Comment Log Display

On behalf of FuelCell Energy, Inc. (FCE) I appreciate this
opportunity to provide comments following on the May 30, 2017
workshop held to discuss emission reduction standards for fuel cell
customer-generators participating in the California Public
Utilities Commission (CPUC) Fuel Cell Net Metering (FC NEM)
Program.  For the reasons discussed below, FCE recommends that the
ARB formally endorse and adopt the emission standards developed by
the CPUC for projects participating in the Self-Generation
Incentive Program (SGIP).

Background
FCE is the largest manufacturer of combined heat and power fuel
cells in the United States, and has deployed fuel cells throughout
the state of California in a wide variety of applications at
private and institutional locations.  The fuel cell technologies
FCE employs provide clean baseload power using natural gas or
biofuel, and are helping California meet its ambitious greenhouse
gas (GHG) emissions reduction targets by displacing high-carbon
power plant emissions.  FCE has and continues to pioneer new and
transformative fuel cell technologies and applications, and is
working with customers to develop larger scale projects enabled by
the California Legislature’s decision in Assembly Bill 1637 (AB
1637) to allow participation in NEM by fuel cell systems sized up
to 5 MW.
AB 1637 directs ARB to establish a schedule of annual GHG emission
reduction standards to determine eligibility for the FC NEM program
in consultation with the California Energy Commission, and to
update the schedule of standards every three years.  The statutory
requirement provides that the emission reduction standard must
ensure that each fuel cell “reduces greenhouse gas emissions
compared to the electrical grid resources, including renewable
resources, that the fuel cell electrical generation resource
displaces, accounting for both procurement and operation of the
electrical grid.”  (PU Code §2827.10(b)(2))

The ARB has suggested that key considerations in setting the AB
1637 emission reduction standard include marginal energy resource
mix and displacement assumptions, role of renewable resources, line
losses, grid response to small load changes, utility procurement
and RPS progress, and interpretation of “emission reduction versus
grid resources.”  As some parties at the May 30, 2017 workshop
pointed out, another relevant consideration is that the standard
will only apply for three years, and that the FC NEM program is
only available to projects that commence operation before December
31, 2021.

FCE’s Recommendation

Upon review of the language of AB 1637 and discussion with ARB
staff and stakeholders at the May 30, 2017 workshop, FCE strongly
supports adoption of the current SGIP program emission reduction
standard as the standard for the FC NEM program.
The SGIP program emission reduction standard was established in
Decision 15-11-027, after extensive discussion of factors virtually
identical to the key considerations identified by ARB staff.  It
clearly meets the statutory requirement by establishing a
reasonable benchmark for ensuring that eligible projects will
reduce GHG emissions compared to grid resources, including
renewable resources, displaced by the fuel cell.  The SGIP
emissions standard (described in pages 54-55 of the SGIP Handbook)
adjusts by year, as summarized below:
SGIP GHG Eligibility Emissions Factors, kgCO2/MWh

Application Year   2016 2017 2018 2019 2020
10-Year Average    350  347  344  340  337

We also recommend adoption of the methodology adopted for the SGIP
program for evaluation of GHG impact for actual projects, including
assumed value of carbon content of natural gas, assumed efficiency
of offset thermal sources in combined heat and power, and
calculation of GHG impact using fuel, power, and thermal
measurements that use instruments that are already part of a
typical power project.  Adding requirements for measurements of N2O
and methane adds cost and complexity to projects which is
unnecessary given the extremely low levels of these species in fuel
cell exhaust, and the difficulty of measuring such low levels.

Adopting the SGIP standard, as described above, for the first three
year period prescribed under AB 1637 will comply with the statutory
requirement, provide a reasonable analytical basis for the
standard, save the ARB staff and interested stakeholders further
time and effort essentially duplicating the work that resulted in
Decision 15-11-027, and provide continuity and stability for
program participants. 

We appreciate the Board's consideration of these comments.