Dairy Digester Research and Development Program (DDRDP)

2016-17Public/Stakeholder Listening Session

California Department of Food and Agriculture

PRESENTATION OUTLINE

DDRDP Program Update Legislative Updates and Background Division of funds for methane reduction Digesters: Program Framework

Eligibility, Grant Size, Program Requirements, Scoring Criteria

Grant ProcessTimeline

Next Steps

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PROGRAM UPDATE

Project Amount awarded

Biogas end-use Status

Verwey-Hanford Dairy Digester

$3,000,000 Electricity Completed.

Open Sky Ranch $973,430 Electricity Completed.

Verwey-Madera Dairy Digester

$2,281,091 Electricity In progress.

West-Star North DairyBiogas Project

$1,837,005 Electricity, RCNG in future

In progress.

Lakeview Dairy Biogas Project

$2,000,000 Electricity,RCNG in future

In progress.

Carlos Echeverria & Sons Dairy Biogas Project

$1,000,000 Electricity, RCNG in future

In progress.

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2016 LEGISLATION AB 1613

CDFA appropriated $50 million for methane emission reductions from dairy & livestock operations

To be encumbered by June 2018 and expended/liquidated by June 2020.

SB 859, Section 6

Prioritize criteria air pollutants reductions. SB 1383 (Lara) Short Lived Climate Pollutants - ARB to develop

comprehensive strategy no later than Jan. 1, 2018: Target: to reduce dairy manure methane emissions to 40% below

2013 levels by 2030 Will regulate methane emissions from livestock and dairy manure

management.

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CDFA PROGRAM DEVELOPMENT PROCESS

Initial Program Framework Draft

Finalize Grant Solicitation

Review of Submitted

Applications

Awards Announced

Project Verification and Monitoring of

Greenhouse Gas Reductions

Feedback from: • State and federal agencies• Policy documents and

research literature• Public comments• Stakeholder and partner

input: EJ, industry, researchers, etc.

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DIVISION OF FUNDS FOR METHANE REDUCTION

Dairy Anaerobic Digesters (ADs) and “Nondigester” Alternative Manure Management Practices (AMMPs)

$45 million to be divided (remainder 10% administrative costs) among two incentive programs, to support ADs and AMMPs, respectively.

Proposed division based on GHG mitigation potential of practices.

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DETERMINATION OF DIVISION OF FUNDS

GHG Reduction targets per SB 1383 (Lara, 2016): 40% reduction in dairy methane by 2030 from 2013 levels. 40 % of 10.24 MMTCO2e1 = 4.1 MMTCO2e

Number of projects of each management practice and dairy size to meet targets = (GHG Emission Reduction Target, MMTCO2e) ÷(GHG mitigation potential of each practice)2

Number of cows addressed = Number of projects needed of each management practice type and dairy size × Dairy size

If the resultant number of cows addressed for any of the scenarios exceeded the total number of cows in the state3, that scenario was rejected.

1. Air Resources Board 2015 California GHG Inventory (2013 emissions). https://www.arb.ca.gov/cc/inventory/pubs/pubs.htm2. Kaffka, S. et al (2016). Evaluation of Dairy Manure Management Practices for Greenhouse Gas Emissions Mitigation in California.

http://biomass.ucdavis.edu/wp-content/uploads/2016/06/ARB-Report-Final-Draft-Transmittal-Feb-26-2016.pdf3. California had 1,747,770 milk cows and heifers in 2015, according to the California Dairy Statistics Annual (CDFA, 2015).

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ADs (80% of $45 million): $36 million

AMMPs (20% of $45 million): $9 million

% of Target Met by Digesters

GHG Emissions Reduction : Digesters (MMTCO2e)

% of Target Met by AMMPs

GHG Emissions Reduction : AMMPs (MMTCO2e)

Number of cows exceeded?

100 4.1 0 0 No80 3.28 20 0.82 No75 3.08 25 1.02 No70 2.87 30 1.23 Yes60 2.46 40 1.64 Yes50 2.05 50 2.05 Yes

DETERMINATION OF DIVISION OF FUNDS

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DAIRY DIGESTERS: PROJECT ELIGIBILITY

Projects must be located in CA and: Achieve permanent, measurable GHG reductions Maximize protection of water and air quality.

Existing milk producers in CA. Projects must use technologies commercially

available in CA. Cluster projects (i.e. centralized digester) can apply. Defunct digesters eligible for this program.

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GRANT SIZE/MATCHING FUNDS

Grant sizeA maximum of 50% of the total cost of

project, up to $3 million.

Matching fundsMinimum of 50% matching funds

required (no more than 25% in kind).

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Eligible bio-methane uses: On-site use or into electrical grid/pipeline: Electricity generation Transportation fuel/RCNG

Funds cannot be used for: Upgrades to existing/functional digesters to

boost energy production. Change in management practices that would

increase baseline GHG emissions.

PROGRAM REQUIREMENTS 11

Flare-only projects not eligible for funding.

Co-digestion feedstock up to 20% dry weight.

Quarterly status reports, annual greenhouse gas emissions reduction data for 3 years after the digester is operational (subject to ARB guidelines).

PROGRAM REQUIREMENTS 12

PROGRAM REQUIREMENTS

Water Quality Protection: Double–lined ponds consistent with the Tier 1

specification of the Dairy General Order (R5-2013-0122) of the Central Valley Regional Water Quality Control Board, or,

Above-ground concrete tank, or, Below-ground concrete lined tank.

Air Quality Protection:Total NOx emissions no greater than 0.50 lb/

MW-hr.

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PROPOSED APPLICATION SECTIONS

Feasibility of the Digester Project Financial Soundness and Budget Greenhouse Gas Emissions Reductions Calculation

and Reporting Project Benefits

Benefits to Disadvantaged Communities Additional Environmental Benefits

Project Readiness - Regulatory Information, Permits and CEQA

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FEASIBILITY OF THE DIGESTER PROJECT

Project implementation plan including demonstration of site control, history and background of dairy, current management practices, project design, digester technology, plan for bio-gas end use, plan/status of interconnection, power purchase agreement (PPA), plan for digestate use, etc.

Work plan and project timeline. Long-term operations and maintenance plan. Project team members’ qualifications and

experience.

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FINANCIAL SOUNDNESS AND BUDGET

Documents to demonstrate financial soundness of applicant organization, such as Independent CPA Auditor’s Report. Three most recent fiscal year balance sheets. Profit/loss statements and federal tax returns. Other appropriate documentation that demonstrates the

organization’s financial stability, such as Articles of Organization, Bank Statements, etc.

Ability to commence work while waiting for grant payments in arrears.

Project partners must not have filed for bankruptcy in the past five years.

Detailed budget and cost summary for the project.

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GHG EMISSIONS REDUCTION -CALCULATION

Calculations to follow ARB Compliance OffsetProtocol - Livestock Projects (2014) – modeledbaseline emissions. Include Project Emissions?

Minimum Project Life: 10 years. Data input via spreadsheet/ GHG estimation tool

developed by ARB in collaboration with CDFA. CDFA will utilize academic experts for the review

of GHG emission reduction data for each project.

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GHG EMISSIONS REDUCTION -REPORTING

Applicants will be required to report GHGemission reduction results as: Total GHG emissions reduction, GHG reduction per unit energy-corrected

milk produced by dairy, and, GHG reduction per $ CDFA grant money

invested.

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PROJECT BENEFITS

Benefits to Disadvantaged Communities (DACs):Guidance provided by ARB and pursuant to SB 859Section 6 (next slide).

Additional Environmental Benefits: Environmentalbenefits beyond program requirements, enhancedGHG reduction (e.g. covering effluent pond), lowNOx technologies for electricity projects (e.g.microturbines or fuel cells), digestate utilization thatreduces waste/provides additional revenue, etc.

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BENEFITS TO DISADVANTAGED COMMUNITIES

Per SB 859 Section 6:CDFA to review the applicant’s analysis identifying

potential adverse impacts.Applicants are to: Conduct outreach in potentially impacted areas, Determine potential adverse impacts of the

project, Commit to measures to mitigate impacts.

CDFA to prioritize projects based on criteriapollutant emission benefits.

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BENEFITS TO DACs

Feedback requested on CalRecycle language (handout provided)

Available at: http://www.calrecycle.ca.gov/Actions/Documents%5C77%5C20162016%5C1740%5CPurposed%20Application%20Narrative%20Questions.pdf (English)http://www.calrecycle.ca.gov/Actions/Documents%5c77%5c20162016%5c1740%5cProposed%20Application%20Narrative%20Questions%20-%20FY%202016-17_SPA.pdf (Spanish)

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BENEFITS TO DACs

Feedback requested on CalRecycle language (handout provided)

Available at: http://www.calrecycle.ca.gov/Actions/Documents%5C77%5C20162016%5C1740%5CPurposed%20Application%20Narrative%20Questions.pdf (English)http://www.calrecycle.ca.gov/Actions/Documents%5c77%5c20162016%5c1740%5cProposed%20Application%20Narrative%20Questions%20-%20FY%202016-17_SPA.pdf (Spanish)

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PROJECT READINESS

Permits - state which permits are required, whichones already held and which ones will beobtained. Permit check list will be included.

CEQA - level of anticipated CEQA reviewrequired, current status of, and projected timelinefor completion.

Projects to provide evidence of CEQACompliance within 6 months from project startdate.

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PROPOSED SCORING CRITERIA

Application Sections/Criteria Max. PointsFeasibility of the Digester Project 20Financial Soundness and Budget 15Greenhouse Gas Emissions Reductions Calculation and Reporting

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Project Benefits• Benefits to Disadvantaged Communities• Additional benefits

1510

Project Readiness - Regulatory Information, Permits and CEQA

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TOTAL 100

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APPLICATION PROCESS

In the process of developing the application: Application process will be through State

Water Resources Control Board Financial Assistance Application submittal Tool (FAAST) https://faast.waterboards.ca.gov/

Application Workshops (3 workshops and a webinar) will be announced.

Q&A period will be announced.

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TENTATIVE TIMELINE

Item Estimated Dates*Public/Stakeholder Meetings November 2016Notice of Funding availability

releasedFebruary 2017

Grant Application Workshops Feb – Apr 2017Applications proposals due April 2017Proposal evaluation period Apr – Jun 2017Announce grant awardees June 2017

Project Implementation begins July 1, 2017*Subject to change

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PUBLIC MEETINGS

Thursday, November 17, 2016 – 2:00 pm – 4:00 pm California Center for International Trade Development, ROOM 308, Building BState Center Community College District390 W. Fir Ave., Ste. 303, Clovis, CA

Monday, November 21, 2016 – 1:30 pm – 3:30 pmCalifornia Department of Food and Agriculture1220 N Street, AuditoriumSacramento, CA

Tuesday, November 22, 2016 –10:00 am – 12:00 pmUniversity of California Cooperative Extension Stanislaus County3800 Cornucopia Way, Room: HIModesto, CA

Wednesday, November 30, 2016 – 10:00 am – 12:00 pm WEBINARRegistration information will be posted to www.cdfa.ca.gov/go/DD

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NEXT STEPS FOR CDFA

CDFA workshops to share draft program framework and address legislative requirements (ongoing).

Update program for dairy digesters. Develop program for non-digester practices, or

Alternative Manure Management Practices (AMMPs) that reduce methane emissions on their operations.

We are here to listen and look forward to your feedback.Submit comments in writing to: cdfa.oefi@cdfa.ca.gov by

December 15, 2016

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PROGRAM CONTACTS

Casey Walsh Cady, Senior Environmental ScientistCasey.Cady@cdfa.ca.gov | 916-900-5154

Geetika Joshi, Senior Environmental Scientist Geetika.Joshi@cdfa.ca.gov | 916-900-5150

Amrith Gunasekara, Ph.D.Manager, Office of Environmental Farming and Innovation

Amrith.Gunasekara@cdfa.ca.gov

www.cdfa.ca.gov/go/DD

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