects, the contractor performs O&M. Every system should include at least some operational indicators so that staff can easily see if the system is working properly. Many agencies select an M&V protocol that provides enough information to determine how well the system is working, and in many cases to allow occupants and visitors to interpret the performance of the project.
Step 9: Project Closeout
When the performance contract ends, depending on the stipulations of the contract, the Federal Government may have the option to extend a performance contract, conduct a follow-on procurement, purchase the renewable energy system at fair market value (determined at time of sale), or abandon the renewable energy system in place. When the equipment is no longer functional, it must be disposed of. It can be replaced by a new renewable energy system or the space can be renovated for another application.