The program, approved in September 2009, is designed to remove barriers to interconnection with the utility by providing standard rates and contract conditions that make it easier for SMUD and its power-generating customers to do business.
For example, for contracts signed in 2010, SMUD customers with PV systems will be paid on average $0.0968 per kilowatt-hour (kWh) for a 10-year contract, $0.1040 per kWh for a 15-year contract, and $0.1107 per kWh for a 20-year contract. Applications must include $1,400 for the Interconnection Review Fee and a deposit of $20 per kilowatt, and each system is limited to 5 MW in capacity. See the SMUD press release (PDF 85 KB) and Feed-In Tariff Web page.
FITs, which are widely used in Europe, face regulatory constraints in the US. However, according to a January 2010 report from DOE's National Renewable Energy Lab (NREL), the path for states seeking to provide legal FITs is tricky, but possible.
The report, "Renewable Energy Prices in State-Level Feed-in Tariffs: Federal Law Constraints and Possible Solutions," concludes that states can offer feed-in tariffs, but need to create them in such a way as to meet federal requirements under the Public Utility Regulatory Policies Act of 1978 and the Federal Power Act of 1935.
The report describes several ways for states to create incentives for renewable energy. One suggestion is for payments based on cost of generation, in keeping with federal limits, but then adding incentives on top of that cost through subsidies, Renewable Energy Credits, or state tax credits. The report notes that given the legal uncertainties, state regulatory groups should consider getting advice from appropriate federal agencies. See the NREL report (PDF 1.37 MB).
Cellulosic Ethanol Facilities Sprout Up in Four States
A shift in biofuel production to cellulosic biofuels is underway as both demonstration and commercial-scale power plants are opening or moving closer to completion.
In the commercial arena, Poet, the largest U.S. producer of ethanol, is planning construction this year of Project Liberty, a cellulosic ethanol plant in Emmetsburg, Iowa, that will use corn cobs from local farms to produce 25 million gallons a year of ethanol. The plant will be co-located with Poet's corn grain ethanol plant and should start commercial operations in 2011. DOE has provided $80 million in funding for the facility, and in late January, the Iowa Department of Economic Development approved a $5.25 million grant, bringing Iowa's total contribution to $20 million.
Poet's pilot-scale plant in Scotland, South Dakota, is producing cellulosic ethanol at a rate of about 20,000 gallons per year and has successfully driven the cost down from $4.13 per gallon to $2.35 per gallon, as the company aims for a commercial cost below $2 per gallon. See the Poet press releases on the Iowa grant and the cost reductions.
Meanwhile, Abengoa Bioenergy is planning to develop the nation's first commercial-scale hybrid cellulosic ethanol and power plant in Stevens County, Kansas. The $550 million facility is expected to produce 15 million gallons of ethanol annually using corn stover, wheat straw, and switchgrass as feedstock. In January, Abengoa signed an agreement to sell 75 MW of power from the facility to Mid-Kansas Electric Company.
