Reposted from KQED Climate Watch
http://blogs.kqed.org/climatewatch/2011/08/24/another-renewable-energy-frontier-farm-biomass/

By Katrina Schwartz

California is just a few votes away from changing the rules to allow farmers to connect machines that create bioenergy to the electrical grid, a privilege that has thus far been reserved for farm-generated wind and solar energy.

Passage of the bill — SB 489 — would mean they could use the byproduct of their crops as fuel to create electricity.

Russ Lester, the owner of Dixon Ridge Farms, has been leading the charge to get the rules changed. He has gone to extraordinary lengths to shrink the carbon footprint of his organic walnut farm and processing plant in Yolo County. Brian Jenkins of the California Biomass Collaborative at UC Davis calls Lester the “guinea pig” of bioenergy.

Lester has installed a 50-kilowatt biogasifier that burns walnut shells at high temperatures to create fuel to run his generator, and heat to dry his walnuts. Lester has demonstrated his contraption to many people, including legislators, members of the California Air Resources Board and countless interested farmers. He’s been making the case for SB 489 as the only way to make this type of environmental commitment pay off for farmers. He predicts that many farmers will follow suit if state policy and regulations support farmers to use alternative energy in their businesses.

Beyond creating heat and power to become sustainable, Lester also mixes the char ash leftover from burning walnut shells into the soil where it sequesters stable forms of carbon for hundreds of years and fertilizes his walnut trees. He’s even looking into using walnut oil—another byproduct of processing—as a fuel to replace diesel to run his machinery. Lester says he’s on pace to meet his goal of being energy-neutral by 2012.

“We’re still not 100 percent,” he told me on a recent visit to the farm. “We’re probably at about 45% reduction in our energy usage, but it’s a substantial improvement. So the naysayers who say you can’t do that are really not correct.”

One of the biggest challenges Lester has faced is air quality regulation. It seems that every air quality district in California has different restrictions based on the particular challenges in that neck of the woods. So, the regulations that Lester must meet in the Yolo-Solano Air Quality District are quite different from those a farmer would face in the San Joaquin Valley Air Pollution Control District. That can pose a problem for farmers operating in districts with chronically bad air quality as any emissions they create will be closely watched.

Kevin Hall, a co-founder of the Central Valley Air Quality Coalition, says he supports efforts by farmers to produce renewable energy, but he’s wary of the potential effect on air quality. As long as producers like Lester keep their systems under the one-megawatt limit set out in SB 489, says Hall, it shouldn’t be a problem. It’s conceivable that many small growers could produce the same amount of pollution as a large power plant if they aren’t regulated. Very few California farmers have a biogasifier like Lester’s, so Hall isn’t too concerned just yet.

The biggest opposition to SB 489 comes from utilities. In its opposition letter, PG&E claimed that net-metering (allowing sale-back to the grid) of all renewables would cost the average ratepayer more. The California Public Utilities Commission found the opposite in its analysis; that SB 489 would likely reduce the cost to the average consumer. That’s because farmers and commercial consumers of electricity already pay some costs that residential consumers don’t, like the cost to distribute and transmit the power. Those embedded fees make net metering for bioenergy less expensive than net metering for residential solar. PG&E’s numbers are based on the performance of solar net metering.

The other problem utilities point to is the net-metering cap. Right now, utilities buy no more than five percent of their peak energy load through the net-metering program. If more types of technology are eligible for the program, that could mean reaching the cap more quickly. If that happens, legislators might be tempted to raise the cap. For utilities, that would mean managing lots of small producers instead of a few big ones.  Nor does the energy produced through net metering count towards the utilities’ state-mandated renewable energy targets. Right now, no utility is close to reaching the cap. Most are still buying less than two percent of their power from net metering.

Supporters of SB 489 are close to reaching their goal. The bill has a broad range of environmental and agricultural supporters, including the California Climate and Agriculture Network (CalCAN) and the California Farm Bureau Federation. It won significant bipartisan support as it moved through various committees in both the Senate and the Assembly. The next hurdle will be a full Assembly vote and another full Senate vote to reconcile some small changes. Senate sponsor Lois Wolk (D-Stockton) says Governor Jerry Brown has been supportive of the bill and that if it gets to his desk before the end of the legislative year on September 9th, he’s likely to sign it.