Renewable Energy Projects May Get Boost From Well-Heeled Private Sector Partners
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Large energy projects can be politically and financially challenging for public officials. But seeking out cross-sector collaborations can be the best and quickest way to make sustainable energy happen.
AUSTIN, Texas — Getting renewable energy plans off the drawing board and onto a power grid is a difficult task. But, it’s a task public officials are being urged to take. As world leaders gathered recently in Paris at a climate change conference, technology entrepreneurs Bill Gates and Mark Zuckerberg announced the formation of what is being called the Breakthrough Energy Coalition. This high-powered group plans to leverage its combined financial resources to partner with government to ensure that sustainable energy becomes a reality. The size and scale of the coalition is unprecedented and, in the past there has not been a more aggressive approach to public-private partnerships (P3s) related to energy projects.
Large energy projects can be politically and financially challenging for public officials. The projects all too often wind up at the bottom of a funding priorities list. Without power shortages or an environmental crisis, it is simply too easy for public officials to find more immediate needs for funding. Eventually, however, public officials must seek out sustainable energy options. Collaborations between different sectors of government and private partners are often the best and quickest way to make sustainable energy happen.
State leaders in Nebraska are working to build some momentum with new legislation that would provide $4 million in funding for local entities to jump-start solar power initiatives. Although small, the $150,000 grants combined with the decreasing cost of solar infrastructure might provide a push to get more renewable energy plans off the ground. These grants come on the heels of record numbers of power customers signing up to produce their own solar power, according to the Nebraska Power Review Board. The Nebraska bill is currently pending in committee.
As public-private partnerships become more common, renewable energy projects will likely be good candidates for broader private collaboration. There is no doubt that governmental agencies need private capital and expertise, and the question of why public officials have been so slow to launch P3s is often asked. There appear to be many reasons, not the least of which is that most public officials are not particularly comfortable negotiating long-term contracts with private-sector partners on large public projects. It is new territory for them and change happens slowly in governmental environments. That is truly disappointing to advocates of P3s.
Other obstacles that tend to slow collaboration on large P3 projects:
- Numerous stakeholders are involved - private firms, public officials, environmental groups and local landowners – and they all have unique concerns. Managing all of the expectations is a difficult task.
- P3s involve extremely long-term relationships. Contracts should be carefully negotiated and must contain language that outlines benchmarks for success and succession agreements.
- Transparency is critically important. Citizens and taxpayers should be able to watch any large public project and gauge its success.
And, while things are moving slowly, there is engagement in some parts of the country. A number of P3 wind projects are currently in the planning stages. In Arizona, a 500-megawatt Mohave Wind Farm will place up to 243 turbines on land near Kingman owned by the U.S. Department of the Interior. The $800 million dollar project was announced in 2013 and is expected to come online with power for 175,000 homes by 2020.
In Texas, military officers and public officials broke ground on a $100 million renewable energy project at Fort Hood last month. The public-private partnership will provide more than 40 percent of the power for the base and is expected to save millions in energy costs over the next 30 years. Off-site wind turbines located in West Texas and 138 acres of solar panels make good use of the abundant sun and wind in this state. Private partners contributed financing and expertise that led to this “first step” in establishing energy independence for the base.
Hats off to these public entities for their visionary action! Renewable energy is critical for the future and there is little time to waste.
Mary Scott Nabers is president and CEO of Austin-based Strategic Partnerships Inc., a business development company specializing in government contracting and procurement consulting throughout the U.S.
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