Background. Through the Alternative and Renewable Fuel and Vehicle Technology Program, established by Assembly Bill 118 (Núñez, Chapter 750, Statutes of 2007), the Energy Commission provides up to $100 million per year toward the development and deployment of low‐carbon alternative fuels, fueling infrastructure, and advanced vehicle technologies.

To date, the Energy Commission has invested more than $415 million in program funding into more than 260 projects. The Energy Commission has also reviewed more than 600 proposals requesting nearly $1.6 billion in program funding in response to 23 solicitations. Demand for program funding has regularly exceeded available funding. For every $1 awarded through competitive solicitations, roughly $1.80 was requested by qualified projects.

In September 2013, the program was extended by statute through 1 January 2024.

The 2014-2015 plan. The investment plan update provides funding for a portfolio of project types, organized to reflect the supply chain of alternative fuels.

• In‐state production of biofuels. The plan provides $20 million for these alternative fuels, which represent an immediate opportunity for reducing carbon emissions because they can already be used in more than 97% of California’s existing vehicle stock, CEC noted. Furthermore, biofuels derived from waste‐based feedstocks (which are emphasized by the program) offer some of the lowest carbon pathways currently available, with some potential pathways even resulting in net greenhouse gas elimination.

  The volume of biofuel production supported through this program can be immense, given previous projects expected to produce hundreds of thousands to millions of gallons of biofuel per year. This category has also been significantly oversubscribed with qualified projects in previous solicitations.

• Infrastructure needed to support the rollout of zero‐emission and low‐emission vehicles. Assembly Bill 8 (Perea, Chapter 401, Statutes of 2013) requires the Energy Commission to dedicate $20 million toward the installation of hydrogen fueling infrastructure to support the deployment of fuel cell electric vehicles. This funding, when combined with previous awards and remaining funding from previous years, may bring the total number of hydrogen stations funded by the program to more than 40 (depending on cost).

  This investment plan update also provides $15 million to support charging infrastructure for plug‐in electric vehicles. This increase from previous years is warranted by the variety of charging types needed, the rapid increase in plug‐in electric vehicles within the state, and the potential for emerging needs (including medium‐ and heavy‐duty vehicle charging) arising in this category, the Commission said.

  The investment plan update also reserves $1.5 million for natural gas fueling stations. While many private fleets are able to incorporate natural gas fueling infrastructure into the overall costs of their transition to natural gas, some entities cannot. This $1.5-million allocation of funding is intended primarily for these entities, such as school districts and public transit districts.

• Vehicles. The first allocation is $10 million to provide incentives for fleets to transition medium‐ and heavy‐duty vehicles from diesel to natural gas. This allocation is somewhat reduced from previous years due to the Energy Commission’s expectation that the per‐vehicle incentive level can be reduced and more specifically targeted as the market matures. Additionally, when combined with funding from fiscal year 2013‐2014, there will be roughly $22 million dedicated to accelerating the transition from higher polluting vehicles to cleaner-burning natural gas vehicles.

  The investment plan update also includes a $15 million allocation for the demonstration of medium‐ and heavy‐duty advanced technology vehicles, similar to previous years.

  Deployment incentives for light‐duty plug‐in electric vehicles, as well as for medium‐ and heavy‐duty hybrid and all‐electric vehicles, are provided by the California Air Resources Board (ARB) through its Air Quality Improvement Program. As the number of these vehicles increases, so too does the demand for these incentives. The Legislature augmented funding for the Air Quality Improvement Program via a loan of $40 million from the Vehicle Inspection and Repair Fund. The Legislature also transferred a scheduled $24.55 million General Fund repayment to the Energy Commission’s program to the Air Quality Improvement Program.

  In this investment plan, the Energy Commission reserves $5 million to support the continuation of some form of incentives for light‐duty plug‐in electric vehicles into fiscal year 2014‐2015.

• Other. The Energy Commission also supports other project types that do not fall into the fuel production, infrastructure, and vehicle categories.

  In this investment plan, the Energy Commission is dedicating $6 million to support an emerging opportunities category. This investment plan will also reserve $5 million for manufacturing projects that can help translate the state’s significant venture capital investments into more permanent economic growth. Finally, this category includes an allocation of $2.5 million to support workforce training and development grants with partner agencies.

Resources

• Smith, Charles, Jim McKinney (2013) “2014‐2015 Investment Plan Update for the Alternative and Renewable Fuel and Vehicle Technology Program Commission Report.” California Energy Commission, Fuels and Transportation Division. Publication Number: CEC‐600‐2013‐003‐CMF updated April 2014