Energy Policies to Impact Defense Contractors.

• Author: Jones, Nick
• Position: NDIN Policy Points

* "Is it going to work?" my wife asked me when I went to plug in my electric vehicle for the first time. "Yes, of course it will work," I remember saying, only slightly masking my nervousness that by plugging my car into the wall some unforeseen damage might occur.

I plugged the car in and, of course, it worked fine. It was more than fine. A few years on, I've significantly reduced my transportation operating costs by nearly 80 percent, no one has questioned the economic logic of my car purchase, and my garage did not blow up.

President Joe Biden's "Executive Order on Tackling the Climate Crisis at Home and Abroad" put climate at the "center of United States foreign policy and national security" and aspires toward a "carbon pollution-free electricity sector no later than 2035." Facilitating the use of "clean and zero-emission vehicles" for government fleets is part of the executive order, and building the charging infrastructure will be a massive undertaking.

The impact on federal contractors will most likely be on how they get their energy supply.

In the executive order, the chair of the Council on Environmental Quality is instructed to "consider additional administrative steps and guidance to assist the Federal Acquisition Regulatory Council in developing regulatory amendments to promote increased contractor attention on reduced carbon emission."

Energy efficiency and sustainable supply chains are likely to be part of this effort. But the promotion of renewable energy usage will likely be one of the easier ways to achieve lower emissions.

A definition of renewable energy that is often referenced is "electric energy produced from solar, wind, biomass, landfill gas, geothermal, municipal solid waste, or new hydroelectric generation capacity," as outlined in 42 U.S.C [section] 15852(b).

So, what will defense companies, especially small ones, do if the government begins to promote contractor use of renewable energy?

There are many options. Smaller companies could participate in renewable energy programs offered by their electric utility or potentially purchase renewable energy certificates, also known as renewable energy credits. Bigger companies that have more resources and higher energy needs may install solar panels or engage in a power purchase agreement (PPA)--a contract where a company agrees to take energy supply directly from a particular power generation source.

Both options could make economic sense, especially if those are...