Submit your commercial solutions to solve national security challenges with the help from DIU.

Problem Statement

The U.S. Military’s ability to operate effectively in austere environments is directly tied to its logistical capabilities. These platforms currently rely upon carbon-based fuels, such as JP5, JP8, and diesel, which are sourced far from the point-of-use and contribute to greenhouse gas (GHG) emissions. While fossil fuels are energy-dense, the Department of Defense’s (DoD) reliance represents a vulnerability, especially for operations in remote or contested environments. The use of hydrogen (H2) as an alternate fuel source could partly mitigate these challenges. 

H2 is not a 1:1 replacement for carbon-based fuels; however, it can be generated at the point-of-need with greatly reduced thermal and acoustic signatures. H2 also has capability advantages over some current full electric power supplies in terms of energy density, duration of discharge, operation in extreme cold, and rapid recharging. Recent advances in H2 fuel cells and  H2 production have resulted in successful demonstrations of hybrid H2/electric power packs of unmanned vehicles. 

Proposed Solution

The DoD seeks to prototype an integrated electrolysis-based H2 production and storage system capable of producing and dispensing 1kg (threshold) / 3 kg (objective) of 350 bar (threshold) / 700 bar (objective) H2 in 24 hours. The palletized or trailer-based system should be tow compatible with the Joint Light Tactical Vehicle (JLTV) and/or the Ultra-Light Tactical Vehicle (ULTV). The system should be primarily powered by renewables with the option to use currently fielded tactical vehicles or generators, and have onboard monitoring/control systems to provide instrument status and alarm to end users. Stored H2 should be capable of delivery to systems or equipment at 350 bar (threshold) / 700 bar (objective) with an option of low-pressure delivery at 1 bar. The produced H2 should have a purity greater than or equal to 99.97% in compliance with ISO 14687:2019 (H2 fuel quality – Product specification). An ISO 15869:2009 compliant carbon-fiber certified (U.S. Department of Transportation) pressure vessel or other certified H2 storage method shall be used as the H2 storage component.

The government may accept teaming arrangements among submissions offering complimentary capabilities to achieve the desired effect. If appropriate, the government may request vendors to create integrated teams to combine solutions.

This is a prototyping effort utilizing or combining commercially available solutions to create a system for further testing and evaluation of this type of mobile H2 generation technology. 

Awarding Instrument

This Area of Interest solicitation will be awarded in accordance with the Commercial Solutions Opening (CSO) process detailed within W15QKN-21-X-0KXD (DIU CSO), posted to FBO in September 2021. Additionally, this document can be found within the DIU Library at www.diu.mil/library.

Follow-on Production

Companies are advised that any prototype Other Transaction (OT) agreement awarded in response to this Area of Interest may result in the award of a follow-on production contract or transaction without the use of further competitive procedures. The follow-on production contract or transaction will be available for use by one or more organizations in the Department of Defense and, as a result, the magnitude of the follow-on production contract or agreement could be significantly larger than that of the prototype OT. As such, any prototype OT will include the following statement relative to the potential for follow-on production: "In accordance with 10 U.S.C. 4022(f), and upon a determination that the prototype project for this transaction has been successfully completed, this competitively awarded prototype OTA may result in the award of a follow-on production contract or transaction without the use of competitive procedures.”

Problem Statement

Across the Department of Defense (DoD), military installations and facilities face a challenging landscape to more quickly and cost-effectively deploy resilient and renewable energy systems to enhance their efficiency. Historically, financial and technological processes employed to provide whole-installation solutions for energy availability and up-time requirements have resulted in project timelines that are unacceptably long with costs that are unacceptably high. One key to remedying these impediments is to shift the development, design and execution of solutions to third-parties with highly competitive costs of capital and expertise in this area.

Initially, the Department of the Air Force (DAF) seeks a large lead investor or investing syndicate to propose innovative business processes and energy solutions to meet the demand for on-base utility systems that are resilient, carbon free, efficient, and economical to enhance DAF installation energy resilience and our national security. The DAF requires an approach that can address these demands at an enterprise-scale, and moves at the speed of business, not government.

By attracting parties interested in conceiving and funding infrastructure projects capable of providing resilient energy solutions to DAF installations, solution providers should (a) reduce (or potentially eliminate) DAF’s up-front installation capital investment;, (b) minimize DAF’s cost over the life of the asset due to predictable financing, operation and maintenance expenses that are equal to or lower than their existing costs; and/or (c) enable partnerships with vetted developers to provide turn-key design, construction, operations, maintenance, and system ownership. 

Desired Solution Features

Under this prototype, the selected solutions provider(s) will develop a plan that includes a business model with resilient energy solution concepts, a financial pro forma, and the proposed rate, terms, and conditions for a long-term solution. The DAF prefers solutions that are owned and operated by the solution provider.

The DAF requires the solution provider optimize aspects of project development, construction, and management to achieve program goals and eliminate unnecessary costs through innovative (a) financing techniques and structures; and (b) technology employed to meet its objectives. Key attributes are rapid execution, low to no up-front cost, and minimized life of asset cost commensurate with the credit strength of the United States government.

Desired solution features include the following attributes and capabilities:

• A commercial business financing process which also encompasses all phases of the project, with (a) little or no up-front capital contribution by the U.S. government; (b) lower energy consumption and life cycle cost on a present value basis; and (c) turnkey design, permitting, construction, operation and maintenance.

• Compliance with federal mandates requiring all critical missions^[1] at DoD installations obtain at least 99.9% energy resilience as scored by the Resilient Energy Assessment Framework by 2030.

• Compliance with federal mandates requiring installations to increase their percentage use of Carbon Pollution-free Electricity (CFE), so that it constitutes 100% of facility electrical energy use on an annual basis and seek to match use on an hourly basis to achieve 50 percent 24/7 carbon pollution-free electricity, by fiscal year 2030^[2]

• Both technological solutions and commercial business finance processes shall demonstrate flexibility with respect to behind-the-meter, grid-connected, or mixed power generating projects.

• Solutions shall provide for rapid execution, long-term efficient cost of capital, and superior Levelized Cost of Energy (LCOE).

• Address mission and resilience gaps identified by DAF and provided to the solution provider at the onset of the prototype work.

• Resilient, best-in-class commercially available technologies, including but not limited to energy storage, carbon-free electricity generation assets, microgrid controls, load management and energy efficiency strategies, distribution infrastructure upgrades, and metering, provided such technologies can integrate with existing installation infrastructure in a cyber-secure manner.

Proposed solutions may include use cases, examples, and/or the following features:

• Solutions providers with experience deploying their own capital and/or raising capital for the development of large-scale energy related projects.

• Financiers that have relationships with developers with a track record of owning, operating, and maintaining large-scale energy resilience projects

• Financiers and solutions providers comfortable with accepting accountability for the resilience and energy outcomes.

A successful prototype must result in (a) the development of a future “finance-first” business model repeatable across the DAF and DoD; and (b) a technological solution at a DAF installation that will increase energy resilience and reduce energy costs. If the lead investor or investing syndicate (encompassing capital providers as well as system design and engineering entities to provide a turnkey and fully-financed solution) successfully completes a prototype that is acceptable to the government, the government may award a sole-source, follow-on production agreement to that investor or group. Under this follow-on agreement, construction of the resilient energy solution would commence. The solution provider will have the authority to manage project stakeholder relationships and define the project concepts. Ideally, the DAF will provide input only where inherently governmental decisions are required by law, such as environmental permitting and leasing.

Initial sites for consideration in the business plan and solution concepts could include, but not limited to, Joint Base Andrews and Arnold Air Force Base. While DAF anticipates implementing initial solutions within the continental United States, it would be advantageous for financiers to demonstrate an ability to deploy solutions internationally.

Awarding Instrument

This Area of Interest solicitation will be awarded in accordance with the Commercial Solutions Opening (CSO) process detailed within HQ0845-20-S-C001 (DIU CSO), posted to Sam.gov in March 2020.

Follow-on Production

Solution providers are advised that any prototype Other Transaction (OT) agreement awarded in response to this Area of Interest may result in the award of a follow-on production OT agreement or contract without the use of further competitive procedures.

"In accordance with 10 U.S.C. § 4022(f), and upon a determination that the prototype project, or portions thereof, for this transaction has been successfully completed, this competitively awarded prototype OT agreement may result in the award of a follow-on production OT agreement or contract without the use of competitive procedures.”

This Area of Interest (AoI) pertains to military installation resilience, which includes supply of utility commodities such as water, natural gas, fuel and electricity. The term “installation energy” which consists largely of energy sources used to heat, cool, and provide electrical power to facilities on Air Force installations, is distinct from “operational energy” defined as the energy required for training, moving, and sustaining military forces and weapons platforms for military operations. With regards to the utility commodity of energy, this AoI pertains only to installation energy and not operational energy.

Fully integrated solutions are preferred; however, the government will consider component proposals should the specific attributes of that component be compelling. In the event a respondent does not provide a turn-key solution (i.e., financing, design, construction, long-term operations and maintenance) the respondent can submit a solution for one particular capability.

^[1] Critical missions are typically a fraction of the total installation footprint.

^[2] CFE makeup can be from purchased or produced energy at or near the installation.