Assembly Select Committee on Climate Innovation and Infrastructure

How about we go ahead and get this party started? First of all, I want to welcome everybody to our first Select Committee hearing for our Select Committee on Climate Innovation and Infrastructure.

For folks who are curious about what that actually means, we were really interested this year in starting to piece through what are the emerging technologies as it relates to climate change and our environment. How does that match up with our state's robust and forward looking goals?

And what level of investment do we need to make as a community to be able to make some of those technologies viable here in the Golden State? First, I want to apologize for the voice.

This is the inevitable outcome of I think we've done 15 town halls since the end of session, which is great because that means more for you all to talk. And I want to start off with just a number of thank yous as well.

First, to the City of Healdsburg for hosting us in this incredible location here in the council chambers. Really just want to thank them for their partnership. They've been great to work with the entire time. And we have one of their council Members who will be presenting here in just a few minutes.

I want to thank our AB team that came out from Sacramento. Thank you all so much for braving the rain and making it so that other staffers and elected officials can watch this testimony from the comforts of their homes or the Capitol. And then I want to thank my team as well.

We have Meredith and Logan at the dais. We have Monica and Scott in the back. Our whole team has worked really hard to put this together and then want to thank all of our participants as well.

And so if it works for folks, we'll introduce our first panel, which really is on the Calisoga Resiliency center and Clean Energy Micro Grids. We had an opportunity to go out and tour the Kalisoga Resiliency center before this hearing.

So you'll have some technical questions that we'll have, but really broadly want to talk about the role that that has in the future of emergency preparedness in our community as well as sort of the emerging market around hydrogen and green hydrogen and how all of this can be proof of concept and really what the barriers were for implementation.

We have four folks on our front. First panel, we have Craig Horne, who's the Senior Vice President for Energy Vault. We have Tim Kamermeyer, who's the Director of Policy and Regulatory affairs for the Green Hydrogen Coalition. We have Jeremy Donnell, who is the Senior Manager for Micro Grid Strategy Implementation for PG&E.

And then of course the hometown favorite, DJ David Hagley. Who won't be spinning some tracks today, but I'm sure has knowledge that he's ready to spit as well. So first, thank you all so much for being here. I'll kick it over to Craig to really get us started on this discussion.

Make sure you turn your microphone on so that folks on Zoom can hear you.

Yeah. So I did prepare some slides, but I guess from a sequencing standpoint, I thought Jeremy had some slides that were kind of a setup so I can jump into the slides on the project and the work that Energy Vault did. We're also happy to jump over to Jeremy if he wants to lead us off.

Not that put you on the spot, but just, I don't know, in terms of.

And for folks who aren't on the tour this morning, it's a bit of dejavu all over again because Jeremy walked right through the door and Craig went, I'm going to hand this off to Jeremy. So we get to do that. That twice.

Okay, great, thanks.

Yeah. Thank you so much for being here, Jeremy.

Thank you for having me. Are those slides queued up? Okay. Okay. While I'm waiting for. Oh, there we go. Okay. Good afternoon, everyone. As Assemblyman Rogers noted, I'm Jeremy Donnell. I work for PG&E. I have now for coming up on 20 years, very quickly, a little bit about myself.

I am California born and raised, Sonoma county most of my life, never left the state. Love the state. I was. I attended Stanford University where I have an undergraduate degree in economics and a master's in policy studies.

I'm sharing that because it's going to kind of color my perspective on some of the issues that we're talking about today. Moving these slides ahead, I want to start by talking a little bit about what is a micro grid.

There is a commonly accepted definition by most parties as the Department of Energy definition, which I have loosely described up here, which is a micro grid, consists of distributed energy resources and customer loads that are in a pocket of the grid that can disconnect and operate independently to stay energized during an outage.

You may hear some other looser definitions that maybe don't even include islanding. I think it's important to make sure that we're all talking about the same here, which is a section of the grid that can isolate, operate independently and deliver the core value whether which is resilience in the event of an outage.

Many microgrids focus, like community based microgrids focus on hospitals, police stations, fire stations, kind of shared community services, or in Some cases an entire town, as in the case of the Calistoga Resiliency Center.

Moving along quickly here, this panel wants to talk about the barriers to microcosm, but as we're digging into that, I think we also really need to be nuanced about how we talk about it. I believe many of the barriers to micro grids are economic at this point.

There were some other barriers that we have worked through over recent years, and I'll talk some about that, but it largely comes down to economics, and that differs based upon the use case that you're talking about.

So here there's a lot of different ways to slice up micro grid frameworks, but one that I think is useful is who is initiating it and who's actually benefiting from it. And in this framework that I have for you here, it's 33 categories.

The first one is single customer or campus driven micro grids, like a University or an army base, something along that line. In that situation, it is the customer who initiates it. They Fund the micro grid, and they don't really even need much direct utility involvement.

So the, the regulatory framework is there, they're allowed to do what they want behind the meter. There's no barrier in that respect. And importantly, the economic barriers are not there because they make an economic decision to say, if I build a micro grid, I will benefit in X, Y or Z way.

It may be an avoided cost of outage. If they're, say, a chip manufacturer, they understand that they will have severe economic consequences of an outage. And so they say it's worth it to us to go ahead and make that investment.

Or it could just be a homeowner who says, I want to make sure that I have power just because it's valuable to me to make sure that I can cook dinner for my family, watch the game on Sunday, whatever it may be that they prioritize so they pay and they benefit directly.

There's another framework for micro grids, which is what I call utility driven microgrids. That's where the distribution utility decides that we have a deficiency in our ability to deliver for these customers. And therefore we will make the choice to go ahead and deploy a microgrid at this location.

It could be because there are severe reliability issues, resiliency issues, or sometimes it's just the most affordable way for us to address a certain situation. For example, in our remote grid program, our goal is to remove wild fire risk from our system by taking out long lines that serve small pockets of customers.

We remove the lines altogether and build a Standalone Micro Grid that actually never connects to the broader grid. And what that does is it results in a lower cost solution that achieves our end goal of removing risk from the system.

And so that works because in the utility business model, it's our job to essentially plan for the broader grid, collect money from customers and deploy that to have a safe, reliable and as affordable as possible grid. So that model works. There's a third model which I call community driven micro grids.

This is where you're serving multiple customers, but it's a community that elects to say, we feel that we have a resilience need. This code could come out of local community resilience plans and identified need by certain elected officials, whatever it may be, public safety officials, and they say we would like a micro grid here.

We have established programs and tariffs to allow that. But still at the root of it, there is an economic challenge issue. And I'll talk some about that on the next slide or sorry, two slides from now. Okay, let's talk a little bit about the utility microgrid or utility driven microgrid example.

And I'm going to keep this at a relatively high level. Craig will talk some about this, about the specific project. But the context for the Calistoga Resiliency center is that on the left hand side here you see that the City of Calistoga sits in a pocket between high fire threat areas.

The areas in red are high fire threat districts where in the event of extreme weather it is unsafe for PGE to energize lines that are traveling through there.

And you can see in the middle you have the city which is not shaded in red, meaning that it's actually safe to operate even when there's extreme winds in the area. We believe that it's safe to energize the lines inside the downtown area.

But the challenge is that the city is fed via the green lines, which are our transmission lines that come into the substation. So if we cannot power those lines and we cannot get power into the city under the previous configuration.

And so what we identified is that, okay, if we actually locate generation inside or really adjacent to the city, and then only power the city, isolate it from the rest of the grid, create a micro grid, then that Calistoga can continue to be powered in the event of extreme weather.

And when we have to call a PSPS event, and so that's a fantastic example of where the utility can recognize we have a severe deficiency that rises up the priority scale to say, okay, we have to make an investment here. And we did so in partnership with Energy Vault.

What I do want to touch on though is if you turn to the right, you can see that that truthfully outsize star, which is much larger than the City of Pelistoga is really just one.in our service territory.

And there are many cities throughout our service territory or many pockets where, you know, a micro grid potentially could be deployed. But they are again quite expensive. So we run into a situation of trade offs. I've often said that I believe that every customer has a, what we call a value of resilience.

Their value of keeping their lights on that's greater than zero. But the problem is is that we cannot actually afford as a state to build micro grids everywhere. So we have to be selective about where we do it and we have to think about how we can drive the cost down and have better partnerships. Next.

I will move on quickly trying to keep this brief to the community microgrid. So this is a community initiated microgrid that uses the utilities distribution system in partnership with a third party owned distributed energy resource.

This is a great model that I've actually spent the last five or six years of my life really focused on building this out. It doesn't exist anywhere else in California.

I do need to give credit to people who were working on this before I joined in the space in 2019, PG&E really worked with Redwood Coast Energy Authority and others on the Redwood Coast Airport microgrid concept.

It was an epic project that PG&E put $2 million in, the CDC put $5 million in and the Redwood Coast Energy Authority invested I believe $7 million of their own money to build out the concept for this new model after out of that model came PG&E's Community Microgrid Enablement Tariff.

This is a tariff that essentially guarantees that any city that has an eligible qualifying project, and trust me, those the qualifications aren't some very high bar, they're relatively low, can come to PG&E and say we would like to deploy a community microgrid here.

And PG&E must accept that provided that it's safe and meets those those bars. So it creates certainty for all of our customers and communities that we will have that partnership with you.

This eventually became the model for the California statewide tariff that was adopted under Senate Bill 1339 which PG&E really leaned into and was proud to be an innovator in that space. Along with that tariff we proposed in 2020, the Community Microgrid Enablement Program.

So what this does is really two things and I'll try and make this brief is one when it creates a dedicated staff, folks on my team and across multiple teams at PG&E that provide engineering support, advice, et cetera, to make sure that they can matriculate through this somewhat complex activity of developing a micro grid and partnering with the utility.

We want to make sure that these projects can be successful. Additionally, we provide for qualifying projects which is largely disadvantaged and vulnerable communications communities up to $3 million per project for distributes, excuse me, distribution upgrades that are necessary to enable the microgrid, the isolation devices to be able to disconnect the utility controllers communications equipment.

Normally that would be charged to a customer. Instead, what we're saying is the utility will actually defray that cost through our rates. No cost to them. That said, there are still costs that they will incur. They need to be able to build the distributed energy resources, do all the engineering, et cetera on their side.

And so there's additionally the Micro Grid incentive program. This their PG&E has $79 million in incentives to be paid out. We've actually awarded roughly $35 million of those incentives. And we're continuing through multiple tranches of awards from this point going forward. And it's in up to $15 million chunks. We're very excited and engaged in that program.

We've had 50 plus communities interested in the first tranche, 50 plus communities interested in the second tranche, made nine awards in the first one and we'll probably make up to seven awards in the second one. So we're excited to really be building this out and addressing that economic barrier.

However, this isn't necessarily a viable economic model going forward.

One thing that we're trying to do through the Microgrid Incentive Program and through projects like the CRC, et cetera, is to really poke at what is that model that will eventually work to where these things can self sustain with minimal subsidy to be able to just be a viable economic product that could be sold in the market and a self sustaining offering to communities.

So I'll leave it there.

Thank you so much. And Craig, before you go on, I also want to give a special shout out to Councilmember gift from Calistoga who's sitting in the audience as well.

Great, thank you. Well it's an honor to be here. Really appreciate the opportunity and I'm very excited to present some insight and details into the Calistoga Resiliency Center that Jeremy just provided the the background and context for. So let's see if I go to slides here. So go back up. Okay, that's the end.

So I'm Dr. Craig Horne, I've been at Energy Vault for about three and a half years. I'm Senior Vice President for Advanced Energy Solutions. Been a long time resident here of California over 30 plus years in Northern California, live in the Bay Area.

So I'm a PG&E customer and have experienced PSPS events in my communities over time and yeah really excited about being part of this project and the solution which we feel really is a path to the future and wiring the proliferation of cost effective microgrids and helping mitigate the the potential impacts of wildfires forward.

So the project that Energy Vault was awarded in 2022 from a request for offers from PGE gave birth to what is today the Calistoga Resiliency Center or CRC. It is a facility located on city owned land parcel city owned land about 2/3 of an acre just outside downtown Calistoga along the Napa Valley Vine Trail.

So the system is a hybrid micro grid generation facility comprising hydrogen fueled fuel cells with lithium ion battery storage using our proprietary Voldos energy management system that's providing the microgrid controls and operating all the different elements including the liquid hydrogen storage and distribution system that you see with the green dots.

The largest item from that being a 80,000 gallon liquid hydrogen storage tank. That liquid hydrogen contains the energy content for the facility. There's enough liquid hydrogen there to power the town for at least 48 hours during a public safety power shutdown event.

We have about 12 megawatt hours of lithium ion batteries in our 4B Vault battery units that are shown in orange and then 6 plug power GS 1540 fuel cell units that are the main engine for the facility. So in the bottom below the picture you see kind of ideals diagram of how the facility works.

Liquid hydrogen is pressurized and when the valves open liquid hydrogen is brought through vaporizers which are the tall columns, they're next to the tank there. Basically ambient heat is brought in and liquid hydrogen is only 20 degrees, 20 or so degrees above absolute zero. So it doesn't take much heat to boil it into gas.

That gas is then fed to the fuel cells, the hydrogen gas rather, where it reacts with oxygen from the air and you create water and with electricity generated as well. So it's a very high efficiency, non greenhouse gas emission approach to generating electricity and with the benefit of you're actually producing water.

The battery units are there to basically provide short bursts of power for the town or for the facility. So when we switch over and a PSPS event occurs, PGE brings the town and blacks out the town. And so the first step in our process is we blackstart the town, we bring it, turn the lights back on.

And so for that you need a big strong push of electrical force to get all, you know, all the electrical loads up and running. And that comes from the lithium ion batteries.

And then once the load stabilizes, the fuel cells ramp up behind it and take over the steady delivery of power for long durations of time with the battery units taking up any short intervals of increased power, decreased power by discharging or charging respectively.

So in that diagram and hopefully from this description you can see this facility works very much like a plug in hybrid electric vehicle. Instead of a gasoline engine with power or an internal combustion engine powered by gasoline, we have fuel cells that are energized by hydrogen gas. So that results in a 0.0 source emission facility.

Sorry, got my things mixed up here. The other thing is that the liquid hydrogen comes from an external facility. So we have that delivered. There's just with this land available, there was not sufficient area to produce hydrogen. And since the consumption of hydrogen is very low, a production facility wouldn't make economic sense for this anyway.

Okay, so the result is what we're doing with CRC is replacing a diesel genset array that had been providing the power for Calistoga for the prior four years before we came online. This year, I guess maybe five years, 2019, that with a new solution that has several advantages that I highlighted here.

You know, it's clean, it's low nuisance, we have fast response and flexible. Another big advantage by being a clean facility, we don't have to worry about emissions and emissions restricting the number of hours we can operate.

So what that really does is open the table of possibilities and to get more of the facility and than just providing the resiliency, the benefit to the community and ratepayers is now this what we're providing rather than more than just the resiliency benefit of the diesel gensets.

And I think that's the pathway to affordability is doing more in that same situation. And in this case with the lithium ion battery front end that we have as a high efficiency energy storage device, we can participate in the energy market and earn revenues from doing that.

And that helps pay off the system, which means we can charge less for the resiliency service that we're providing. The other thing is there is a local benefit to the distribution grid by having inverter based units there, providing some local electrical push.

So that's more of a qualitative type benefit since it's not something that's in the Caliso market to begin with. We have a two day duration which is roughly twice the duration that you have with the on site storage within the diesel, within the diesel trailers.

And we can extend this duration by bringing in more liquid hydrogen from delivery trucks and putting that in the tank as we're drawing to energize the fuel cells. So it's extensible duration is how we term it. And that's a significant benefit over just pure battery storage for a facility this size.

And also we have a much higher energy storage density than lithium ion batteries or a full facility lithium ion batteries. So, you know, we've had a great partnership with the Calistoga community. We've done several different approaches towards, you know, being partners in the community. We had a very open approach. With.

Folks in the community about what the project is, the purpose of it, you know, how the principle of operation and the codes and standards that we've adopted from multiple industries that have worked with and handled hydrogen and liquid hydrogen over several decades in a safe, safe manner. So we've.

Earlier this year we worked with the local high school, Calistoga High School and the science classes there to give students tours of the facility, inform them about the potential of hydrogen to supplement what they were learning and in class on batteries and fuel cells and letting them see a project in real life within their community and helped them educate themselves really on hydrogen safety and develop public service announcement material for the community such as you see here on the right.

We've also been actively engaging by having tables at the local farmers market every week. We've had several open houses on our own and in conjunction with PGE across the way, as well as other activities.

We found that that's been a very beneficial, you know, this effort has really, you know, produced a lot of benefits not only for ourselves and helping our project get through and have things happen in a timely manner, but also just, you know, feeling within the community of being proud and happy to be a part of this really first of a kind type facility that first in the world.

So this is just a quick timeline here. You know, it's been about two and a half years from start to finish here. We are now under operation on our microgrid contract with PG&E.

There's still yet another step in the life of the system and that is next year we will be fully interconnected to the grid and that's where the secondary benefit of participating in the Cal ISO market and having a secondary source of revenues comes into play.

We'll be able to provide capacity to the market which has benefits both on a local level as well as overall market level. We do see this as not just a one off type project.

We have kind of productized the solution into what we call H-Vault and the benefits here for emission-free multiple-day clean power that can be delivered safely and help communities and critical load facilities, data centers, manufacturing facilities, all have resiliency at a very effective cost with no emissions and help pave the way for them to get their projects embedded in the community.

We have had, we were able to raise project financing on CRC which is very notable. That means we are a bankable solution. So to deploy this you don't have to just balance sheet the overall capex of the project.

So that's a very critical step and milestone in being able to have a solution proliferate through not only here in California, but nationally as well as in different regions around the world. And yeah, so that's it. And happy to answer any questions and I appreciate your time. Thank you.

Great. Thank you so much. We'll have questions but first I'm going to go to the Council Member and also representing Northern California Power Agency as a Commissioner, David Hagley. You want to talk about Lodi? Sure, go for it.

All right, let me get is my slide next? There it is. All right. Thank you for hosting me. I'm just getting over a cold, so my voice is very berry white today. So. Good afternoon.

My name is David Hagley, a City Council Member for the City of Healdsburg and I'm here today to talk on behalf of the city. I'm also Commissioner of the Northern California Power Agency and chair of its Legislative and Regulatory Affairs Committee.

Healdsberg is a charter Member of NCPA and has been a proud participant since the agency's creation nearly 60 years ago.

Given my active involvement in NCPA, I've been asked today to provide an overview of the innovative work being pursued by the agency and its members to use clean hydrogen for power generation at the Lodi Energy Center or LEC. But first, a brief background on the agency.

The Northern California Power Agency is a not for profit joint powers agency that represents and helps meet the public power the power supply needs of 16 Member communities and special districts in Northern and Central California.

We were founded in 1968 as an agency through which community owned utilities like Healdsburg can make investments to create an affordable, reliable and clean future energy supply for the communities we serve. We have a long standing commitment to generate electricity from environmentally responsible sources and stewardship is a founding principle of the agency.

We manage investments that generate electricity using geothermal steam at the Geysers, a hydroelectric power system in Calaveras County and a State of the art natural gas plant in Lodi.

Each of these investments aligns well with NCPA member desires to serve our communities with clean energy resources, but also supports broadcast broader statewide efforts to integrate renewables into the California grid.

We also partner with other organizations across the state to power provide power management support and NCPA now schedules 12% of the state's overall electric load into the California ISO.

With that, let me turn to the Lodi Energy center and the innovative work we are looking to do to transition the plant to the use of hydrogen for power generation and why that's important.

Since its startup in 2012, the Lodi Energy Center has been among the cleanest and most efficient natural gas-fired generating facilities in the United States, providing much needed power to growing communities across the state.

It was one of the first plants in the nation to use fast start gas turbine technology, providing a rapid response to market and grid conditions, supporting grid reliability and keeping electricity costs more affordable.

Equally important is Lodi Energy Center's ability to support the growing use of intermittent resources in California like solar and wind, which clearly aren't available 24/7 innovation has always been synonymous with the work of NCPA and at the Lodi Energy Center, and NCPA's focus on the potential use of clean hydrogen for power generation fits well within the organization's culture and the history of the project.

My city, the City of Healdsburg, greatly values its participation in the Lodi Energy Project and I'm confident that other project participants share the sentiment. So let's talk about hydrogen at the Lodi Energy Center.

The Lodi Energy Center Hydrogen Project includes the construction of an on site hydrogen electrolyzer that will enable power production at the Lodi Energy Center, promote hydrogen fueled medium and heavy duty truck traffic along the adjacent Interstate Highway 5 and 99 corridors and provide a source of hydrogen supply needed to reduce emissions.

At the Port of Oakland, who is also an NCPA Member, the project has a readily available on site source of reclaimed water that serves as feedstock for electrolytic hydrogen production. The LEC is presently capable of operating using a blend of 45% hydrogen and 55% natural gas.

It is shovel ready today and could be quickly enhanced to make this available. This capability a reality well within the timelines needed to support California's clean energy objectives. According to our technology partner Siemens Energy, technological changes to the equipment will eventually lead NCPA to a full transition generating power. I'll say that again. Generating power using 100% hydrogen.

The transition from natural gas to hydrogen at the Lode Energy Center is important for many reasons. First, it protects public investment and facilities as state goals change. It also prolongs the jobs that the Lodi Energy Center provides for a robust local workforce.

From a carbon reduction lens, the project will help the Lodi Energy Center project participants meet and or exceed statewide climate emissions goals. Finally, regarding transportation, the project will significantly reduce emissions on local adjacent highways and at the Port of Oakland in operations and shipping.

Without question, the transition to hydrogen at the Lodi Energy Center is vitally important to NCPA Members and the State of California. Lodi Energy Center's Combustion Turbine Hang on, let me back up there. Lodi Energy Center's combustion turbine is ready today to blend hydrogen and natural gas for power generation.

However, the hydrogen production and acquisition is currently an expensive Proposition. Recognizing the long term benefits of pursuing hydrogen, considerable financial assistance is necessary to make the project economics viable. For the Lodi Energy Center, $225 million is needed for an electrolyzer that would produce hydrogen on site.

NCPA was on track to obtain critically needed funding from the federal and state government to support the project. Going forward until the beginning of 2025, we appeared to be on track to receive a substantial portion of what was needed.

We were expecting 35 million from the US Department of Energy as a tier one project in the state's Arches Hydrogen Hub. We were also looking to obtain another 15 to 20 million dollars from the state through the Clean Hydrogen program offered by the California Energy Commission.

Adding to this financial support were Clean Hydrogen tax credits available through the U.S. Treasury Department to significantly reduce capital investment cost costs. Things changed dramatically this year.

The U.S. Department of Energy earlier this year cut the $1.2 billion award that was designated to Arches and the State of California, which eliminated the funding source that are so critical to the success of our hydrogen transmission at the Lodi Energy Center.

Regarding the tax credit, Congress voted this year to change the deadline associated with qualifying for such credits, making its use unworkable within CPA's project timelines. Adding to the federal challenges were pullbacks by the California Energy Commission associated with the agency's funding under the Clean Hydrogen program.

Funding challenges, combined with the changes associated with the timing of the federal tax credit eligibility have effectively made it impossible to move forward with the project at this time. The limitation to commence construction by January 2028 to be eligible for the tax credit was too limiting to allow for permitting.

Even if these issues were addressed, it remains unclear what the full context of trade tariffs will have on the cost of constructing an electrolyzer at the Lodi Energy Center. What is clear is that these policy changes have created uncertainties that make it difficult for NCPA to proceed in light of these changes.

So to wrap up, NCPA is continuing to work with ARCHES to advance policies in California to facilitate the hydrogen transition. The Agency remains confident as an organization that this project will go forward, but its deployment will move further into the future, as noted throughout my remarks.

In the meantime, NCPA is actively working to ensure that state policies are in place to facilitate a future transition to hydrogen, and we ask for your support.

This includes ongoing efforts to assure the recognition of hydrogen within the state's Renewable Portfolio Standard program by ensuring that the state policy groundwork is in place for future investment in this area now, we can be prepared to deploy this resource to support California's growing power supply needs tomorrow.

Thank you for the opportunity to share our thoughts with you.

Thank you so much, Councilmember, and thanks for having us here. Go to Tim.

Good afternoon, Chairman Rogers, welcome. As you can hear, my voice also is a little congested, just like the Council Member.

We're a cool club.

I would argue it makes it sound a little deeper and my wife would probably appreciate that. So Good afternoon Chairperson Rogers and those Members that are attending virtually, if you are, my name is Tim Kammer. I'm the Director of Policy and Regulatory Affairs for the Green Hydrogen Coalition.

We are a 501c3 nonprofit focused on the deliberate and thoughtful deployment of renewable hydrogen within California and other states. And we do work across the globe as well, creating international dialogue in order to try and find cooperation when we're trying to build within California. Chairperson Rogers, I just want to start by thanking you for holding this Committee.

I think that this is a rare opportunity and when we talk about Green Hydrogen, one of the many things we speak about is the need to highlight when good projects are successful and are bringing benefits to the community. For us, that's the Calistoga Resiliency Center. I also have to thank you for letting me speak last.

I feel like I get to put a ribbon on such a brilliant panel. Getting to listen to Jeremy talk about how PGE was coming up with a solution for a problem they had noticed and then we have Energy Vault stepping in as the developer.

It shows that there is opportunity to address resiliency, reliability and in a carbon free matter. What I would note that is when you hear these discussions it might seem like a flash in the pan. As they've noted, this was a unique instance for PG&E, but I would notice Craig said it's not. We can replicate this.

I loved hearing about H-Vault because for us at the GHC we view this as a possible blueprint. Obviously not everything's going to be perfect in the same way that Calistoga had it set up, but there is lessons that can be learned and there are opportunities for development.

As you heard from the Council Member, renewable hydrogen and renewable energy generally have taken a hit. It is very clear that the Federal Government has shifted away from renewable energy policy and in many ways that has made it incredibly challenging for green hydrogen to be produced.

But it's like that for all renewable energy and it's not a death sentence. Chairperson Rogers I can tell you last week I was in Denmark where California has a memorandum of understanding with that country and and I saw what it means when we say renewable energy.

It is inevitable when we say that this is where it's coming because all of Denmark operates on a circular economy where their landfill and their waste and their biomass are used to not only create district heat but also renewable clean hydrogen which they then use to make clean ammonia and Clean Methanol, all things that are needed in order to decarbonize a hard to abate sectors.

At the ghc we say electrify everything, let green hydrogen take care of the rest. And that's because there are certain places electrification aren't going to get us things. Things like maritime shipping or agriculture in the rice fields that require ammonia or how we build concrete and steel.

These are all instances where a decarbonized pathway is necessary and can happen. It's not just in Denmark.

In California, renewable green hydrogen is already being produced, not at the scale we all would want at this table, but it is occurring to get it even better so that organizations like NCPA don't have to go it no longer economically Makes sense to do something we generally want.

California has to look at other alternatives and ways to try and reduce the cost to make it easier for developers. One of those, we would say, is your Bill, Assembly Bill AB388, which specifically was trying to address the behind the Meter issue. And let's be honest, there are certain California policies that can be fixed.

Right now, the behind the Meter issue is very simple. If you have a large scale or solar field and, and then you have down the street your hydrogen electrolyzer and you want to connect them, you're now an electrical corporation. That doesn't make sense.

But it's the type of policies that we need to step into, look at and say, okay, why was this originally created and how can we get around this so that we're helping developers, but we're not breaking down the original intent of it.

I think that your Bill and your efforts, assemblymember, are the way we need to get there. So I would thank you for this. I welcome all questions and I would note that innovation starts with collaboration. Thank you.

Yeah, thank you so much for being here.

So I'm going to jump in with a couple of questions and really, Craig, I want to start with you because one of the things that I found really interesting on the tour and I'm hoping you can talk about it, is not just the amount of energy that you're able to produce with the green hydrogen solution, but the density within which you have that energy being able to be produced.

And so what you heard from the Council Member about, they had looked at other options for resiliency, including solar arrays or community solar farms, and end up going this direction for hydrogen. So can you talk a little bit about the deployability and the scale of these types of facilities?

Yeah. So with the RFO, there was the opportunity to work with the City of Calistoga because there was an interconnection hub that was in place for the diesel genset array. And the city had a relatively small parcel, about 2/3 of an acre, relatively close to that hub that was.

And they were willing to entertain bidders in coming to agreement to use that land for their projects. The energy requirement, or part of that RFO was the solution had to be able to power the community for 48 hours with load growth over the life of the contract, which would go to like, you know, the mid-2030s.

So that resulted in roughly 300 megawatt hours of storage requirement on 2/3 of an acre. You know, that's almost 50% higher energy density that you would get just with lithium ion batteries by themselves at the time of this, at the time of this offer due date.

So at Energy Vault we came up with a concept of going to a higher energy density solution with liquid hydrogen and then fuel cells which have a megawatt scale, low temperature PEM fuel cells which are very flexible in their operation were just coming available as products and they have a very high power density.

And so the combination of that high density liquid hydrogen storage and using molecules rather than an array of built cells and high density, high power density fuel cells really was enabling with, you know, as a solution for this parcel of land that the City of Calistoga made available.

And I will say that was one of the things that we were the most struck by was just how small the parcel was for a facility that can run an entire City for 48 hours and just that efficiency in land use that is associated with it as well.

And I want to touch a little bit on something that kind of was hinted at or touched on across the board. Jeremy, you talked about PG&E's investment in the self-sustainability model, but you also didn't want ownership over the whole facility.

Councilmember, you talked about how in Lodi without the funding it didn't end up penciling and you have that commitment, but without that support, that was gone. And then Craig, you mentioned that it didn't make financial sense for your project moving forward to have on-site production of green hydrogen and it's easier to procure it from elsewhere.

And so Tim, Craig, David, Jeremy, can you all kind of just talk a little bit about the creation of green hydrogen and the economic structures that currently exist to incentivize and maybe talk a little bit about how expensive it is right now, why that is the case and if there's anything that you see in the supply chain that we could be looking at to make it more economically viable from a production standpoint.

I hope that makes sense.

Yeah, yeah, let's see. I guess maybe you could start off with just from the perspective of the CRC in this project with respect to hydrogen production. So, you know, the, you know.

Yeah, so an electrolyzer, the other equipment for generating hydrogen would have a, you know, a certain, you know, there'd be capital costs associated with it as well as, you know, land use require or area of land that would be required that could, that could potentially fit for a low level of production that could accumulate over time.

The more challenging aspect though would be to liquefy that hydrogen because electrolyzers produce gaseous hydrogen the liquefaction plant really likes to run 24/7. And as a resiliency center, one of the key things with Calistoga is that we're using molecules as, you know, backup resiliency for when the power is needed.

So we don't consume a large enough amount of hydrogen for a liquefaction plant to kind of make financial sense. We just don't have the demand there with this one facility. Now, if you go to the future, as you had more of these facilities around and they all have.

They're being dispatched at different periods of time now in aggregate, you could start having enough demand that to have a central facility that produced the, you know, basically electrolyzed water and then liquefied it into liquid hydrogen and then went and supported the different resiliency centers as they were dispatched. That could definitely make sense.

So really what CRC is, is it is a pilot project that shows the potential that you can make this kind of technology, combination of liquid hydrogen distribution storage, stationary fuel cells and battery energy storage and microgrid technology all come together in a resiliency form.

Now that we're doing it now, you can start scaling that up and improve the overall macroeconomics as you get that ecosystem in place.

Yeah, if I could comment on that, I think to what Craig said is really insightful. Here we have a bit of a chicken or egg problem that everyone likes to say, right, who comes first?

A mass amount of supply that makes the demand show up because it's cheap, or a mass amount of demand that the supply just shows up regardless. And then it hits economies of scale. I think either one is going to get you there.

But in terms of what can the Legislature do to actually move some of those policies, how can California move forward? I think it's one ascertaining what kind of opportunities in things like the Calisthenia Resiliency center exist in California. What other communities are interested in this? What are the barriers to those other communities?

You know, Jeremy talked about the micro grid tariff, which I think is a great idea. The next part though is working with these communities to better understand are they aware of it and can they utilize it? Is there unique challenges for them?

I think building out a smaller scale of that not only creates proof of concept, but it starts populating. It starts making the message a bit more clear for folks. And then I think the other part is that, you know, we talked about this.

There has to be on one part a reduction in developer policies such as the AB388 over the fence issue. But there also has to be a demand signal. One of the things the GHC talks about as a demand signal is coming up with appropriate places where renewable hydrogen makes sense.

For example, one of the ones we have talked about is in the renewable portfolio standard, the RPS guidebook, which is talked about using renewable hydrogen within fuel turbines. This would allow many public owned utilities that have those fuel turbines to utilize, that start decarbonizing their power generation and create a demand signal for renewable hydrogen.

The opportunities are there, but a little bit of it is getting all the parties in the room to agree that they want to work on it.

Yeah. And either Tim or David, if one of you wants to, after, I'm going to give Jeremy a chance to answer as well. But after that, maybe dig in a little bit on the RPS portion and specifically the request from NCPA and what you guys are looking at. But Jeremy, I don't know if you wanted to respond.

I can't speak very deeply from the green hydrogen perspective. My area is microgrids. But what I can say is we were excited to embrace this project because it was an opportunity to create a new partnership and, and to support a new technology.

We had proposals that came across our desk that were proven technologies would have been easier to develop. We would have known that it would have worked, it would have been a much easier pathway. But I love the fact that I live in a state and work for a company that embraces innovation and moving things forward.

And so we took that and we ran with it. And so we're excited about all the energy and attention that it has drawn, the momentum, the little momentum push that is given for the space. And so yeah, we're absolutely 100% behind this.

And you shared with me kind of what the production cost right now is for a gallon of hydrogen. Can you just share with the public?

Yeah, actually that was Craig earlier, but I believe what he said was $13 to $16 a gallon or even higher. And so one thing about this project is we really wanted to embrace clean energy. So we weren't interested in gray hydrogen. We actually made it more difficult on Energy Vault and said we want green hydrogen.

So that's part of what's driving their costs a little bit.

Can you explain that distinction for folks who might not know the differences in the colors of hydrogen?

Yeah, so gray hydrogen is hydrogen that actually emits fossil fuel in the production of the hydrogen. So you, you can do so by burning natural gas or some other method. Green hydrogen is produced entirely through clean resources, renewable energy.

I will say that was the other thing that was really striking about the project is that it's right up against a dog park and there's a baseball field that's right there as well. But because it's a zero emission facility, that's actually safer than some of the other options that you considered. Hagele.

Yeah so on the cost side, I think it's pretty clear that we need state or federal help to get this off the ground.

You know, I don't have all the details down to the specific numbers with me, but on a, from the bigger picture, when you're looking at the role of the Lodi Energy Center and how it plays in the California energy market with the fast fire startup, to be able to just, you know, it's available, we can create, generate power when the grid needs it to be able to do that and run it longer during the day when we can capture the wasted energy that's, you know, from curtailed energy from solar that's just gone. There's too much.

We don't need it to be able to capture that and generate hydrogen on site using the recycled water that's right next door and then to be able to store it and to be able to use it for the transportation corridors, the Port of Oakland, some of these other things that we talked about, I think that's where you're really going to see long term the benefit where this curtailed energy that's just being wasted away can now be monetized and put back into the market and captured. I think that's really the key.

Tim, last word.

I would just completely agree with David. I think that we have an opportunity to use the curtailed energy we have in California and there is so much more abundant resources than we're even aware of. We know that California is going to continue to procure more solar, more offshore and more batteries.

So let's find ways to leverage it because to David's point, if it's not being used, it's just being wasted. So better and inefficient use to bring it into hydrogen so we can shift loads and start decarbonizing other parts of our sector than just letting it sit there. Thank you, Assembly Member.

No, thank you all so much. Really appreciate it. And we will certainly have some follow ups and want to continue the conversation with folks. But we'll be done with our first panel now. And bring up our second panel.

Making the shift from talking about resiliency in green hydrogen to now talking about water infrastructure and resiliency and some of the emerging technologies around that.

So we'll be talking about a partnership between the City of Fort Bragg and Oneka Technologies, which is getting ready, actually will be out there tomorrow to see some of the deployment of the first wave of wave powered desalinization demonstration projects for California.

Really harnessing the ocean for an electricity and energy intensive process that has previously been more of a challenge. So I want to welcome Glenn Farrell, who's the Executive Director of the California Desal Association, and Dragon Tutik, who is the founder and Chief Executive Officer for Onika.

So, first of all, thanks for being here and we're looking forward to being out there tomorrow in Fort Bragg. But we get a little bit of a preview today.

And make sure to turn on your microphone. That way people can hear you.

All right. Good afternoon, Mr. Chair and team Rogers. Thank you for the opportunity to participate this afternoon in your select hearing. My name is Glenn Farrell. I have a legislative advocacy practice in Sacramento, GF Advocacy. Really kind of focus on water, energy, agricultural issues.

But in addition to that, I serve as the Executive Director of Cal DeSal, which is the statewide industry association focused on education and advocacy related to desalination issues. So, I was hoping to just kind of—the star of the show here is my colleague...

But I wanted to kind of at least give a preface and a preview of kind of how we get to where his innovation and his creativity and his project is really important for California, if that's okay. Let's see if I can do this though. All right. Wrong way. There we go. Okay. It's almost inevitable, right?

Whenever I sit down and talk about water resilience and the need for addressing drought resiliency, it's pouring rain outside, and that's the case today. But nonetheless, I mean, it's kind of a microcosm, actually. It's interesting to see what's happening today in that all this precipitation, which is a ton of precipitation, it's all coming down as rain.

There's almost no snowpack associated with that. And so, it's kind of the dynamic that California water managers are facing today. A very, very rapidly changing climate, hydrologic cycle, precipitation patterns.

All of this is like in real time happening for water managers and trying to figure out how to deal with water resiliency so that we can deal with the drought situations, which are really dramatic.

You know, it's one of these situations where the state faces, I think you've all heard this, wetter wets, dryer dries, and that's what's happening. We're at warmer temperatures, diminishing snowpack, and so, really important to try to find ways that we can manage those supplies in a more resilient and climate adaptive manner.

The Governor has done this a lot during his tenure. He's really focused on water resilience portfolio, development of a water resilience portfolio, a water supply strategy for a hotter and drier climate. And so, he's kind of recognized, his Administration has recognized that, you know, we can't just go along the way we're going.

This is not going to work out. We don't have the infrastructure, it's really ill equipped to deal with the climate changes that we're facing. The precipitation powers and the hydrology that we're facing today.

And so, his water supply strategy focused on quantifying some water supply production targets as well but also focused to continuing focus on aggressive water use efficiency ethic as well, which California has done really well.

But you can see in his water supply strategy where he's outlined increases in recycled water production, stormwater capture, but also desalination production with targets in 2030 and 2040.

And that's really kind of bolstered by SB 72, which you and your colleagues passed earlier this year by Senator Caballero to require DWR, the Department of Water Resources, to update the California Water Plan to provide targets for 2040 water production of 9-million-acre feet and additional water supply and new water supply planning targets for 2050.

So, all that's coming together at the same time that we're trying to figure out how do we even manage the system, you know, where we're getting all of our precipitation is rain, very little snowpack, and having massive challenges of even moving water through our system from north to south, east to west, you name it.

Very, very difficult challenges. So, that's where the desalination kind of role comes in. As I mentioned, Cal DeSal is a statewide industry association. We're celebrating our 15th birthday this year.

A group of very forward thinking water managers in Southern California created Cal DeSal to really focus education and advocacy at emerging stages for desalination, focused not only on seawater desalination, which gets all the attention of everything, but also brackish water desalination, loss of salinity management issues. You know, we have those throughout the State of California.

And so, that's what Cal DeSal is engaged on. Cal DeSal, you know, we fully recognize and we acknowledge that desalination is not a panacea, it's not a silver bullet for everyone. But it is important opportunity in targeted communities and in targeted need situations. And it's particularly because of these factors.

It's local, it's reliable, it's sustainable, secure, it's drought resilient, it doesn't require importing water from long distances from Northern California to Southern California, you know, from Sierra Nevadas to the coast. It's more local and more locally controlled and reliable.

So, those sort of features make it very attractive for some communities in the state to take advantage of desal opportunities. Seawater desal is kind of like the focal point of all conversation about desalination. Obviously, because we have 800 miles of coastline, there's a lot of new technological advancements that make desal an attractive opportunity.

But I think reality is that it's very, very, very difficult to do this in California. The Claude Bud Lewis Carlsbad Desal Plant is really the poster child for a successful desalination plant development in California. Down in San Diego, county, it produces about 10% of the region's total water supply.

So, that's like the big seawater desalination project in California is about 56,000 acre feet of year of water supply, and you can see that of the 12 seawater desal plants in California, the total capacity is about 61,500. So, you're only talking about the rest of the 11 are about 5,000 acre feet worth of water supply.

So, really, really, really tiny projects. Project number 12 is the Carlsbad plant there on that, on that map, that's the one that basically represents California's seawater desalination. There are a couple projects in development. There's one in South Orange County is called the Doheny Desalination Project.

There's one in the Monterey area, Monterey Peninsula Water Supply Project by Calam California American Water. Both of these are about 5 million gallons a day project, so that's roughly 5600-acre feet of water a year. Relatively small when you compare it to a 56,000 acre feet a year supply project of Carlsbad. And these are very different technologies.

Carlsbad is kind of a conventional, traditional open ocean intake sort of facility where these are advanced land wells with subsurface intake, so they're below the sea floor as where the intake occurs of water. So, minimizing marine mortalities and protection of the environment. But they're much smaller scale.

It's really hard to scale up that kind of a technology affordably. As I mentioned, brackish desal is also a big piece of it. Seawater desalination gets all the attention, but the real star of desalination in California is brackish water desalination. You can see there's projects throughout California from northern to Southern California.

Right now, it's about 106,000-acre feet a year of water production through brackish groundwater desalination. By 2030, the governor's water supply strategy projected a target of 28,000-acre feet. We're going to be already over that. We're already at about projecting 39,600-acre feet of brackish groundwater development. There's brackish surface water development.

It's a new project online at the City of Antioch. And then, but then when you look at the 2040 number, the target is 84,000 additional acre feet, we're projecting about 500 right now. So, you can tell there's a, you know, 15 years.

There's a lot of work needs to be done to be able to get to hit that target of brackish groundwater development to meet that goal. A lot of challenges and opportunities for desalination, as I mentioned and alluded to, it's very, very difficult. The permitting timelines are enormous. You just look at the Carlsbad project.

It took 14 years from project initiation to the time it came online. The Huntington Beach project took 17 years from the time it started to the time it was denied a permit by the California Coastal Commission.

So, you know, with timelines like that, you can just see why it's hard to find investors who are willing to invest in California and desalination. It's just the permitting pathway is so exceedingly challenging, difficult, and time consuming, very expensive.

Nonetheless, I mean, there's a lot of work that we're doing to try to continue to have opportunities, keep the pathways open. There's a lot of other desal. As I mentioned, there's two subsurface desalination projects underway in Orange County and Monterey County.

So, we're really spending a lot of time focusing on science of desalination, you know, looking at integrating renewables and minimizing carbon footprint. You know, it's really exciting to see what's happening in the energy world. You know, it's almost inevitability that we will get to a point where these desalination projects will be fully integrated with renewable.

There will be a minimized carbon footprint associated with their water supply production, but all that comes with affordability challenges as a very, very expensive supply. But it's, but it's actually very closely in line with the cost of a potable reuse project.

So, you know, energy is the driver, the cost driver for all those sorts of advanced water treatment technologies. So, that's a focus point, is trying to deal with affordability challenges. The State Water Resources Control Board is beginning to revisit its California Ocean Plan, looking to amend that plan over the next couple of years cycle.

There is some concern about that process, just about some of the seeming disconnect between the administration's policy pronouncements on desalination lined up against some of the proposed amendments to the California Ocean Plan that seem to diminish opportunities and restrict and limit opportunities for desalination, even when, you know, there is sound science and when there's a reasonable path forward.

So, it's an emerging sort of issue, but there's a lot of work going on behind the scenes on that front. And so, that kind of leads us to where we are today, looking at all those challenges and, you know, just kind of recognizing that there is not people clamoring to come to California to do conventional desalination projects.

But that being said, there are opportunities and there are interests who are coming to California to explore alternatives. And so, we're really proud. Cal DeSal is really proud to have Unica Technologies as a member of Cal DeSal, really exploring innovative approaches to desalination that may make sense in some communities.

They're not necessarily large, large scale projects, but they're scale that makes sense for water resiliency, climate adaptation, and communities along the coastline. In addition to...venture, there's others that are doing different sorts of offshore desalination pilot projects.

There's an ocean well, there's a company that's doing a pilot project with Las Verdenas Municipal Water District down in Ventura County. They're exploring what those are there. They're called wells that they anchor to the ocean floor and they can generate desalinated water right there without a conventional facility on shoreline. And there's other companies as well.

Sea Well's another one. But that's kind of the preface and the preview. And I'm really excited to hear our friend...venture. And so, I'll turn it over to him and happy to answer any questions. Thank you again.

Very well. I'm not sure which way to go.

Yeah, it works. Actually. This is not another presentation. Just go all the way back, I think.

There you go.

Sorry. So while I scroll this out, first of all, thank you so much for. So it's maybe a bit difficult focus while we switch all this out. There we go. We had a quick snapshot. So my name is Dragan Tutic, CEO and founder of Onika Technologies as a Member. Thank you so much for having us here today.

Thanks a lot to Glenn and Cal Diesel for all the help throughout the years. So we're onyca. Our mission is to make the oceans a sustainable and affordable source of drinking water. And we do that through wave powered sustainable desalination.

And we're pleased to be here today to present you some of our work, but more specifically also some of the work for the Ford Bragg project that hopefully can serve also to facilitate future projects throughout California. So who's Onika?

So the Glenn already presented conventional desalination, so I don't think there's a lot of detailing here, but essentially converting most cases fuel or energy into drinking water with many energy conversion steps. And ironically, this approach can compromise even further access to drinking water with all the CO2 emissions it generates.

While at the same time when we look at the ocean, it has this abundance of seawater and at the same time it has a lot of energy in the form of waves. So why not combine those two elements together to provide to transform that seawater into fresh water for coastal populations? And that's exactly what Onika does.

So we do combine waves and energy to turn waves into water. It's a system with no electricity at all, no energy cost, and with a lot of simplicity.

And what we mean by simplicity is that we've eliminated most of the components normally included in the desalination plant, including the power, which is typically one of the largest portion of the desalination. No energy conversion. And we directly pump the seawater through reverse osmosis membranes that generate the fresh water. So as a system, it's installed offshore.

So here we see one unit as we're doing in Fort Bragg as of now. So the unit is installed offshore, it has an anchor to the seafloor, and as it wobbles in the waves, it produces the fresh water and sends it to the coastline with an underwater pipe.

So for the coastal users, they get drinking water right from the ocean. It's like a tap in the ocean with no greenhouse gas emissions. It doesn't use any land and we'll dive a bit deeper into them. But the salinity is a lower concentration, it's well diluted. The intake is also protective of the marine life.

And on Top of it, it can be moved and decentralized to produce water where it's needed, without the need for large infrastructure to move the water around between coastal communities. So when we dive a bit deeper in the unit itself, so what you see in blue in the middle, it's like a thick rope that is taut.

And as the buoy moves upward, it pulls on that rope and it actuates a cylinder in the middle. It's like a big bicycle pump with different materials and size. And that actually does that cyclic motion of the waves to do the whole process.

And we have other components to smoothen the pressure and the flow within the system and for the environmental aspects. So the brine is really well diluted within 10ft. We meet some of the local requirements in terms of dilution.

So where the Criteria normally is 100 meter, in this case it's about 2 meters, so roughly 6 to 10ft to meet the same requirement of salinity. The intake, it's a really fine mesh. We can barely see the pores in it. It's actually smaller than most fish larvae or eggs.

So while it protects our system from impurities of water, it also protects marine life. And it's a real technology, it's not just render. So in 2022, we delivered the first liters of fresh water to the coastline in Chile. And it survived the worst conditions that happens in Chile every 10 years.

And more recently in Canada, we tested it in the worst conditions for a 10 year storm in Chile. For our full scale system, which is the one that you see here, this is one iceberg unit. It's the same system that will be installed in Fort Bragg.

That system that you see here is actually installed right now in Florida and producing water. So it's really a pleasure to work with the City of Fort Bragg that unfortunately faced water scarcity.

Really in 2022, they had a really severe drought where they had to deliver an emergency water by truck to neighbor communities, including Mendocino as well, they actually installed a brackish water desalination plant as the fresh water gets mixed with the seawater when there's too little fresh water. So they had to install that.

And they're looking to be more resilient to climate change, find new ways to supply water. And by looking at the ocean and its own energy and seawater, we are part of some of the solutions to face that water scarcity. So as the project overview, it's really one unit that would be installed about half a mile offshore.

It's going to be a 12 month deployment to be able to show all the aspects, how it relates to the environment, but also the performance of the unit as well. So one of the aspects that has been most of the work so far was on the permitting side. There's essentially four to 12 month projects.

It's about 36 month time frame to get that project. It's not yet finished, but we're hopefully getting there relatively soon. But initially there's been a lot of work. And on the regulator side, there's a lot of individuals that are working hard to make this work. But it's a relatively complex system to get it sorted out.

So obvious at first we dive quantitative a lot of the details in the permitting while we do it. And even it's sometimes complex to plan so many years ahead exactly how it will be. But we're navigating this. We went with the CEQA application, we did secure state Land Commission lease for the project.

And currently we're finalizing the work with the Coastal Commission. We'll have also to get the US Army Corps, US Army Corps and US Coast Guard as well to complete the process. So for a project of a relatively small scale, we're talking about 13,000 gallons per day. For a unit, small salinity concentration.

Even with that scale, everything that needs to be accomplished is quite thorough, which is good for the environment, but a bit on top of the. Yeah, so it gives an idea. There's a lot of sequencing in the process as well. So you can't do all the permits at the same time.

So for a lot of them you had to do one after the other after the other, which caused some of the time stretch. There's also some specific timelines for some of them to be approved.

So it needs to be like on a quarterly basis or part of another meeting and sometimes just waiting the right meeting to be for this permit to be moved to the next step also causes some delay. And when you look at permitting over that time frame, there's also some staff changes as well.

And the file gets moved from person to person in some cases as well. So while this takes time, it takes time to get the first projects up and running. For us, this is key. As we get that installed, we get other folks to get to know the technology.

And our goal is to bring the solution to larger scale to more locations throughout California. So definitely the first project is starting quite a few years later. So it will delay all future projects as well. And obviously there's a lot of financial risks associated with that. So while we really.

Thanks a lot The California DWR who helped finance the project for the city to test this technology. It does mean that all the financial investments that are done in the project ahead, even before knowing that it's possible, this is really a bottleneck for any future investments and more capacity like that for the future.

So really finding a way to fast track that permitting, especially for solutions like ours or others that are good for the environment, fast tracking that will really facilitate the adoption of new water sources to make California more resilient to climate change and water, water access.

The other thing is the permitting is structured in a way, so there's the time frame and also for new technologies, including ours and some others, there's really constraint about any changes throughout the process. You need to have a lot of planning ahead and we navigate that.

But definitely some flexibility, especially for trial period can be helpful as well. But yeah, this is a great opportunity for us to be able to monitor impact on the environment with this technology and hopefully facilitate future permitting as well. Happy to answer any questions you may have and really looking forward to welcoming you tomorrow in Fort Bragg.

Yeah, thank you so much. We are actually, we're really excited to be out there tomorrow to see this. And my understanding is that we would have seen the official launch, but you ran into a permitting issue with the Federal Government shutdown.

So that's another source of delays that was unforeseen. But yeah. So the plan is as we get the permits in, we're still doing the best, so we accelerate the project. So most likely, hopefully in the first half of next year, we're able to deploy it.

But for us, the last permits with the Coastal Commission, we're targeting the end of the year and we'll still have the U.S. coast Guard and U.S. army Corps that will need to follow that.

So hopefully we get all in time before the launch, but you will still be able to see it more comfortably on ground without the movement of the swell. So happy to take all the time needed to present you all the system in detail.

I was trying to count from your presentation, how many different agencies have you had to work with on this project?

I think eight directly, plus additional agencies that some of them need to work with. Yeah, so at least eight agencies, plus some other agencies that they work with.

And so you mentioned that it takes 36 months for you to get through the process for a one year project. Correct. Once I assume that you have to bring that in for maintenance and just to check it, make sure that it's working properly.

So during the 12 month period, we'll monitor it, go to the unit in terms of how frequently we bring it to the shore, that will be dependent on the operation, but hopefully less than once or twice per year. But really during that period we'll go there every couple weeks or months just to monitor.

But we have all the information also remotely. So all the information from the operation, we get that remotely, which will be quite useful.

And so now that you've gone through this process, took 36 months, after a year, can you continue to redeploy the technology without having to jump through all the hoops again?

Hopefully in that process there was a lot of learning both from Onika's side and on the regulator side as well. So hopefully in the future permitting there's going to be some facilitation.

I would just say something or Rogers, that a lot of it will be dependent on how the State Water Board handles the California Ocean Plan. This is an emerging technology, it's innovative, it's new.

There's not a lot of, you know, there's nothing in the Ocean plan now that deals with this sort of technology, theirs and others like them. So, you know, we'll see. I mean it's a couple year process now to go through the Ocean Plan amendment. They're engaged and we're helping to navigate that for them.

Not only to like deal with the future of permitting a pilot project for three years for permitting a pilot project, a very, very small, small, small pilot project is hard to do. But then also the subsequent permitting for a full term project.

For us the ambition is we don't want to do short term pilots at small scale forever. The goal is to make much more significant water supply to coastlines. So definitely more better visibility and Shorter timelines of the permit will be a key aspect for doing that.

You mentioned and you don't have to go too far down the rabbit hole, but you mentioned that one of the benefits of this as opposed to other desal some of the concerns that we hear from the environmental community is safety features for the marine wildlife. You mentioned that the meshing is too small for most to get in.

But I know that there's also a concern about if there's a continuous pumping that animals get stuck up against the mesh. How have you tried to address that?

Thanks for bringing it up. You essentially that a pumping is not a continuous pumping, which is actually an advantage. It's actually cyclic pumping with the waves. So an animal can't really be sucked on it because every five to 10 seconds it stops sucking in, it sucks in. So that's actually helpful for any marine life on there.

It does mean that it needs to be cleaned more frequently because it's such a fine mesh. So for now there is some more frequent cleaning on it. We do have some plans for reduced cleaning cycles on the intake.

But even for example, for that, even a minor change on the intake, we would need to get that permitted as well. Even if it's just changing the mesh size, we would need to have an amendment to the permit to get that authorized.

You mentioned one of the things that definitely jumped out as well was that in other jurisdictions it takes three to six months to do the same permitting process that in California it takes you 36 months to do.

Can you talk through and you mentioned that some of it is quarterly meetings, Some of it is you have to do this before you can do this. Can you talk about what the process is elsewhere and some of the efficiencies that California could stand to look at to potentially expedite this process a little bit?

Excellent. So there, there's been three other jurisdictions where we got projects permitted. One of them was in Chile, Florida and Canada. So in Florida, there are some agencies that are actually both there. So U.S. coast Guard, U.S. army Corps are included in both sides. But really the big difference is the environmental aspect.

In Florida, it's the Florida Department of Environmental Protection. They do have some national agencies that they work with to get it done. It's hard to pinpoint exactly which aspects take the most time out there. But there were still marine life. Like for example, we needed to manage turtle nesting. What we do about turtle nesting, timing, seasons.

One thing that was helpful was the number of agencies we directly work with. It was really FDEP and they communicated with a few others and U.S. army Corps, U.S. coast Guard, and that's pretty much it. So the number of agencies which much simpler to navigate, less point of contact.

So that probably simplifies the project because whenever you have like eight agencies in each agency, like a couple people. So there's a lot of learning process for each person to understand what the project is about, understandably, like they need to know what they're about to permit. So there's a lot of learning.

And then the timing of each agency when you have one, that makes it easier as well. And in Canada there's just less regulation. We had a permitted two year deployment within three months, including a small pipe to shore. They deemed the environmental impacts small enough, minimal.

So they didn't need to go through like environmental constraints other than we needed to be safe for navigation. And to show that we're going to be using a public space. So. And in Chile it's somewhere in between, it was like nine months or so. So.

And now that you have those other projects that are going, are you able to monitor your outcomes to potentially turn around to regulators as you're trying to deploy new places like California and say here's our documented outcomes.

Yeah. So under documentation, we're working on it to be properly documented. But even with that, for example, on the environmental aspects in Florida, it's a really different wildlife in the area. It's like desertic, but we're seeing that, we're noticing that the life is blooming around the unit. So we're. For now it's observations.

So we'll see how we can quantify it. But our expectations that for regulators in California they will deem that natural habitat quite different. So you still need to do different work. While it's probably it can hurt, but still the same work needs to be really done thoroughly in California as well.

That's kind of what we're seeing not only with Oneka's project, but also the ocean well project and the Seawell project down in Southern California. Same things they, you know, deployment and data that they derive from deployments in other countries are not accepted by the state regulatory agencies.

You know, they want to see it in our marine environment and these conditions, even Ocean well, who's doing a pilot project with Las Verde Municipal Water District? It's in a natural lake system, so we're unclear whether that how the regulators will treat that data set as well.

But you know, we're hoping that since it's in a California navigable water that, you know, we would be able to use that data. But it's a question, it's an issue.

And then Logan pointed out to me and I think it's good to highlight from a resiliency perspective. We just had a whole presentation about public safety, power shutoffs. And your technology continues to provide fresh water even if there's no power associated with it?

Correct. That's one of the most critical point here. It's a fully autonomous, not grid connected as long as there's an ocean and waves that can make water. So that should stay there for a while. So it should be able to provide water continuously to coastal cities.

So really extending the water sources to not be only dependent on natural water source, not dependent on a grid, even cyber attacks and things like that, it's just mechanically running as long as there's waves in the ocean. So it's a key aspect for the solution.

Any last words, Glenn?

Now, thank you, Mr. Chair. I really appreciate the opportunity today.

Yeah, absolutely. Thank you so much for coming out, doing this portion and then we look forward to seeing you tomorrow out in Fort Bragg.

Yeah, really looking forward to it. And thanks again for having us.

Yeah, absolutely. Thank you. So we'll move on to our third panel which is on marine permaculture technology. And actually it's Brian von Herzen who's the Founder and Chief Executive Officer for Climate Foundation, who is going to be joining us via Zoom from across the world.

Greetings. This is Brian von Herzen. Can you hear me okay?

Yes, we can. First of all, thank you so much for shuffling times to be able to make this work.

Zero, it's my pleasure. I think this is an excellent opportunity.

I have about a 10 minute presentation where I'll provide a little bit of background about our work on marine permaculture, regenerating kelp forest across the Pacific Ocean and then get into some of the permitting challenges and then we'd love to have a Q and A to answer any follow up questions.

That sounds great. Take it away. Dr.

Thank you. I'm going to try sharing my screen. Let me know if you encounter any problems as I do that, but hopefully that's sharing and let me know if there are any problems. Our Climate foundation is about 20 years old.

We're a nonprofit, 501C3 and we've been working to really regenerate life in the oceans over the past two decades. We are very happy to be honored with the X Prize for carbon removal a few years ago. And I'll get into our what we're all about.

Our focus is on food security for life on land and life in the ocean. And that involves a lot of ecosystem regeneration in terms of food supply and also in terms of habitat.

Finally, we can measure the carbon balance of those kelp forests that end up being pivotal to our coastal life up and down the coast of California as well as all the way across the Pacific Ocean where we've done our flagship opportunity activities and projects from the Philippines to Australia.

My own background, I'm a native Californian, born and raised. I got a PhD at Caltech, did marine research at Scripps as well as Woods Hole Oceanographic, and I'm co founder of the and Executive Director of the Climate foundation. I had 25 years in Silicon Valley working on systems on a chip.

And our IEEE article in IEEE Spectrum says we went from designing systems on a chip in Silicon Valley to systems on a ship in the Pacific Ocean. So that's a bit of our history and background.

The year I was born, my father was getting his PhD at Scripps as an oceanographer and his office mate decided to start measuring the carbon dioxide on the side of Hawaii volcano Mauna Loa. His name was David Keeling and he started the Keeling curve the year I was born.

And that's history now, being able to see the increase in carbon dioxide. In fact, his advisor Roger Revelle informed and provided the first report to then standing President Lyndon Johnson in 1965 on greenhouse gases. So we've had a history of 60 years of the federal Administration being on notice as to the global problem.

And that is excessive greenhouse gases contributing to ocean warming and global warming, 93% of which ends up in the oceans, particularly the Pacific Ocean, with enormous effects from the kelp forests of California all the way to the tip of Tasmania. So this is a really profound effect.

We've seen losses of 95% in the canopy forming Macrocystis and bull kelp forests off Northern California. It has been profound, I have to say. You know, in the 1950s my father would get those abalones off the coast of off Scripps in La Jolla, and that moved further and further north.

I dove for abalone in the Santa Rosa region, Fort Bragg, and further north in the last three or four decades. But now even that fishery is gone. And it's partly because of the devastation of the kelp forest. Back in 2008 we had a pretty healthy kelp forest along the coast of your district number two.

And of course under normal conditions we had sea surface temperatures as exemplified by the blue and red colors. But by 2014 the big warm blob came down from Alaska and by 2015 the strong El Nino coupled and had a huge effect.

And the result was the loss of more than 90% of the kelp along Mendocino county and Sonoma County.

Really significant effects and similar effects We've seen over 100 years as far south as Santa Barbara, where believe it or not, the USGS plotted in 1868 as shown in this chart on the right, and actually 1853, the earliest evidence of a continuous river of kelp going from California all the way to Mexico.

And that river is more than half kilometer wide. And yet today we hardly see a few percent of of the kelp that was back in the day. So it's a key problem. The solution we're proposing is marine permaculture. We've actually tested this in The Pacific Ocean.

We're very happy that it was featured in both Drawdown, a book by Paul Hawken, and Regeneration. It was also featured in a great film that's available on Netflix called 2040.

And the solution is all about understanding the problems in the ecosystem, and that is high water temperatures and low nutrient levels and being able to address those problems to regenerate kelp forests and other seaweed forests across the Pacific. And we've done that with this ring that goes down every night.

The way it works is at night, the platform lowers down. It can be 1 acre, 2 acres, even larger in size. And it absorbs the seaweed, acts like a sponge and absorbs nutrients from the deep water thermocline, nutrikline. As you know, nitrate and phosphate are needed for plants to grow, including seaweed.

And so it acts like a sponge, soaks up nutrients at night. At sunrise, we lift the platform up, we raise it up to the surface where it absorbs sunlight and carbon dioxide in the top meter of the sea. And it's this combination of deep nutrients and surface oxygen and carbon and sunlight that really enables kelp to thrive.

And that's something that what was working fine, especially with offshore winds, until we had the ocean warming that we've seen in recent years. And that ocean warming starting in the early 2000s has curtailed the supply of deep nutrients. And we're working to restore that supply. So this marine permaculture platform goes up and down.

It uses 100 times less energy than upwelling. We've actually survived two typhoons now, the first one in 2021 and the second just this month. And the system is storm resilient, which is very important.

In Northern California, we're able to access millions of acres of open ocean, mostly empty ocean, including California waters that extend out more than 300km off the coast of California. And finally, it's a scalable true blue carbon sink. And so these are things that we've worked to establish with our University partners over the past half a decade.

The growth rates are Great. We're seeing 100 to 300% growth per month compared to controls during times when in the summer and autumn, you don't have much growth of kelp normally. That's been true for several years now.

And we now have a scaled platform that is a quarter acre in this picture, and we're up past a half an acre now. What kind of industries does this support? Well, there's a dozen value chains for seaweed.

It starts with food, feed and fertilizer, and we're working right now to get a biostimulant trialed with universities in California and including UC Davis, San Francisco State University and University of California, San Francisco. This biostimulant has demonstrated improved productivity and that is 15 to 30% higher yields with 20% less fertilizer.

That means that every food product that is produced using this technology actually has 35% less carbon content than food that is produced traditionally, which has a profound effect on rice. We hope to work with UC Davis on rice trials and almost any flowering crop can benefit from this.

So we hope to be part of the wave of biostimulants that can help us decarbonize our hard to abate agriculture fertilizer industries. Furthermore, with surf and turf cultivation, we're looking at not only in the surf, cultivating the seaweed, but then bioprocessing along the coast in places like Mendocino and, and up and down the coast of California.

Being able to reduce the carbon intensity of agriculture, being able to produce food and feed and fertilizer products. And measuring the quarter of the seaweed that falls from these platforms during growth sinks 1,000 meters a day to the abyssal sea floor, which abounds off Northern California.

And measure that carbon removal, where it remains for centuries along the carbon lines. If you get it down 100 meters, it lasts maybe 10 years. If you get it down 300 meters, 100 years. And the scientific indicator is that below 1,000 meters it can last for more than a thousand years.

Let me know if there are any questions and I'll be happy to complete my presentation. The greenhouse gas impact is profound. We're estimating per square kilometer of marine permaculture offshore, 8,000 tons of carbon removal, 12,000 tons of avoided fertilizer, fossil fuels. And those 20% less nitrous nitrogen fertilizer means 20% less nitrous oxide.

And that's another 10,000 tons per square kilometer per year. We have partners from Scripps and from Princeton and Rutgers who are working with us on measuring the carbon cycling of our platforms. We're now in year two of this multimillion dollar study.

We using underwater gliders, we're using sediment traps, and we're using drones to measure the seaweed as it grows, the daily growth rate, the daily falloff rate, and track that carbon removal. So we're very happy to have this working. We're looking to bring repatriate this technology to California. And we've run into some interesting regulatory hurdles.

We've talked about the xprize I will now zoom over to those regulatory hurdles and that is we've gotten one or two approvals.

California Fish and Wildlife so far our partner Farmer C is working in California and has a kelp location which has been partly permitted, but we're still pending a California Coastal Commission Review, a U.S. army Corps of Engineers review.

And I've got to say there are 17 state and federal agencies that have something to do with our permitting here and being able to do this. That's one of the reasons we've had to go as far as the Philippines and Australia to get our prototypes made because quite frankly, we couldn't wait.

Our partners at Farmer C say they waited over a dozen years to restore and refresh their permits. And I think there's a huge opportunity here for one stop shopping that would enable California mariculture to thrive in a time when it's needed the most and that is when our kelp forests are collapsing.

So we have a whole List of 17 state and federal agencies and we work with Chumash Divers and other groups. We greatly appreciate the support of a variety of organizations that have been helping us and we're really looking forward to repatriating marine permaculture technology to California. Our biggest challenges are to streamline the permitting which is still pending.

And we've raised over a third of $1.0 million towards our first marine permaculture pilot, the first one in the Americas, which we hope to put in California waters.

And we need matching funding and that is another 300k to get us over the line, green light the project and deploy, build, deploy, operate and recover a one year project that we hope will have be able to place in waters in District 2 sooner rather than later.

So thank you very much for your attention and I look forward to answering your questions.

Yeah, absolutely. Thanks Dr. I think just if you could just dive into some of the proposals around streamlining of the permitting.

I know you kind of glossed over and I'm glad you said it multiple times, 17 different agencies and perhaps even going back to the slide that showed the agencies that you were required to partner with and then your why you don't think that you should have to. And let's start the discussion there.

Well, that's great. You know, I think, I know we're going to have to work with certain agencies. The problem is overlapping jurisdiction and it's both state and federal, but it's also, you know, within a government there are multiple agencies that are overlapping.

And what's really needed to streamline this approach for would Be seaweed cultivators up and down the coast of California is what I'm going to call one stop shopping. And what that means is one agency needs to be a coordinating agency. Perhaps it's California Fish and Wildlife, perhaps it's another agency, but they can provide a streamlined approach.

You know, there's an approach that's analogous to real estate permitting and that is we develop code where if you stay within these boundaries, you can get a code approval from one agency and you don't have to go through a multi year permitting process for each part.

And so the idea is to develop a code where you say if it's less than a hectare and it's got these dimensions and it, you know, meets these requirements, then there's a code, a code review where applicants simply apply, let's say, to California Fish and Wildlife for a permit and it meets, and they just check to make sure it meets the code requirements.

And that code approval, as opposed to a customized approval is a huge opportunity for streamlining. And that's something that I would encourage. As an analogy with a real estate process.

Is there a place that we should look at that you think is doing it particularly well? And obviously you've got an international vantage point on this, having worked in multiple jurisdictions.

Yes. Well, it turns out the Sunshine coast is actually a UN Biosphere Reserve. And that happens to be where I am at the moment. That's the Sunshine coast of Australia, which is part of Queensland, just north of Brisbane.

They are going to have to go through an ecological 10 year review with the United nations in just eight years or so.

What they do is they have a process where if you meet their code requirements, you can actually comply with that, supply an application, and literally in places from Australia to the Philippines, we could get an approval in six weeks rather than six years.

And then if you're outside that process, if you're doing 100 hectares and some big operation, then sure, you have to go through a full review and pay for all the agencies and everything else. But I think this code review principle is something that would be an excellent approach.

And I think for the smallholder farmers, and we know several in California that would like to be doing this, and we're talking, you know, a hectare or two. We're talking, you know, there are very simple guidelines. We're happy to work with the state agencies to identify those.

Then a code approval means a standard, pretty much, you know, boilerplate. Make sure you're meeting all the code requirements and then a straightforward approval which takes weeks rather than years.

And as you kind of think through those code requirements, you've mentioned the hectare a couple of times. Is there an economic model that you've started to develop of how big these projects have to be in order to pencil out versus keeping it kind of more contained for that code that you're talking about?

Yes, I would actually be inspired from the government of the Philippines. And there, there's a quarter million seaweed farmers. Each one of them applies to local councils, and they're able to, in a matter of weeks, get approval for a 1 hectare cultivation site. And every cultivator can. Can get a one hectare approval with about six weeks notice.

We were able to do that as a nonprofit, in fact, in the Philippines, which is one reason we've done our prototypes there over the past five years. Now we're ready to repatriate that technology.

And so I would say from a techno economic standpoint and from an oceanographic standpoint, one hectare, which is about 100 meters by 100 meters or 100 yards by 100 yards, it's about two and a half acres, that is actually a sweet spot as far as serviceability for a single farmer or cultivator.

And I would encourage that kind of smallholder approach to be used. And perhaps there's a bit of marine spatial planning that goes on. But I've got to share with you that close to shore, I would say the real estate model is not bad. But, you know, California has got 300km of exclusive economic zone.

And as you go farther from shore, really, a marine vessel model works even better than a real estate model.

And so while we might start with a real estate model with code permitting, I think ultimately maybe we need to consider vessel registration with the California State Registry of Vessels and have vessels of up to 100 meters in size that would also comply.

So I would suggest those two approaches, and I'd be happy to work with any Committee or Subcommitee on helping to formulate those approaches in conjunction with our University partners.

No, I appreciate that and I appreciate the closed loop that you're trying to articulate there as well, and the uses of the kelp. Our Legislative Director, Logan, wants to know whether the fish actually like the kelp that's being produced. Is there a discernible difference between it?

That's a great question. And I've got to share with you. We grow the red seaweeds, and by the way, this platform works great with kelp.

We've tested it down in Tasmania with the same kind of Macrocystis giant kelp that you get In California, a funny thing happened is that as we were trying to grow all this red seaweed and it turned out the green seaweed was growing better than the red seaweed. And we thought that was a problem.

But then we noticed all the fish were eating the green seaweed. And so you. The fish eat the green seaweed. This is part of permaculture. Right. As you notice what's happening, the red seaweed is our cash crop. But what's very interesting is that green seaweed is also most of the carbon sequestration.

And so I think there are a lot of benefits. And in fact, we're now seeing that the green seaweed has more protein, might be a good fodder for fish and other livestock.

And in fact, there's some good evidence by UC Davis and others that in fact, a seaweed supplement can reduce the enteric methane emissions of ruminant livestock from cattle to goats and other dairy and beef cattle operations.

So this presents a big opportunity for the State of California and is something that I think we should be growing most of our seaweed right offshore in California waters to feed those cattle and reduce the methane emissions.

I really appreciate it. Thank you so much. Doctor, we're going to let you go. Thanks for joining us from Australia and I look forward to continuing to work with you on this.

Thank you very much. I appreciate the time and attention and interest. Absolutely.

All right, folks, that concludes our final panel for the day. As I mentioned before, we'll be doing multiple Select Committee hearings over the course of the next year to really try to highlight innovations and where we should be working on regulatory reform as well as on investments.

I think we're going to do a little bit of public comment. If there's folks who have any follow up questions or comments, go ahead, just come on up to the microphone. We'll give everybody a couple of minutes if they'd like. Thank you. Sassan. Yeah.

Okay. My name is Tim McCrae. I'm the Vice President for Public Affairs for the California Hydrogen Business Council. So I wanted to comment on the hydrogen piece here. We're the longest and largest. We're the largest and longest tenured Hydrogen Business Association in the country. We're proud to support Member companies who are innovating in this space.

I know that you saw the Calistoga Resiliency center earlier today. Some of our Member companies are participating in that. And what I wanted to make as my comment is that we encourage you to promote all forms of low carbon intensity hydrogen. The Biden Administration regulation implementing the 45v federal tax credit incentivizes low carbon intensity hydrogen.

It doesn't make reference to the colors. And there was some sort of back and forth about green or gray. And, you know, you get sort of what I call the Skittles collars, people referring to, zero, is that pink? zero, is that white? And we just define that to be confusing and not helpful to the debate.

So I flag this because if you define it in terms of low carbon intensity, which is what the California Hydrogen Business Council supports, that if it meets the definition, that is for the 45V production tax credit, then it is low carbon intensity, and then that is the type of hydrogen that we think in all forms can help achieve our green goals.

So thank you for your time.

Thank you so much. I appreciate the clarification. Anybody else with comments? No, no comment. All right, thank you so much. We'll conclude our Select Committee hearing today. Again, I want to thank the AB team so much for coming out from Sacramento to be able to do this. Really appreciate it.

Thank you to our team and all of our panelists, as well as the City of Healdsburg for hosting us. And we look forward to the second day of the Select Committee tomorrow in Fort Bragg. Thank you so much.