Attachment 2- MFT 24-48 Questions and Answers Updated 10.25.docx

OTA - Geothermal for Elecricity and Green Hydrogen Production, Travis AFB, CA

MFT 24-48

Questions and Answers

1. What is the scale of the project? ( > 5 MW)?

The problem statement only asks the vendor to consider providing case studies/examples of geothermal projects that produce at least 5 megawatts of electricity.

If a vendor’s video submission is deemed “awardable,” the vendor will have the ability to explore potential project concepts of different sizes with the Department of the Air Force, Department of the Army, and Department of the Navy at various installations worldwide.

1. Is there a pilot project site already identified? If so, where is it?

Is the geothermal facility can only be built at Travis AFB, CA? Or can it be built at other air force base in the US as well?

If a vendor’s video submission is deemed “awardable,” the vendor will have the ability to explore potential project concepts with the Department of the Air Force, Department of the Army, and Department of the Navy at their various installations. For the Air Force, we are generally interested in looking at all of our installations globally, but we recognize that a vendor’s technological solution combined with the available geothermal resource, market incentives, regulatory rules, permitting requirements, and supply chain constraints at each location will impact the financial viability of a project. We will look to the vendor to help us identify technically and financially feasible project sites.

1. Are there restrictions on grants/loans?

Under 10 U.S.C. § 4022 where the Air Force is providing vendors with consideration in the terms of access to our land and staff time, a vendor is allowed to finance the prototype project using their own financial resources, which includes a vendor’s own capital as well as grants, loans, and equity from third-parties. Once an agreed upon site location is identified, the Department of the Air Force will support, where possible, the vendor’s pursuit of applicable grants, loans, and other third-party financing resources.

1. Is there a time limit on the video/ file size limit?

Yes, the limitations are contained within the Tradewinds Solutions Marketplace Announcement (attached hereto). They are as follows:

3. Videos must be no longer than five (5) minutes (5:00) in length.

3. Encoded for streaming as a .mp4 file under 5gb.

1. Does the use of geothermal stop at electricity generation, or should we include a solution for hydrogen production as well?

The vendor will have the flexibility to propose the most financially viable project concepts for a particular location. The most viable project concept may only be for electricity generation and consumption. Or it could include multiple use cases – geothermal for electricity consumption and for electrolysis to produce hydrogen, among others.

1. Will there be any cost recovery mechanism? (if exploration phase is unsuccessful) At the moment there is no cost recovery mechanism if the prototype project is unsuccessful.

1. What is the plan for the plant? Would the Air Force own and operate, or will they pay a fee?

Please see the following language in the problem statement – “If electricity production is technically and economically feasible, the prototype project may be considered further for future construction of a utility-scale facility for the production of electricity and hydrogen. DAF would not execute a long-term contract under the prototype to purchase the electricity and hydrogen commodities. Rather, DAF would execute a sole-source, follow-on contract only after the prototype has been successfully completed. Once the follow-on contract has been executed, construction of the facilities could proceed. DAF would not own the facilities, rather it is expected that a third party would own, operate, and maintain them.”

1. Are conventional (hydrothermal) prototype projects eligible?

The Air Force’s preference is for advanced and enhanced geothermal technologies, because of the potential of these technologies to generate geothermal energy at locations where Air Force installations are not located near naturally occurring, hot, underground, water resources. The Air Force, however, is open to considering conventional geothermal technologies.

1. It is understood that if a power plant is built that a third party would own, develop, operate, and maintain the facilities under a sole source contract. Will this be in the form of an exclusive, long-term lease agreement with a guarantee to purchase electricity? If so, what is the term of the agreement? What is the price range for electricity?

The Air Force has various statutory authorities for long-term power purchase agreements (PPA). One of the milestones under a prototype project will be the evaluation of different contract pathways to determine the best option or options available for a PPA. Under the prototype, the PPA terms and conditions would be discussed by the parties to determine if the chosen pathway is feasible based on the project concept and its financial proforma and the requirements under the chosen contract pathway. The Air Force, however, would not execute the PPA under the prototype. Rather, once the Air Force deems the prototype “successfully completed,” then the Air Force will negotiate and execute the PPA under a follow-on production contract under 10 USC 4022(f).

1. What is the timing of the award, and what is the duration of the prototype project?

Under the Tradewinds process, video submissions will be evaluated in a timely fashion, and respondents will be notified in about a month or more if their submission was deemed awardable. If the submission is awardable, then the vendor and the Air Force will be able to enter into conversations about the best locations to pursue a prototype project and the milestones for that prototype project. Once the parties have a meeting of the minds, the Air Force will execute a prototype agreement with the vendor to execute those milestones on an agreed upon timeline. Given the complexities and risks involved in developing geothermal energy and the due diligence and funding required, the Tradewinds process allows for flexible, iterative conversations and timelines.

1. Can adjacent, off-site lands (federal, state, and/or private) be included for 1) geoscientific exploration and 2) project development, including siting of power plants?

As noted above, the Air Force has a number of different statutory authorities for entering into power purchase agreements. Each statue has its own requirements, so adjacent lands may or may not be allowable for development under a specific statutory authority. However, the Department of the Air Force will encourage geothermal vendors to be as creative as possible in their project concepts to identify available geothermal resources and potential offtakes. The vendor could conceivably develop multiple deal structures with different offtakes. But with regard to the Air Force, any power purchase agreement it enters into will need to adhere to federal statute, rules, and requirements, and comply with any relevant state laws and regulations.