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Army seeks $7.1B in private investment for renewable energy power plants

The Army hopes private investors will lay down the $7.1 billion needed to build recently announced renewable energy plants, an official said Tuesday.

The service plans to attract investment through long-term 20- to 30-year power purchase agreements, said Jonathan Powers, special adviser to Katherine Hammock, assistant secretary of the Army for installations, energy and environment.

Powers said in an interview with Nextgov that the investors also will be able to sell surplus power from these plants on the open market.

The 2005 Energy Policy Act requires federal agencies to purchase 7.5 percent of their energy from renewable sources by 2013 while the 2007 National Defense Authorization Act requires that 25 percent of the Defense Department's total electricity come from renewable sources by 2025.

Currently, the Army derives approximately 2.1 percent of its energy from renewable energy sources, Powers said. Army installations used 9,775,876 megawatt hours of electricity in 2010 at a cost of $1.2 billion.

Army Secretary John M. McHugh told the GovEnergy Conference in Cincinnati last week that the service expects to generate 2.1 million megawatts of power from renewable energy resources by 2025.

McHugh also announced the establishment of the Army Energy Initiatives Office to shepherd the renewable energy effort, and Powers said that office, which will go into operation Sept. 15, already has identified 20 projects, which he declined to list.

The Energy Initiatives Office will be a one-stop shop for Army installation renewable energy projects, Powers said. They will be the focal point for investors and developers who are looking for energy deals. The Army can lease land at an installation for development of a wind energy farm, and then enter into a long-term power purchase agreement, he noted.

Besides wind power, the Army also is looking at plants powered by solar and geothermal energy, as well as biomass -- including small trees or other agricultural feed stocks, he said. Depending on the installation, Powers said the Army potentially could reap large savings by switching to renewable energy resources.

The Army-managed installation on the remote Kwajalein Atoll in the Pacific Ocean supports missile testing and currently spends $85 million a year on diesel fuel to power generators, which could be replaced by energy harnessed by wind, solar or wave power, according to Powers.

Last week the Army tapped Fort Bliss, Texas, as the pioneer installation for renewable energy in a project dubbed Net Zero, which means the installation will produce as much power as it consumes. The service put out a request for information to industry for renewable energy power plants, along with solid waste and water recycling projects, with a total estimated value of $1.5 billion.

In the Fort Bliss RFI, the Army said it wants to develop wind, solar power, geothermal and waste-to-energy renewable power sources on the sprawling 1.1 million-acre base that straddles the Texas-New Mexico border and is home to 34,000 soldiers and their families.

Col. Joseph A. Simonelli Jr., garrison commander, said, "Fort Bliss is seeking information on a variety of technologies and approaches in a number of areas that can be economically and feasibly implemented through either a combination of public and private investment, or through public-private partnerships on Army land with long-term payback through savings or commodity purchases."

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