Sacramento, CA—Today the Senate Committee on Energy Utilities and Commerce advanced two pieces of companion legislation authored by Senator Josh Becker (D-Menlo Park) that will foster a green hydrogen industry in California and reduce greenhouse gas (GHG) emissions in the industrial sector while avoiding further stresses to the electricity grid. These companion bills take a two-pronged approach to achieve this.
SB 993 directs the PUC to create a new pricing structure for green hydrogen production and for industrial customers switching away from fossil fuels to electricity for their heat. This tariff would be open only to these new use cases, as a way of supporting new projects that will help us reduce pollution. It aims to provide low electricity prices during favorable hours, when the grid has plenty of clean electricity, in exchange for higher prices during other hours to encourage these large consumers to reduce their usage and avoid putting stress on the grid during those unfavorable hours.
SB 1018 allows hydrogen producers or industrial customers to be supplied with clean electricity directly from large solar or wind farms rather than using power from the grid. This is similar to installing rooftop solar, except that the amount of power needed for hydrogen production or a factory requires acres of land for the solar or wind generation, something that is not currently allowed by current regulations that limit “behind-the-meter” generation to a single property or an adjacent property. This bill creates a narrow, new exception that would allow a large solar or wind generator to sell their output directly to a single customer for the purpose of producing hydrogen or providing industrial heat.
“Hydrogen is an important and versatile tool for achieving our climate goals,” said Becker. “My legislation furthers our climate goals by aligning our power sector policies with other state and federal policies to support the development of low-carbon hydrogen and incentivize industry to move away from burning fossil fuels.”
“It is a priority for us to ensure that California moves away from today’s hydrogen production methods, which burn fossil fuels and harm local communities,” said Merrian Borgeson, California Director for Climate & Energy at the Natural Resources Defense Council. “SB 993 is a smart approach to providing access to grid power for targeted uses. It will ensure that hydrogen producers and industrial uses are responsible grid citizens, and add to the flexibility and resilience of the grid rather than threaten it. SB 1018 would contribute to meeting California’s climate goals by providing an option for new industrial technologies to be powered entirely by renewable energy while minimizing emissions and avoiding impacts on the grid. Further, it could bring renewables online more quickly by having them matched directly with loads, allowing them to bypass rather than bog down the lengthy interconnection process.”
This legislative package is supported by 350 Sacramento, Advanced Energy Economy, CA Hydrogen Coalition, CA State Association of Electrical Workers, CA State Pipe Trades Council, Climate Action California, Climate Reality Project, Silicon Valley, Coalition of CA Utility Employees, Green Hydrogen Coalition, Industrious Labs, Intersect Power, NRDC, Project 2030, Rondo Energy, and Sierra Club. Both bills now head to the Senate Appropriations Committee for consideration.