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Policies and Incentives for Converting Renewable Natural Gas to Electricity

Policies and Incentives for Converting Renewable Natural Gas to Electricity

Renewable natural gas to energy project on farm

While the price of electricity is currently relatively low and is expected to stay that way in the foreseeable future, some renewable portfolio standard (RPS) programs issue renewable energy certificates that promote the use of renewable natural gas derived from biogas for use as a source of renewable energy. Let's look at the current gas to energy policies, as well as incentives for converting renewable natural gas to electricity offered by some states.

Policies and Incentives for Converting Renewable Natural Gas to Energy in California

In 2018, the state of California passed Senate Bill 100 (SB100) into legislation, which updated the renewable fuel standard, giving it more teeth. SB100 established a groundbreaking state policy that requires 60% of electricity retail sales to end-users to be supplied by renewable energy and zero-carbon energy sources by 2030, increasing to 100% by 2045. Renewable natural gas certified by the California Energy Commission is eligible for renewable energy certificates (RECs) issued under the RPS program, however, Assembly Bill 2196 introduced in 2012 reduced the dependence on RNG obtained from sources outside the state of California to comply with RPS requirements, providing additional incentives for local California-based RNG producers.

California's Senate Bill 1122 (SB1122) implemented the Bioenergy Feed-in Tariff Program, also known as the Bioenergy Market Adjusting Tariff (BioMAT), offering eligible small renewable bioenergy producers (less than 5MW in size) the opportunity to export power to three large publicly owned electric utilities in the state via a fixed-rate standard contract. Category 1 includes biogas produced by wastewater treatment facilities, organic waste diverted from municipal landfills, organic waste from food-processing operations and co-digestion, while category 2 includes bioenergy produced by dairy farms and other agricultural biogas-to-energy projects. The Renewable Market Adjusting Tariff (ReMAT) is a renewable feed-in tariff (FIT) program catering for small renewable energy generators less than 3 MW in size, giving them the opportunity to receive a long-term Power Purchase Agreement (PPA) to supply electricity to the above utilities through a fixed-rate contract.

Policies and Incentives for Converting Renewable Natural Gas to Energy in North Carolina

While North Carolina's renewable portfolio standard (RPS) targets are not as aggressive as the targets set by California, NC's RPS does include bioenergy derived from animal waste sources, which is fueling investment in manure-based bioenergy projects in the state. Consequently, these manure-based RNG-to-energy projects are well-positioned to negotiate long-term Power Purchase Agreements that will help electricity utilities meet their required RPS targets.

According to a recent EPA report, by April 2020, Washington, D.C., together with 30 US states, and three US territories had implemented a renewable portfolio standard for electricity; seven US states and one US territory had a Renewable Portfolio Goal for electricity; three states had a Clean Energy Standard; and two states had a Clean Energy Goal.

Vasyatka1, CC BY-SA 4.0, via Wikimedia Commons
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