In 2013, the Department of Defense (DoD) used 0.75 quadrillion British thermal units (Btu) of energy. That accounted for 78% of all energy use by the federal government. To put that number in perspective, the average US home in 2009 consumed 90 million BTUs. So the DoD’s energy use was equivalent to more than 8.3 million households. And while that may seem enormous, the Dod’s energy use has actually dropped by 55% since 1975, the earliest available data from the U.S. Department of Energy’s Federal Energy Management Program (FEMP). This is due to massive improvements in available technology but also to a sustained effort from the DoD to consciously reduce energy usage.
The 2014 Quadrennial Defense Review explicitly references the reality of climate change, “average global temperatures are increasing and severe weather patterns are accelerating.” It goes on to enumerate the many ways that our changing climate will negatively affect our national defense needs. The DoD’s own reporting and scholarship on this topic, combined with active support from the White House, has made it the leader among federal agencies for reducing energy use and bringing on renewable solutions.
This effort includes massive clean energy purchases. For example, in September 2015, the Washington Post reported that a Navy base in Kings Bay, Ga is installing 136,000 solar panels—covering 280 football fields. “The Pentagon said it is seeking to generate its own power in part to enhance energy security at a time when traditional electric grids are under the threat of cyberattacks. But because of their sheer size, the projects are unavoidably affecting energy markets elsewhere in the country, driving down costs for renewables and dampening the demand for new power plants that burn natural gas or coal.”
The innovation required to shift such a massive energy user towards renewables means that DoD will have to engage more and more with cleantech startups.
Below are 4 of the most promising new clean energy technology companies that are working with the Department of Defense to grow their businesses.
FirstFuel Software is based in Lexington, Mass, where it has helped identify approximately $4 billion in potential energy savings through remote assessments and analytics of more than 100 buildings. Dr. James Galvin a Program Manager in Energy and Water at ESTCP, Department of Defense notes that “FirstFuel’s unique approach to data analysis enabled us to save significant time and money, while yielding the same – if not better – results than traditional onsite audits.”
CET portfolio company Go Electric, is a prime example of the value startups can bring to the military. Go Electric provides uninterruptible power from micro-grids and that got the attention of military bases in Hawaii. This is part of a broader DoD partnership with Energy Excelerator “to support innovative energy technologies that could give it [DoD] a strategic advantage while saving on energy costs”
Sweetwater Energy used initial “revenues from Department of Defense research sales to produce jet fuel for the U.S. military.” This gave them the financial flexibility as well as a positive stamp of approval to go on to open future commercial plants. This early success turned into a $16 million dollar Series A and in 2015 signed a lease in Minnesota on a new $53 million plant.
Another CET portfolio company, NuMat Technologies has also used military contracts to grow it’s business. In August 2015, NuMat announced “a new contract to support the production of next-generation filtration and catalysis materials” with the Department of Defense.
What is next?
Despite the success of the companies above, the military can often be a challenging space for startups to work. Slow sales cycles and a large bureaucracy makes the relationship difficult. But if the DoD can improve these relationships there is tremendous potential for the military to be an initial customer and research collaborators for innovative cleantech startups.
The Small Business Innovation Research (SBIR) program Phase III is a perfect example of how DoD can provide a lot of value to startups. Where Phases I and II of the SBIR program focus on technical validation and R&D, Phase III focuses on commercialization where government agencies step in and become customers.Annually, the DoD SBIR budget represents more than $1 billion in research funds. To learn more about the DoD and SBIR program, click here.
The DoD is helping lead government toward sustainability. To do so it will need to lean heavily on its partnerships with innovators in cleantech.
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