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U.S. Army One Step Closer to Contracting $7 Billion in Renewable PPAs, Starts with Geothermal

The U.S. Army Corps of Engineers, Engineering and Support Center along with the Army Energy Initiatives Task force (ETIF) announced its first Multiple Award Task Order Contracts (MATOC) to support renewable energy projects on Defense Department Installations under the Renewable and Alternative Energy Power Production for DOD Installations. These first contracts focus on geothermal projects, but additional contracts will be awarded by technology in solar, wind and biomass throughout the remainder of 2013.

In order for the Army to reach its renewable energy goals, it needed to find an effective approach to work with the private sector, according to Mr. John Lushetsky, the EITF’s executive director. "The significant interest we’ve seen from industry [after issuing the MATOC] indicates that we are on the right path.  The EITF has worked closely with the Huntsville Center to make the MATOC a streamlined and agile tool for the government to procure power from large scale renewable energy projects,” he said.

According to Dave Foster, army spokesman, the contracts are for Indefinite Delivery Indefinite Quantity (IDIQ) projects, which means that the winning projects’ capacity and other specifications has not yet been determined. MATOCs allow qualified contractors to compete for upcoming task order contracts for large-scale geothermal projects. MATOCs were distributed to five companies — Constellation NewEnergy, ECC Renewables, Enel Green Power North America, LTC Federal, and Siemens.

“The MATOC is a key renewable energy procurement contracting vehicle to help the U.S. Army achieve its goal to deploy one gigawatt of renewable energy by 2025, and to increase our agility by streamlining processes,” said Foster.

The up-to $7 billion will be spent on 30-year or less power purchase agreements (PPAs) with each winning renewable energy plant, which will have to be designed, built and operated using private sector financing. According to Foster, as renewable project opportunities at designated Army installations are validated, the Army Corps of Engineers will issue a task order request for proposal from the pre-qualified bidders. The proposals will then be evaluated and a contract will be awarded to the winning project.

“In our current fiscal environment, attracting third-party money to build renewable energy production facilities that will allow military installations to purchase energy at a pre-determined rate without building, owning and maintaining the facility is the right thing to do,” said Col. Robert Ruch, Huntsville Center commander in a statement.  “Increasing energy security is a top priority for the DOD and Army leadership, and this effort will lead to enhanced energy security and sustainability for our installations.”

Lead image: US military helmet via Shutterstock

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