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Incentives | RNG

CEC Presents New Funding Plan for AB 118 Biofuels Program

April 11, 2016

Citing the biofuels industry’s demand for increased capital development and a lack of private investment in production facilities, the CEC is developing a funding structure that rewards the biofuel production projects that demonstrate the greatest cost effectiveness.

According to the draft solicitation concept document, “This approach will support the biofuels industry … in moving into alternative funding mechanisms [and providing] variety in funding opportunities for future projects.”

The draft plan calls for every project to produce at least 100,000 dge per year of a biofuel (such as RNG from organic material), but those that yield more than 1 million dge will be eligible for larger grants. The CEC discussed the concept at a March 30 workshop on its next solicitation under AB 118 for advanced biofuels production.

The CEC has approved $17 million for new low-carbon biofuel production facilities, as well as projects that increase capacity at existing biofuel production facilities. The plan will divide funds into two categories based on the annual production capacity of the facility: $5 million for projects that can produce 100,000 to 1 million dge, and $12 million for projects with capacities greater than 1 million dge.

Each applicant will be eligible for as much as $3 million, plus a cost-effectiveness incentive for projects that increase annual production capacity by more than 1 million gallons per year (MGPY). The CEC will calculate the incentive by multiplying the proposed increase by the capacity multiplier. For instance, a facility that increased its production by 4 MGPY would earn a capacity multiplier of 10 cents per dge and bump its funding up $400,000. A facility that increased its production by 20 MGPY or more would earn the largest capacity multiplier, 15 cents per dge.

Proposals will have to pass a two-stage scoring process. In the first, CEC reviewers will score a 10-page preproposal abstract based on the project’s summary, readiness and implementation schedule, budget and cost-effectiveness, and benefits. In the second, applicants will submit a full proposal, which the CEC will score based on the qualifications of the project team, the business plan, project readiness and implementation, budget and cost-effectiveness, benefits, and sustainability.

The CEC hasn’t set a date for the solicitation release, but it expects preproposal abstracts to be due in June and results to be available in July. Full proposals for passing abstracts probably will be due in September, with awards posted in November.

The March 30 workshop presentation is available for download.

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