GHGs New Focus For California Incentives

California is changing the way it operates its Self-Generation Incentive Program (SGIP), basing eligibility and awards on how much greenhouse-gas emissions distributed-energy projects put out compared to the grid-purchased electricity they replace.

The state’s Public Utilities Commission (CPUC) called it a “streamlined” process that will apply to wind turbines, fuel cells, organic rankine cycle/waste heat capture, pressure reduction turbines, advanced energy storage and combined heat and power gas turbines. Solar is covered under a separate program by the state.

onsite power generation, Bloom Energy, California

image via Bloom Energy

CPUC President Michael Peevey said in the announcement that the changes to the program were made to help reach the goal of using 33 percent renewable energy sources by 2020 and reduce greenhouse gas emissions to 1990 levels by 2020.

The changes to the program will apply to all projects going forward. In its announcement, the commission said participants will receive up-front and performance-based incentives – so payments will be reduced or eliminated if a project fails to reduce greenhouse gas emissions sufficiently. Also, the commission said incentives will apply only to the portion of the generation that serves a project’s onsite electric load.

Few other details were given in the announcement, but in a draft decision the CPUC had laid out changes in incentive amounts that could be significant to fuel-cell developers, in particular. In its analysis, GigaOm said Bloom Energy could be among the potential losers as support for both fuel-cell deployment and biogas – particularly biogas from out-of-state sources – is reduced or eliminated. According to reports, Bloom last year reaped $218.5 million in up-front payments from the SGIP.

The Self-Generation Incentive Program was started in 2001 to encourage the development and commercialization of distributed generation – generation installed on the customer’s side of the utility meter. The program is available to customers of Pacific Gas and Electric, Southern California Edison, Southern California Gas and San Diego Gas and Electric.

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Kristy Hessman is a writer and native Oregonian who currently resides in California. Before starting her own company, she worked as a reporter covering business and politics for daily newspapers and The Associated Press.

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