California Utilities to Support Pilot Projects to Increase Use of Renewable Natural Gas

Southern California Gas Co. (SoCalGas), San Diego Gas & Electric (SDG&E), Pacific Gas and Electric Company (PG&E) and Southwest Gas have jointly issued a draft solicitation for dairy biomethane pilot projects under California Senate Bill (SB) 1383. Proposed projects must demonstrate an ability to capture and process biogas from dairy cows to produce renewable natural gas, which can replace traditionally sourced natural gas for fueling vehicles, as well as generating electricity and heating homes. At least five projects will be selected.

The draft solicitation is the first step in a new program created under SB 1383 by the California Public Utilities Commission (CPUC), which has been directed to reduce methane emissions from agriculture in the state by 2030.

“This is an exciting first step to building the market for renewable natural gas,” said Lisa Alexander, vice president of customer solutions and communications for SoCalGas. “Renewable natural gas, with its ability to turn methane emissions into a source of energy, is a critical element of a comprehensive approach to climate change, and we look forward to supporting these efforts.”

Proposed projects will be selected by the CPUC, California Air Resources Board and the California Department of Food and Agriculture. The agencies will jointly choose projects based on an evaluation of the proposed business model, likely greenhouse gas reductions realized, and cost effectiveness of achieving these reductions, environmental benefits, disadvantaged community benefits and project readiness.

Dairy biogas development is rapidly increasing in California, with help in part from $35 million in grant funding last year from the California Department of Food and Agriculture (CDFA). CDFA is expected to provide an additional $61 to $75 million in grant funding for new dairy biogas projects this year. There are currently about 40 projects in the works, and experts expect there could be as many as 120 projects being developed by 2022.

The utilities will explain the draft solicitation process, gather feedback to clarify the process and answer questions at a workshop and webinar on Wednesday, January 31, from 1:00 to 3:00 p.m. at the California Department of Food and Agriculture in Sacramento. Additional information on the draft solicitation as well as the workshop and webinar can be found here.