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10 April 2008 -- Renegy Holdings Inc. said it signed a non-binding letter of intent to purchase an idle biomass power plant in California for $5,350,000.
At roughly $300/kW, this plant will add 18 MW of electricity generating capacity to the company's portfolio of biomass power facilities, which currently includes a 24 MW plant in Arizona that is scheduled to begin operating during the second quarter of 2008, and an idle 13 MW plant in California that could be restarted by the end of 2008.
Renegy expects the deal to be complete within the next 90 days, subject to its completion of final due diligence, entering into a definitive purchase agreement for the plant, securing necessary financing and other closing conditions.
Renegy estimates that only a modest amount of additional investment will be required to refurbish and restart the plant and believes the plant could be fully operational by the end of 2008.
Initial fuel studies indicate that a long-term supply of wood waste fuel exists within a 75-mile radius of the plant site. Most of the fuel for the plant is expected to come from commercial, industrial, municipal and agricultural waste, with a smaller percentage to come from forest residues.
To further manage the fuel requirements of its California biomass plants, Renegy plans to develop a centralized fuel management infrastructure in California.
Related Articles of Interest:
Biomass gets BIG
PGRE&F: Changes and Challenges for the Renewable Energy Industry
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