Q4 2020 saw California LCFS credit generation outpace deficit generation, with the credit bank increasing 4.8% between Q3 2020 and Q4 2020. (Note: LCFS credits are issued on a delayed quarterly schedule; the most recent credit issuance was on April 1 for fuel consumption in Q42020)
Electricity as a fuel has been increasing in its market share, aside from the dip at the beginning of the pandemic in Q1 2020
Steady credit pricing for the California LCFS in Q1 2021, with some fluctuation in Q2 2021 as credit prices dipped as low as $173 between March and April, far from its historic highs of $202 per credit.
Oregon CFP now allows the use of renewable energy credits (RECs) to claim zero-carbon electricity
Washington state is the next state to adopt a clean fuels program, aiming to reduce transportation emissions by 20% by 2035, with 2017 as the baseline
Federal, state, and regional grant programs available in California and across the country as regulators push for the transition to zero-emission vehicles and equipment
Learn about Fast Charging Infrastructure (FCI) crediting and how LCFS credits can lower your capital expenditure in DCFCs
City of Porterville, CA Accelerates Adoption of Zero-Emission Vehicles with Revenue from LCFSCredits Managed and Monetized by SRECTrade
Rapidly Advancing Porterville’s Top Priority – Improved Air Quality
PORTERVILLE, CA, April 7, 2021 – The City of Porterville and SRECTrade today announced key milestones and plans to continue reducing carbon emissions and improving air quality for area residents. Porterville is rapidly electrifying its fleet and getting paid to do so by SRECTrade via the California Low Carbon Fuel Standard (LCFS) program. In a region battling air pollution, the municipality has taken bold steps to deploy zero- and near zero-emissions fleet equipment by deploying Compressed Natural Gas (CNG) buses and electric buses, as well as light-duty charging stations that generated more than $65,000 of LCFS credits in 2020, and with higher post-COVID use could generate more than $100,000 in 2021.
As a visionary and early adopter of alternative fuels
among municipalities, Porterville, located in the San Joaquin Valley, deployed
its first CNG bus in 2010 and first electric bus in 2018. Porterville’s fleet today
consists of 10 battery-electric buses, 12 battery-electric vans, 10 200kW DC
Fast Chargers and six Level-2 public charging stations, with 14 additional DCFC
stations under construction, that reduce total cost of ownership and enable
quicker adoption, while also creating a healthier future for the community. By 2024
Porterville plans to convert its entire fleet to electric and provide more
public-access charging infrastructure for residents.
“The key was taking those first steps – it was hard work,
but more doable than anyone thought,” said Transit Manager Richard Tree. “A
wealth of resources existed to help us move forward. Getting started quickly showed
what was possible technologically and financially. We learned, adjusted, and
kept moving forward.” Tree emphasized the advantage of engaging resource
partners with the knowledge and capabilities required to help address the
challenges encountered when planning, funding, deploying, and managing
zero-emission transportation equipment and infrastructure.
These cleaner vehicles also save money. Electric fuel and maintenance costs have been reduced by about 80% and 75%, respectively. Grant and incentive programs such as the California LCFS program supported the city’s initial deployment while also providing an ongoing revenue stream and offsetting electricity costs. In the past year alone, the City of Porterville generated an average of $0.21/kWh from its electric fleet.
“The City of
Porterville has demonstrated committed leadership in its drive to reduce carbon
emissions. We’ve been happy to play our role on this very driven team,” noted
Mike Saxton, SRECTrade Managing Director. “SRECTrade plugged in to manage and
monetize LCFS credits generated by Porterville’s eligible equipment. The higher
dollars we pay organizations directly support our mission to help fund continued
deployment of zero-emission equipment.”
Porterville has set its sights on even bolder clean energy goals, exploring solar generation, energy storage, renewable electric vehicle chargers, and electric vehicle and charger programs that would help its residents make the switch to electric vehicles. SRECTrade will continue supporting the municipality through its expertise in environmental commodities and transparent reporting of the value being generated.
City of Porterville
Porterville is a city in the San Joaquin Valley, in Tulare County, California. It is part of the Visalia-Porterville metropolitan area. Located between Fresno to the north and Bakersfield to the south, Porterville serves as a gateway to Sequoia National Forest, Giant Sequoia National Monument, and Kings Canyon National Park. The city has a population of nearly 60,000.
SRECTrade provides trusted advice, management, and technology to maximize financial and environmental benefits of environmental commodities for the owners of clean transportation and renewable energy assets. We manage all credit generation and sale to get companies paid in compliance with complex regulatory programs. SRECTrade is the largest agent manager of EV assets for the California Low Carbon Fuel Standard (LCFS) and has earned an annual client retention greater than 99% with more than 54,000 unique assets under management and more than 150,000 clean energy assets utilizing its proprietary technology platform. With presence across 10 regulated markets and 20 tradable products in North America, SRECTrade helps accelerate the adoption of clean energy and clean transportation equipment by minimizing the time, cost, and risk associated with realizing program benefits.
As part of the California Global Warming Solutions Act (AB32), which aims to drastically reduce greenhouse gas emissions in the state, the California Air Resources Board (CARB) established the Low Carbon Fuel Standard (LCFS) program in 2009. The current goal of the program is to reduce the carbon intensity of transportation fuels in the state of California by 20% by 2030. Let’s take a closer look at the nuances of the program:
With most low carbon liquid fuels, LCFS credits accrue to the fuel producer. However, for electricity and gaseous fuels, such as hydrogen, the LCFS credits accrue to the charging or fueling station owner. Fuel producers and fleet owners utilizing fuel that falls below the carbon intensity benchmark in that year generate LCFS credits. The volume of credits issued is based on the quantity of fuel produced or consumed and its carbon intensity. Conversely, participants that produce or import fuel above the carbon intensity standard are required to purchase LCFS credits to make up for their deficit.
1 LCFS Credit = 1 MT (metric ton) of CO2 equivalent reduced
Eligible Vehicle Types
California vehicles that run on clean fuel (electricity, hydrogen, CNG) are eligible. This includes cars, buses, trucks, forklifts, rail, and more. For electricity as a fuel, in order to generate credits, fleet owners must own the charging infrastructurefor their electric vehicles.
Reporting Requirements – Electricity
For electricity as a fuel, fleet owners must have one of the following* to report energy consumption to CARB:
Dedicated meters (separate utility bill)
Submeters (with kWh readout)
EV charger data monitoring
*Electric forklifts utilize a different methodology for reporting, and are able to utilize kWh calculations based on certain parameters.
Estimated Values per Vehicle Type
* Gross value before costs and fees. Assumes annual consumption of 50 MWh for Class 4-8 EVs and Buses and 10 MWh for Light Duty EVs and Forklifts. Also assumes Zero-CI electricity and a $200 LCFS credit price.
Generate Additional Value with RECs
The overall California energy mix has some carbon intensity associated with it, as the electricity is generated from a variety of resources. By virtually pairing your LCFS credits with Renewable Energy Credits (RECs), participants can demonstrate to CARB that the energy utilized to power their electric fleet is renewable. This mechanism can be utilized even if the owner of the charging equipment does not have renewable energy on-site.
This sounds too good to be true. What’s the catch?
The program is intended to act as an ongoing revenue stream that helps offset fueling costs and encourage further investment in clean fuel vehicles. For electricity, certain vehicle types have general spending requirements.
How much are the credits worth?
The LCFS market is robust and growing, with plans to continue beyond 2030. Since the program is a market-based mechanism, LCFS credit prices fluctuate, but due to CARB’s compliance requirements and strong regulatory oversight, recent prices have remained relatively stable. Over the past year, LCFS credits have been valued between $190 – $200. There is a price cap set for LCFS credits and it is set at $200 (in 2016 dollars) and adjusted annually for inflation. The 2020 cap is $217.97 per credit.
How can SRECTrade help my business?
No matter your fleet size, we can help you generate additional value from your clean fleet. SRECTrade manages the entire administrative process on your behalf, from asset registration and reporting, to credit issuance and sales. We also provide an easy-to-use technology platform for you to easily view and keep track of your assets, credits, and transactions. Our strong understanding of the complexities of the market and ability to leverage our experience in the clean commodities space help you maximize your credit volume and price
Ready to start generating credits? Reach out to us at firstname.lastname@example.org or call us at (415) 763-7732 Ext 4.
On August 31st, the California state senate was unable to vote on the country’s most aggressive renewable portfolio standard (RPS) program due to the session coming to at close at midnight. The bill, SB 722, which passed the state assembly, would have required California to produce 33% of its electricity from renewable sources by 2020.
Governor Schwarzenegger had made it clear he would not have signed the bill even if it passed the senate. The governor’s main concerns were that SB 722 did not allow for enough electricity to be imported from out of state. Additionally, the Governor wanted the bill to include a solution to streamline California’s siting and permitting process for renewable energy projects. Back in June, the Governor commented that he would not, “sign legislation mandating a higher requirement without ensuring that the necessary projects can be built.”
The two main arguments here have to do with developing a vibrant renewable energy market in the state of California while also maintaining competitive electricity pricing. Importing electricity from outside of California doesn’t help increase the number of in state jobs required to build the renewable energy projects needed to meet the 33% RPS target. On the other hand, allowing for greater amounts of electricity to come from out of state will increase competition and hopefully keep prices down, something to be mindful of considering the current economic environment in California.
While Governor Schwarzenegger signed an executive order to reach the 33% target, the order could be over turned by any future governor. Although SB 722 didn’t pass, the governor could call a special session of the legislature to pass the bill before the upcoming election. This could be the only chance for the ambitious 33% target as both California Governor candidate Meg Whitman and U.S. Senate candidate Carly Fiorina are opposed to it.