BOARD MEETING DATE: October 1, 2010
AGENDA NO. 35

PROPOSAL:

Clean Fuels Program Draft Plan Update

SYNOPSIS:

In March 2007, the Board requested that staff bring the Clean Fuels Program Plan Update before the Board as a separate item to solicit more direct input before requesting final approval each year in early spring.  This action is to receive and file the calendar year 2011 Clean Fuels Program Draft Plan Update with major emphasis on electric and plug-in hybrids, including their infrastructure, clean engine technologies and systems, support for hydrogen and fuel cell technologies and refueling infrastructure deployments, including upgrades and expansions to refurbish or increase capacity for alternative fuel stations installed five or more years ago.

COMMITTEE:

Technology, September 24, 2010

RECOMMENDED ACTION:

Receive and file. 
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In March 2007, the Board requested that staff bring the Clean Fuels Program Plan Update before the Board as a separate item to solicit more direct input on the distribution of potential project funds before requesting final approval each year in early spring. Staff has prepared a calendar year 2011 Clean Fuels Program Draft Plan Update with major emphasis on electric and plug-in hybrids, including their infrastructure, clean engine technologies and systems, support for hydrogen and fuel cell technologies and refueling infrastructure deployments, including upgrades and expansions to refurbish or increase capacity for alternative fuel stations installed five or more years ago.

Proposal

The attached Clean Fuels Program Draft Plan Update identifies potential projects to be considered for funding during 2011. The proposed projects reflect promising low- and near zero- or zero-emission technologies and applications that are emerging in the different source categories. This update includes a number of proposed projects, not all of which are expected to be funded in the current fiscal year given the available budget. Projects not funded in 2011 may be considered for funding in subsequent years.

In addition to identifying proposed projects to be considered for funding, this Update confirms ten key technical areas of highest priority to the AQMD. These high priority areas are listed below based on the proposed funding distribution shown in Figure 1:

• Electric and Hybrid Vehicle Technologies

• Infrastructure and Deployment (compressed natural gas and liquid natural gas)

• Hydrogen Technologies and Infrastructure

• Mobile Fuel Cell Technologies

• Engine Systems (particularly in the heavy-duty vehicle sector)

• Emission Control Technologies

• Fuels and Emission Studies

• Stationary Clean Fuels Technologies (including renewables)

• Health Impacts Studies

• Outreach and Technology Transfer

It should be noted that these priorities represent the areas where AQMD funding is thought to have the greatest impact. In keeping with the diverse and flexible “technology portfolio” approach, these priorities may shift during the year to capture opportunities such as cost-sharing by the state government, the federal government, or other entities, or address specific technology issues which affect residents within the AQMD.

Figure 1 graphically depicts the potential distribution of AQMD Clean Fuels funds, based on projected program costs of $16.6 million for the ten project areas discussed above. The expected actual project expenditures for 2011 will be much less than the total projected program cost since not all projects will materialize. The target allocations are based on balancing technology priorities, technical challenges and opportunities discussed previously, and near-term versus long-term benefits with the constraints on available AQMD funding. Specific contract awards throughout 2011 will be based on this proposed allocation, the quality of proposals received and evaluation of projects against standardized criteria, and ultimately, the Board’s approval. At that time, additional details will be provided about the technology, its application, the specific scope of work, the project team capabilities, and the project cost-sharing.

These technical priorities will necessarily be balanced by funding availability and the availability of qualified projects. Revenues from several sources support the AQMD’s Technology Advancement program. The principal revenue source is the Clean Fuels Program, which, under H&SC Section 40448.5 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile and stationary sources to support the program’s objectives, albeit with constraints on the use of the funds. Grants and cost-sharing revenue contracts from various government agencies, such as CARB, the California Energy Commission (CEC), the National Renewable Energy Laboratory, and the United States Department of Energy, also support technology advancement efforts.

Figure 1: Projected Funding Distribution for Potential Projects in 2011 ($16.6 million)

The proposed update is the result of a comprehensive planning and review process. This process has included consideration of the 2007 AQMP control measures and coordination activities involving outside organizations. As part of this process, staff hosted two one-day retreats in February 2010 and August 2010 to solicit input from the Clean Fuels Advisory Group, the Technology Advancement Advisory Group, and other technical experts. During these retreats, the participants reviewed the current Technology Advancement projects and discussed near-term and long-term technologies as potential projects. These discussions, where appropriate, were fashioned into project areas and included in this year’s Plan Update. Additionally, staff attended meetings with CARB, CEC, the California Fuel Cell Partnership, the National Hydrogen Association and other entities to solicit and incorporate technical areas for potential leveraged funding.

The major areas of focus are proposed in these areas:

• hybrid and electric technologies

• engine systems

• hydrogen and fuel cell technology

• infrastructure and deployment

The relative shifts in funding allocation are due in part to the $78.5 million the SCAQMD was awarded under solicitations released as a result of the American Recovery and Reinvestment Act of 2009 and the $3 million the SCAQMD was awarded in early 2010 from the CEC through AB 118 for infrastructure deployment. Additionally, there are anticipated co-funding opportunities in the near term from CEC, DOE and NREL for hybrid and full electric heavy-duty projects and heavy-duty natural gas engine system development and demonstration. Lastly, for the last two years the SCAQMD has pushed hard for electric and hybrid-electric technologies and the urgency now is to timely establish infrastructure for these fleets which are already on the road with more soon available on the market.

Figure 2: Plan Update Comparison 

Based on communications with the organizations specified in H&SC Section 40448.5.1 and review of their programs, the projects proposed in this update do not appear to duplicate any past or present projects. As each individual project is recommended to the Board for funding, staff will continue to coordinate with these organizations to ensure that duplication is avoided and ensure optimal expenditure of Clean Fuels Program funds.

Attachment (DOC, 237k)

Clean Fuels Program Draft 2011 Plan Update