Second California auction for renewable energy

Winners in California's second auction for new renewable energy, established as part of the state's 1996 deregulation legislation, are to be announced early this month. The second round of the auction will distribute $40 million in incentives -- on a per kWh basis -- to renewables projects. They must plan to go on-line by July 1 of next year. Of that total, $36.36 million will be awarded to winning bids, and $3.64 million will be distributed as an added incentive to projects to go on-line earlier. Demand for electricity in California is far outstripping supply (page 22). The so-called New Renewable Resources Account was launched with $162 million. In the first auction, in 1998, 300 MW in wind projects was chosen out of 539 MW of renewables. Incentives on offer were up to $0.015 kWh. The second round follows approval of legislation to extend the state's public benefits charge for ten years. In the autumn, Governor Gray Davis signed a law extending the benefit, started to support renewables and efficiency under the state's market restructuring law. The charge, a tiny fraction of the average customer's bill, pays for the state credit for green power purchases, which started at $0.015/kWh and which is now down to $0.001/kWh. The law, signed on September 30, calls on the California Energy Commission to develop investment plans for renewables research, development and demonstration programs so that the state's renewables industry is self-sustaining and competitive.