BILL ANALYSIS
AB 2498
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Date of Hearing: May 3, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2498 (Skinner) - As Amended: April 5, 2010
SUBJECT : Combined heat and power systems.
SUMMARY : Updates the definition of a combined heat and power
(CHP) system to require compliance with greenhouse gas emission
reduction measures adopted by the California Air Resources Board
(ARB), pursuant to AB 32 (Nunez) Chapter 488, Statutes of 2006.
EXISTING LAW :
1)Establishes the Waste Heat and Carbon Emission Reduction Act
(CHP Act) to advance the efficiency of the state's use of
natural gas through improved use of waste heat when it is cost
effective, technologically feasible, and environmentally
beneficial. The CHP Act:
a) Requires a CHP system to meet the following efficiency
standards:
i) Prior to January 1, 2010, temporary guidelines
adopted by the California Energy Commission (CEC) reduce
waste energy, are sized to meet the customer's thermal
load, operate in an optimal manner, and are
cost-effective, technology feasible, and environmentally
beneficial.
ii) Guidelines adopted by the CEC that accomplish the
same objectives as the temporary guidelines.
b) Requires a CHP system to meet greenhouse gas emission
performance standards adopted by the California Public
Utilities Commission (CPUC) for any baseload generation
where the emissions of greenhouse gases are no higher than
the rate of emissions of greenhouse gases for
combined-cycle natural gas baseload generation facility.
c) Includes a provision that an eligible CHP system shall
meet an oxides of nitrogen (NOx) emissions rate standard of
0.07 pounds per MWh and a minimum efficiency of 60%.
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2)Precludes a load-serving entity from entering into a long-term
financial commitment unless any baseload generation supplied
under the long-term financial commitment complies with the
greenhouse gases emission performance standard established by
the CPUC (or the CEC for publicly owned utilities).
3)Requires the ARB, on or before January 1, 2011, to adopt
greenhouse gas emission limits and emission reduction measures
to achieve the maximum technologically feasible and
cost-effective reductions in greenhouse gas emissions in
furtherance of achieving the statewide greenhouse gas
emissions limit, to become operative beginning on January 1,
2012.
FISCAL EFFECT : Unknown.
COMMENTS :
1) CHP systems : Most CHP systems perform two levels of service
using a single input of generation. They can be used to
generate electricity for the industrial process it serves, thus,
reducing pressure on the electricity grid and infrastructure
during peak times. Also, a CHP system can then heat the
facility's own hot water needs. Some CHP systems can also
release electricity back onto the grid during peak times, which
can maintain reliability and balance energy loads.
The first step requires a generator powered by an internal
combustion engine, combustion turbine, or boiler. The most
common fuels used to run the generator include natural gas,
biogas, biomass, ethanol, methanol, propane, butane, and liquid
or solid hydrocarbons.
The second step captures the heat from combustion that does not
become electric or mechanical energy. The heat lost is referred
to as "waste heat." CHP facilities use the waste heat for space
heating, water heating, or cooling and drying. Typical CHP
applications include schools, hospitals, universities, apartment
buildings, health clubs, or any industrial company that requires
electrical and thermal energy at the same time.
2) Distributed Generation : Most CHP facilities are considered
distributed generation (DG). DG refers to small generation that
is located near areas where there is electrical demand. Most DG
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is on-site electric generation and is intended to provide
electricity to the individual customer that owns the generator
and is sized to serve the customer's own electric needs. The
most common forms of DG include solar panels and micro-turbines.
More recently, customers have installed fuel cells at their
facilities. Some utilities locate DG, such as fuel cells, near
"load pockets" or concentrated areas of high demand to relieve
pressure on the utility's transmission and distribution system.
Current law requires all DG to meet specific emission standards
adopted by the ARB. Customers who own DG facilities participate
in a real-time metering and pricing program. The PUC
establishes rates and fees for the DG customer classes.
3) CHP facilities vary : According to the CEC, CHP facilities
range in size from several kilowatts (kW) to 25 megawatts (MW).
This bill only refers greenhouse gas emission reduction
standards to the ARB. Regardless, efficiency standards also
matter.
The efficiency standards of DG facilities are determined by how
much of the energy is actually useful. DG systems that produce
only electric power will have an electric efficiency in the
range of 20% to 45%. CHP, by adding heat recovery, increases
the useful energy (by utilizing the heat and power generated)
and results in much higher total fuel utilization.
CHP efficiencies can range from 50% to 90%, depending on the
primary fuel source used. Certain reciprocating engines and
combustion turbines can achieve efficiencies of up to 90%;
however, these technologies can also achieve efficiencies as low
at 50%. The efficiencies of certain microturbine generators can
range from 60% to 80%. Stirling engines and a specific type of
fuel cell (proton exchange membrane fuel cells) have a
relatively constant rate of efficiency at 80%. The U.S.
Combined Heat and Power Association states that under common
circumstances, CHP systems will achieve efficiencies exceeding
70%. "CHP systems achieving efficiencies exceeding 80% are
frequent, and some systems have been shown to reach levels in
excess of 90%."
Southern California Edison noted that only 3 of its 59
contracted CHP facilities can achieve an 80% efficiency rate.
AB 2498
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REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083