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Residents and businesses looking to install wind power, fuel cells or other alternative electricity generators - but not solar power - will get lower subsidies after a decision made this week by the California Public Utilities Commission.
The new rules apply to the Self-Generation Incentive Program, which provides subsidies to businesses and residents who install power generators on their own property. The new rules require new generation projects to reduce to the net production of global warming-causing gases such as carbon dioxide in order to be eligible for the subsidy. They also reduce the subsidies by as much as half, depending on the technology in question.
"Today's decision represents a team effort between the California Air Resources Board and the CPUC as we strive to reach goals of achieving 33 percent renewable energy by 2020 and reduction of greenhouse gas emissions to 1990 levels by 2020," said commission president Michael Peevey in a written statement issued Thursday.
A 2006 state law established a goal of reducing greenhouse gas emissions to 1990 levels by 2020.
Under the rules for the program, applicants must show that proposed generation reduces the amount of net greenhouse gases produced compared with the amount of greenhouse gases produced from normal electricity generation. The exact amount of reduction was left open for a future decision after the commissioners disagreed with staff's method of calculation.
The commission also ruled that some technologies had become popular enough that subsidies could be reduced. Wind turbines will now be eligible for $1.25 per watt, down from $1.50 per watt; fuel cells, which produce electricity from natural gas without burning it, will be eligible for $1.25 per watt, half the previous subsidy; and biogas generators, which are fueled by methane from sewage and landfills, will see no reduction in a $2 per watt subsidy, but companies must buy it on a 10-year contract, twice as long as before.
The new rules require businesses applying to undergo an energy audit, which will highlight areas where the applicants could make better use of their electricity, before they receive a subsidy.
Call staff writer Eric Wolff at 760-303-1927 or follow him on Twitter at NCTRealEstate.
Ministry halts biogas subsidies - Business - The Prague Post
Ministry halts biogas subsidies: Official explanation for the cancellation of energy funds is nothing but hot airTweet Posted: August 3, 2011
(Video is an example of Czech biogas.)
By Emily Thompson - Staff Writer Farmers' representatives claim the sudden halt to funding erodes the confidence of potential investors in renewable resources.
Biogas plants producing electric energy from agricultural waste and energy crops have been bubbling up on farms across the country in recent years, buoyed by the same generous government support given to other renewable energy industries, but the Agriculture Ministry took a pin to the biogas sector July 22 when it canceled subsidies for building new plants.
The decision, which came on the heels of a municipal court ruling against taxes on solar plants intended to offset the cost of solar subsidies, will affect farmers planning biogas operations and change the shape of the sector for better or worse.
"The aim was to respond to the risk of disproportionate growth in purchasing subsidized energy," said Tereza Dvorácková, spokeswoman for the Agriculture Ministry. "Another reason was financial savings."
Dvorácková added that both facility construction and energy buy-back was being funded.
As renewable energy of any type is often more expensive to produce, some politicians and analysts have warned purchasing too much of it for the public grid could cause consumer prices to skyrocket.
Since 2007, when the support for biogas plants began, the Agriculture Ministry has provided funding for 146 plants with a price tag of 2.7 billion Kc ($161 million), of which 72 have already been built and paid for, the ministry said. In total, including nonagricultural landfill biogas plants, there were 273 biogas plants in the country in July of this year, with an installed capacity of 150 megawatts, according to the Czech Biogas Association.
Farmers' representatives say the negative effect of cutting off the funding so suddenly - right in the middle of accepting applications for the next round of grants - reaches beyond farmers and agricultural companies with plans for a plant and has eroded the confidence of all potential investors in renewable energy resources in the country.
Jan Veleba, president of the Czech Agrarian Chamber, expressed this view and even suspects foul play on the part of large energy companies and politicians, who he says colluded to cut the legs out from under the competition.
"We consider it a scam that they stopped administering support - the result of work by the energy lobby to protect their monopoly," Veleba said. "We have indications that this happened at the urging of Prime Minister Necas and that this step is not an expression of the free will of the agriculture minister."
At a time when the solar-subsidy debacle is playing out in the court system and will likely lead to a slew of arbitration from investors whom it now appears were unconstitutionally taxed, state support for renewable energy is a politically sensitive subject. Jan Štambaský of the Czech Biogas Association said this is the reason for a lack of political will to continue subsidies for biogas. He does, however see a silver lining in the decision to halt funds for new plants.
"It will put pressure on the suppliers of the technology to biogas plants because right now the equipment may be more expensive than is necessary," he said. "If suppliers know the producers have one-third of their investment subsidized by the government, we don't believe the prices they charge are really the correct ones. The positive side of this is that the prices will decrease a bit and be more realistic."
Looking forward, Štambaský said though biogas is an important tool for the agricultural industry, more emphasis should be placed on producing biogas from biowaste in landfills. He estimates the 800,000 tons of waste that piles up in Czech landfills each year could be diverted to biogas plants to produce up to 5 percent of the country's electricity needs.
Currently, biogas from all sources accounts for nearly 10 percent of all renewable energy production, which makes up about 6 percent of total energy production. With the Czech Republic pledging to reach 13 percent energy production from renewable resources as part of the EU 2020 goals, biogas is not likely to evaporate anytime soon, with or without government subsidies.
"It will slow down this year and next," Štambaský said, "but it's still a good business."
