Pursuant to the renewable electricity requirement in Section 203 of the Energy Policy Act (EPAct) of 2005 (42 U.S.C. § 15852) as amended by The Energy Act of 2020, to the extent economically feasible and technically practicable, each fiscal year the Federal Government must consume at least 7.5 percent of its total electricity from renewable sources.
Renewable Energy Definition
As defined in 42 U.S.C. § 15852(b), renewable electricity is electric energy generated from solar, wind, biomass, landfill gas, ocean (including tidal, wave, current, and thermal), geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project. For hydroelectric, "new" means placed in service after Jan. 1, 1999, consistent with the definition of new hydroelectric generation capacity in section 2852 of the National Defense Authorization Act for Fiscal Year 2007 as amended by section 2842 of the National Defense Authorization Act for Fiscal Year 2010 (10 U.S.C. § 2911(e)).
Per the Energy Act of 2020 amendments to 42 U.S.C. § 15852 (c)(2) Separate Calculation, any energy consumption that is avoided through the use of geothermal energy, including geothermal heat pumps and direct use of geothermal energy, is considered produced renewable electricity for purposes of the goal. However, energy consumption avoided through the use of geothermal energy under this requirement shall not be considered energy efficiency for the purpose of compliance with Federal energy efficiency goals, targets and incentives. In practice this means geothermal energy can help agencies meet the renewable electricity requirement, but unlike other on-site renewable energy it is not treated as an ECM for purposes of meeting the energy intensity target under 42 U.S.C. § 8253(a).
Federal Renewable Energy: Resource Guide
This web-based resource guide provides Federal agencies with best practices and technical clarifications for meeting the renewable electricity requirement. This website provides information and key resources for Federal agencies to develop strategies for meeting the renewable electricity requirement.
This guide is organized based on the options that Federal agencies may use to develop a strategy to meet the renewable electricity requirement:
- Install on-site renewable electricity.
- Purchase renewable electricity.
- Purchase renewable energy certificates (RECs).
Federal agencies may use one or more of these options to develop strategies that enable on-site generation, enhance energy resilience of Federal facilities, and reduce cost.
Federal Renewable Energy: Agency Assistance
The following programs or offices can assist Federal agencies in meeting the renewable electricity requirement:
As part of their strategy to meet the Federal Government’s renewable electricity requirement, Federal agencies can install on-site renewable electricity generation at a Federal facility and consume the renewable electricity generated.
Benefits of On-Site Renewable Electricity
On-site renewable electricity provides a number of benefits to Federal agencies, including:
- Agencies are incentivized to implement on-site renewable energy generation through 42 U.S.C. § 15852(c) which enables agencies to receive "bonus" credit toward the renewable electricity requirement, equivalent to doubling the amount of renewable electricity consumed or purchased, if the electricity is: (1) produced and used on-site at a Federal facility; (2) or produced on Federal lands and used at a Federal facility; or (3) produced on Indian land and used at a Federal facility.
- On-site renewable electricity projects can reduce Federal agencies' utility and operating costs by generating electricity at a cost lower than utility grid purchases when considering the total life cycle cost of the project. For examples of cost-effective Federal renewable energy projects, see FEMP's Case Studies. To evaluate a site’s economic viability for an on-site renewable electricity project, see FEMP's Resources for Planning and Implementing Federal Distributed Energy Projects.
- Installing an on-site renewable electricity system can extend a site's survivability during grid outages by sustaining critical load, when paired with appropriate equipment and other technologies such as batteries. On-site renewable electricity has other resilience benefits such as reducing line loss inefficiencies. To learn more about achieving site resilience through on-site renewable electricity projects, see FEMP's Portfolio Resilience Planning and Implementation approach.
Procurement Options for On-Site Renewable Electricity
Federal agencies have multiple options to procure on-site renewable electricity. Federal agencies should consult with their contracting, legal, and/or acquisition staff to understand their agencies’ authority to procure on-site renewable electricity as well as the benefits and barriers to implementing an on-site project. Federal agencies should also understand the policies and incentives in the state where the Federal facility of interest is located. Lastly, Federal agencies should consider the source of funding for an on-site project and ownership structure.
For projects that are government-owned, Federal agencies may use:
An agency uses funds appropriated by Congress to implement a project through a request for proposal that is either a design-build or design-bid-build process. Life cycle cost of a project using appropriations is evaluated as per 10 CFR 436.
Energy Savings Performance Contracts (ESPCs)
A contract that provides for the performance of services for the design, acquisition, installation, testing, operation, and, where appropriate, maintenance and repair of an identified energy conservation measure or series of measures at one or more locations. The contract must meet the requirements in 42 U.S.C. § 8287, et seq.
An ESPC process that uses a set of pre-established procurement and technical tools to administer projects through the General Services Administration (GSA) Federal Supply Schedule 84, SIN 246-53.
Utility Energy Service Contracts (UESCs)
A limited-source contract between a Federal agency and serving utility for energy management services including energy and water efficiency improvements and demand-reduction services.
Privately Owned Projects
For projects that are privately owned, Federal agencies may use:
Power Purchase Agreements (PPAs)
A contract where a Federal agency buys power from a developer at a negotiated rate for a specified term without taking ownership of the system; the developer owns, builds, operates, and maintains the system.
ESPC Energy Sales Agreements (ESAs)
A project structure that uses the ESPC authority to implement distributed energy projects—referred to as an ESA energy conservation measure (ECM)—on Federal buildings or land where the ESA ECM is initially privately owned for tax incentive purposes, and the Federal agency purchases the electricity it produces with guaranteed cost savings. The Federal Government retains title to the ESA ECM by the end of the contract.
Enhanced Use Lease (EUL) or Real Property Arrangements
A contract with a private company that builds and owns a project on Federal buildings or land. Most or all of the electricity is sold by the private company to either the utility or another party. Typical real property instruments include leases, easements, and licenses. Some agencies have an EUL authority that could be used for a real property arrangement that involves the out-lease of underutilized property for a payment in cash or an in-kind consideration.
A second option Federal agencies can consider when developing a strategy to meet the Federal Government's renewable electricity requirement is to purchase renewable electricity off site, including from a utility provider or through a PPA. Electricity produced by a renewable electricity source placed into service within 15 years prior to the start of the reporting fiscal year may be counted toward the renewable electricity requirement.
- Competitive Renewable Electricity: In states with competitive electricity markets, Federal agencies can purchase renewable electricity through competitive electricity procurement or their default electricity provider.
- Off-Site Power Purchase Agreement (PPA): In restructured electricity markets, Federal agencies can contract directly with an off-site renewable generator. An off-site PPA is typically a long-term contract with the renewable generation located in the same power market as the purchaser.
- Regulated Utility Green Pricing Programs: In states with regulated electricity markets, green pricing is an optional utility service that allows customers to support a higher level of renewable energy than their standard electricity supply. Participating customers pay a premium on their utility bills to cover the incremental cost of the additional renewable energy, typically on a month-to-month basis.
- Regulated Utility Renewable Energy Tariffs: Renewable energy tariffs or "green tariffs" are programs offered by utilities in regulated electricity markets that allow customers to buy bundled renewable electricity from a specific renewable energy project through a special utility tariff rate, typically on a long-term basis.
Renewable electricity must be produced within a set period of time relevant to the fiscal year in order for it to count toward that fiscal year. That time period includes six months prior to the beginning of the fiscal year through three months after the end of the fiscal year. For example, in order for the renewable electricity (and associated RECs) to count in FY 2021 reporting, it must have been produced between April 1, 2020, and Jan. 1, 2022.
As a third option for meeting the Federal Government's renewable electricity requirement, Federal agencies may purchase RECs separately from their electricity, also known as unbundled RECs.
As with renewable energy purchases, RECs generated by facilities placed in service within 15 years prior to the start of the reporting fiscal year may be counted toward the renewable electricity requirement.
RECs must be produced within a set period of time relevant to the fiscal year in order for them to count toward that fiscal year. That time period includes six months prior to the beginning of the fiscal year through three months after the end of the fiscal year. For example, in order for RECs to count in FY 2021 reporting, they must have been produced between April 1, 2020, and Jan. 1, 2022.
Federal Renewable Energy Reporting and Data
Federal agencies report renewable energy data annually through FEMP in compliance with the Congressional reporting requirement at 42 U.S.C. § 15852(d). Agency performance relating to the renewable electricity requirement is publicly reported through the annual Office of Management and Budget (OMB) Scorecard.
To view and explore interactive graphs on annual Federal Government-wide progress and agency-specific progress on renewable electricity consumption, and access the annual OMB Scorecards, visit Sustainability.gov.
For more information about Federal reporting, renewable electricity, or other related topics, please contact FEMP through the FEMP Assistance Request Portal.