The Latest on Clean Energy Fund Feedback and Design

The Clean Energy Fund extension committed $40 million to further advance Washington State’s clean energy competitiveness. Tony Usibelli and the State Energy Office are engaging industry for input to ensure a successful extension.

The State Energy Office is soliciting feedback from a variety of mechanisms. First, the Clean Energy Fund legislative language requires two advisory panels be formed – one for research, development and deployment (RDD) grants and another for electric utility grants. Second, the CleanTech Alliance and Cairncross Hempelmann hosted an open public meeting for additional feedback.

The State Energy Office is also accepting public comments through October 9 as part of the design process.

About the Clean Energy Fund Extension

Earlier this year, the State Legislature passed a $40 million Clean Energy Fund extension as part of the capital budget. The Fund is designed to expand clean energy projects and technologies statewide in a variety of categories, including:

  • $10,000,000 is provided to create a revolving loan fund to support the widespread use of proven energy efficiency and renewable energy technologies now inhibited by lack of access to capital.
     
  • $6,600,000 is provided solely for credit enhancements of advanced solar and renewable energy manufacturing within Washington State. 
     
  • $13,000,000 is provided solely for grants to advance clean and renewable energy technologies and advance transmission and distribution control system improvements for increased reliability, resiliency and enabling integration of distributed and renewable resources and technology by public and private electrical utilities that serve retail customers in the state.
     
  • $10,000,000 is provided solely for grants to match federal funds or other non-state funding sources used to research, develop and demonstrate clean energy technologies.
     
  • $400,000 is provided solely for capital funding of competitively selected wood energy conversion projects at public facilities.

To be eligible for funding, Clean Energy Fund legislative language requires:

  • Funded projects must benefit the public.
  • Funded projects must have assets with at least a 13 year useful life.
  • Funded projects must include at least a 50% non-state funding match.
  • All funds must be competed.
  • All funds must be allocated by June 30, 2017.

Read the Clean Energy Fund legislative language in the capital budget (starting on page13).

 

Research, Development & Deployment Advisory Panel

The RDD Advisory Panel met on September 18 to discuss the $10 million matching research grants program. The RDD Advisory Panel consists of representatives from:

  • Washington State Department of Commerce
  • University of Washington
  • Washington State University
  • Western Washington University
  • CleanTech Alliance Washington

 More than a dozen members of the cleantech industry also attended the meeting to observe and provide public comments.

Usibelli outlined the initial Clean Energy Fund matching grant program, including key differences allowed in the extension. For example, Clean Energy Fund grants can now match funding from any non-state source – not just federal funding. The result allows Washington State to be more competitive in securing funding from federal sources as well as foundations, nonprofits and private industry.

It is important to note that “but for” provisions still exist in the legislative language. It is not enough for applicants to show that non-state funding is available. The Clean Energy Fund extension requires applicants to demonstrate that the outside funding would not be possible “but for” the matching state funds.

Several members of industry stressed the need to balance between research, development and deployment. The feedback mentioned that it would be easy to default to research and development projects alone – but deploying new technologies is critical to long-term economic development goals.

Additional Clean Energy Fund feedback and topics are summarized in the Feedback and Major Discussion Areas section below.

 

Electric Utility Advisory Panel

The Electric Utility Advisory Panel met on September 22 to provide input into the $13 million dedicated to advancing clean energy technologies and transmission and distribution control system improvements. The Electric Utility Advisory Panel consists of representatives from:

  • Washington State Department of Commerce
  • Washington State Utility and Transportation Commission
  • Avista Utilities
  • Bonneville Power Authority
  • Grays Harbor PUD
  • Puget Sound Energy
  • Snohomish County PUD
  • Tacoma Power
  • Washington PUD Association
  • Washington Rural Electric Coop Association

Close to a dozen members of the cleantech industry also attended the meeting to observe and provide public comments.

Only retail electric utilities within Washington State are eligible to receive direct funds from this portion of the Clean Energy Fund. There are no partner limitations, however, and group submissions are encouraged. The lead applicant must be an electric utility to receive a contract with the Department of Commerce.

Usibelli made it clear that initial language focused on smart grid technologies, but the Clean Energy Fund extension is really about modernizing the electric system and deploying distributed generation assets. The addition of distributed energy into the capital budget legislative language broadens the impact of the grants significantly.

A bulk of the discussion focused on increasing and expanding applications and ways to simplify the application process while ensuring a successful program. Usibelli encourages smaller utilities to apply directly, or through partnership and/or cooperative models. Several PUDs, for example, could submit a joint application or work with industry vendors or tribal entities on an application.

Several panel members expressed concerns about the application process and requirements. The panel asked the State Energy Office to consider a longer application period, streamlined processes and a better thought out application to ensure that smaller utilities would have the resources needed to apply. The entire panel agreed that work in these areas would also prove effective in shortening the contracting and application due diligence process.

Additional Clean Energy Fund feedback and topics are summarized in the Feedback and Major Discussion Areas section below.

 

CleanTech Alliance Public Meeting

On September 29, the CleanTech Alliance and Cairncross Hempelmann hosted a free, public meeting to spur more industry feedback and input in the Clean Energy Fund extension design. More than 40 members of industry attended.

The open public meeting was very much a listening session for Tony Usibelli and Bryan Young, Governor Inslee’s cleantech sector lead. The two answered questions and listened to feedback from attendees. Most questions focused on timing, processes and the matching fund requirements. Specifically, what constitutes non-state funding (i.e., Do angel investments count?).

Puget Sound Cooperative Credit Union (PSCCU) also provided an update on the revolving loan program featured in the initial Clean Energy Fund. PSCCU has administered 974 loans and $11 million in energy retrofits as of June 30.

Additional Clean Energy Fund feedback and topics are summarized in the Feedback and Major Discussion Areas section below.

Feedback and Major Discussion Areas

The advisory panel and public meetings generated a lot of questions and comments. The summary below offers a general roundup of common themes but is not meant to be comprehensive.

The Clean Energy Fund legislative language requires that the selection process be competitive. A lot of discussion went into the best methods for attracting a broad range of applications, ensuring competitiveness and conducting proper due diligence. Timing and allocations in particular were discussed.

The two advisory panels each went over the merits of having two-or-three set application dates to give applicants enough time to prepare thought-out submissions. Allocating certain amounts of funding to certain technologies was discussed, but that was quickly abandoned in fear that it might weaken the final project portfolio or dissuade innovative applications. The panels did, however, each agree that setting aside certain funding amounts for smaller application requests would be prudent to ensure projects of all sizes are awarded.

Technology readiness levels were also discussed. Several panel members and industry leaders wanted guidance on existing vs. new technologies. The focus of the Clean Energy Fund is on technologies that aren’t currently cost effective or justifiable, but have the potential for immense impact. These technologies have a clear path forward, but need funding to get to viable commercialization and market verification levels.

One panel member warned that implementing existing technologies is a slippery slope since Clean Energy Fund allotments are small and can easily be consumed with deploying existing technologies. The result of this would make it hard to justify results if the goal is pushing new technologies to commercialization.

Transportation was a common technology topic discussed. Usibelli and Young both stressed that the Clean Energy Fund includes all areas of clean energy – including transportation. Speakers at each meeting agreed that including transportation projects would have a big impact.

Several meeting attendees asked if demonstration projects would continue to focus solely on batteries and energy storage. Usibelli shared that he, personally, hoped not. The goal is to get new technologies and more applications in for consideration to broaden the scope and impact of the Clean Energy Fund.

The RDD panel talked heavily on economic development requirements and outcomes. Put simply, the responsibility of the Clean Energy Fund is to ensure a successful program that delivers results for the state – not just a compliant project that meets the minimum legislative language. The Fund should very much be a catalyst for our clean energy future.

The State Energy Office is accepting public comments through October 9. Be sure to make your voice heard.

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