GFO-17-501Improving Natural Gas Energy Efficiency, Waste Heat-

to-Power, and Near-Zero Emission Distributed Generation Systems

California Energy CommissionPre-Application Workshop: August 23, 2017

Pre-Application Questions, Answers, and Clarifications

State of CaliforniaCalifornia Energy Commission

http://www.energy.ca.gov/contracts/index.html

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Please note that where an answer mentions certain requirements, those requirements are in addition to all other requirements in the GFO.

Administrative

1. Q: What are the procedural and documentation requirements from the contractor, and triggers for disbursement of funds by the Energy Commission?

A: The recipient will submit invoices with backup documentation for actual, allowable, and incurred expenditures along with progress reports. Included in the backup documentation are invoices from subcontractors, receipts from vendors, etc. Invoices are approved based on satisfactory compliance with agreement requirements during each invoice period. In some cases demonstration site visits by Energy Commission staff may be made to verify progress and equipment installations before invoice payments are processed. Refer to the standard Terms and Conditions, Section 18.a-h, for full details: http://www.energy.ca.gov/contracts/pier.html#piergeneralinfo

2. Q: If the concept/design proves patentable, who has rights to the intellectual property?

A: Patent rights for Subject Inventions will be the property of Recipient, subject to the Energy Commission retaining a no-cost, nonexclusive, nontransferable, irrevocable, royalty-free, worldwide perpetual license to use or have practiced for or on behalf of the State of California the Subject Invention(s) for governmental purposes. Please refer to standard Terms and Conditions, Section 25.j, for full details.

3. Q: Please state if it would be acceptable for a foreign corporation to prove that it has its headquarters in California by submitting a tax registration certificate of the city the headquarters is located in? Or do you insist on a registration with the Department of State in California? Our Company does not maintain any offices elsewhere in the USA.

A: All corporations, limited liability companies (LLCs), limited partnerships (LPs) and limited liability partnerships (LLPs) are required to be registered and in good standing with the California Secretary of State prior to its project being recommended for approval at an Energy Commission Business Meeting. Please refer to the solicitation manual Section II.A.3.

4. Q: Is the Pre-Application Workshop presentation available?

A: Yes, it is available at the following link: http://www.energy.ca.gov/contracts/pier.html#GFO-17-501

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5. Q: Where can we get a copy of this presentation?

A: See response to question 4.

6. Q: If an applicant has recently received a Federal Grant to move the Technology Readiness Level (TRL) from 5 to 6 that is not yet finalized, can we use this funding as a cost share to move the technology from TRL 6 to 7?

A: No, only funding that has been finalized is eligible for match funding. “Match funds” do not include: Energy Commission awards, future/contingent awards from other entities (public or private), the cost or value of the project work site, or the cost or value of structures or other improvements affixed to the project work site permanently or for an indefinite period of time. Please refer to the solicitation manual, Section 1.F.2, for full details.

However, during the term of the project, if awarded, and once the federal grant is finalized, the Recipient may request to modify its budget to revise the source and/or increase the amount of its match.

General

7. Q: We were wondering if our company could be a subcontractor (not a lead) in more than one proposal for this grant funding opportunity. Specifically, we are thinking of project Group 4.

A: Yes

8. Q: What constitutes Demonstration? Is it sufficient to prepare a workable concept design, or does it have to be physically installed and operated? If so, what are the requirements for data collection and verification?

A: A demonstration project is defined as one that utilizes equipment and systems with at least 500 hours of performance testing, and is ready to be operated in real-world operating conditions (refer to the solicitation manual, Section I.B.). It is not sufficient to just prepare a workable concept design to be considered for funding under this solicitation. Projects must conduct a demonstration at a host site. A measurement and verification plan must be included in the Project Narrative (Attachment 4). (See Section II B 2. of the grant solicitation manual for more elaboration on Measurement and Verification plan requirements for Groups 1, 2 and 3.) Also note that Measurement and Verification of project performance must be conducted by an independent third party.

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9. Q: What if you are further along than TRL 6 or TRL 7, does that disqualify the technology?

A: No, technologies further than TRL 6 or TRL 7 are eligible for funding consideration. For technologies that are further along than TRL 6 or TRL 7, the application must demonstrate how the project will improve the cost and performance and advance its commercial readiness.

10. Q: I am assuming that a company outside California can apply but they have to demonstrate the project in California, right?

A: Yes, a company outside California can apply if the demonstration site is located in a California Natural Gas Investor-Owned Utility (IOU)1 service territory. Please note that proposals are also scored based on funds spent in California under scoring criteria 6 with a maximum of up to 15 points available. See the Solicitation manual, Section IV.F (page 42) for full details on what qualifies as funds spent in California and how points are awarded. Additionally, funds spent on companies that are California Based Entities (CBE) are awarded bonus points under scoring criteria 10 with a maximum of 5 bonus points available. See the Solicitation manual, Section IV.F (page 44) for details on what qualifies as a CBE and how points are awarded.

11. Q: Are Groups 1 and 2 projects location specific?

A: No, Groups 1 and 2 projects are not location specific. However, priority funding is given for demonstration projects in Southern California natural gas IOU service territory (refer to the solicitation manual, Section I.F.1).

12. Q: Is there a preference for Energy Commission funds to not be used for equipment purchases/asset ownership? I know in the past ownership can get tricky after the project.

A: No, there is no preference. Please refer to the standard Terms and Conditions, Section 13, for equipment ownership provisions.

13. Q: Can you have two separate applications, one application for Group 2 and a separate application for Group 3? The ultimate goal is to have the two modules integrated. Will you accept two separate applications for Group 2 and Group 3?

A: Applicants may submit multiple applications, though each application may address only one of the project groups. If an applicant submits multiple applications that address the same project group, each application must be for a distinct project (i.e., no overlap with respect to the tasks described in the Scope of Work, Attachment 6). Applicants may only receive one award per project group.

1 Natural Gas Investor-Owned utility refers to Pacific Gas and Electric Co., San Diego Gas and Electric Co., and Southern California Gas Co.

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14. Q: What is the definition of Southern California site? If equipment is built and tested outside Southern California but the demonstration site is in Southern California does that qualify?

A: Yes, if a project builds and tests equipment outside of Southern California, but demonstrates the equipment in Southern California, the project would qualify for priority funding. Please refer to the solicitation manual, Section I.F.1, for the definition of Southern California for this solicitation.

15. Q: We are developing low-cost, highly sensitive and specific natural gas sensors for the natural gas industry with the goal to increase safety (through continuous and remote monitoring) and reduce fugitive emissions (through predictive maintenance and leak repair prioritization). Would this be of particular interest in Group 1 or Group 3?

A: No, this solicitation is not funding natural gas sensors for increased safety and/or reduced fugitive emissions. Please check the Energy Commission website for upcoming funding opportunities that may fund natural gas sensors for increased safety: http://www.energy.ca.gov/contracts/pier.html

16. Q: The solicitation mentions that the technology should be in TRL 6 or 7 by the end of the project period. What is the minimum TRL the technology needs to be in before the project starts?

A: There is no established TRL minimum; however the application must specifically describe how the technology will realistically reach TRL 6 or 7 by the end of the project period.

17. Q: Could technologies that are not commercially available in California but are commercially available elsewhere (i.e. Europe, East Coast) be eligible for funding?

A: Yes, technologies which are not yet commercially available in California but which are commercially available elsewhere could be eligible for funding. Applicants must explain why the technology would be applicable to California and any needed modifications to meet the state’s environmental requirements in Attachment 4 (Groups 1, 2, and 3), Technical Merit and Need, Item 1.b.

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GROUP 1: Develop and Demonstrate Energy Efficiency Technologies and Strategies to Reduce Natural Gas Use in the Industrial Sector

18. Q: Is the solicitation focused on equipment hardware or would a methodology for improving heat recovery also qualify (with equal weight)? E.g. a rigorously correct thermodynamic technique for identifying very high efficiency cogeneration applications.

A: No, this type of project would not qualify for Group 1. As stated in the solicitation manual Section II.B.1.a, the project focus of this group is to develop and demonstrate emerging energy saving technologies that can directly reduce natural gas use and greenhouse and other emissions in California’s industrial sectors. Also, the example listed above would not be eligible for Group 1 because the focus is improvements to cogeneration.

19. Q: It was noted that projects that recover low temperature waste heat or high temperature waste heat to increase natural gas energy efficiency are possible projects that will be considered for funding under Group 1. Will projects that involve recovering waste heat from mid-range temperature sources be considered for funding?

A: Yes. Mid-range temperature waste heat recovery projects that increase natural gas energy efficiency will be considered for possible funding under Group 1 within this solicitation.

20. Q: If the efficiency of an existing system on site is enhanced by adding a new component integrated in an innovative manner, would that improved system qualify as a new technology?

A: Yes this would be considered an advanced methodology and would qualify if it demonstrates natural gas savings from energy efficiency and meets other technical requirements as specified in the solicitation (refer to the solicitation manual, Section II.B.1.a).

21. Q: Are natural gas fired heat pumps for industrial process loads eligible under this solicitation? There are three variations of heat pumps we’d like your feedback on:o A natural gas heat pump for process heating only?o A natural gas heat pump for simultaneous process heating and process cooling?o A natural gas engine driven chiller with heat recovery for simultaneous process heating and

cooling and high overall efficiency?

A: Yes, all the examples provided are eligible to be considered for funding if they improve natural gas energy efficiency over commercially available heat pumps and meet other requirements listed in Section II.B.1.a.

22. Q: In Group 1, are prime mover driven heat pump proposals allowed? If yes, heat pumps include 1) process heating only; 2) simultaneous heating and cooling; and 3) cooling only. Are all these heat pump outputs allowable?

A: Yes. See response to question 21.

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23. Q: Would the following applications be considered subsets of food processing (targeted industry): o Beverage Manufacturing? o Indoor Agriculture?

A: Beverage Manufacturing is considered food processing. Indoor Agriculture is not considered food processing.

24. Q: Are demonstration projects at the targeted industries listed on page 16 of the solicitation the only industry sites eligible for PIER funding through this solicitation?

A: Yes. The targeted industries listed in the solicitation manual (Section II.B.1.a) are the only ones eligible for funding. These industries use large quantities of natural gas in their operations, and past R&D efforts have not focused on many of these industries. As previously noted, all proposed projects must have potential for meaningful natural gas energy efficiency gains, i.e. at least 10 percent over existing conditions and be able to have estimates of measurable statewide ratepayer benefits.

25. Q: Is a project that utilizes solar thermal energy coupled with natural gas energy efficiency to lower gas consumption eligible under Group 1?

A: Yes. However, any project proposing the use of solar thermal energy to displace the use of natural gas must not duplicate past funded projects and must clearly show the technological or scientific knowledge advancement and innovation over current use of solar thermal technology. The application must also provide proposed technical specifications and describe how the project will meet or exceed the target specifications provided in Section II.B.1 by the end of the agreement term. All of the explanations must be discussed Attachment 4, Technical Merit and Need, Item 1.b.

Information on past research can be found at the following links: http://www.energy.ca.gov/2017publications/CEC-500-2017-025/CEC-500-2017-025.pdf and http://innovation.energy.ca.gov/SearchResults.aspx?cat=Topics&subj=Energy Efficiency.

26. Q: With respect to Group 1 projects, you state "Projects must focus on natural gas savings from energy efficiency and not from energy generation." Are efficiency improvements to natural gas gensets eligible?

A: No, energy generation projects are not eligible under Group 1. Energy efficiency refers to natural gas savings from industrial processes, such as boilers, furnaces, kilns, etc. Refer to Section II.B.1of the application manual. The project may be eligible under Group 3, assuming it meets the technical specifications required.

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27. Q: For Group 1 emission target (meeting or exceeding current emissions standards), do we need to provide estimation model in the proposal, or this is something that will be evaluated once the system is built and started at the site?

A: No, applicants are not required to submit an emissions estimation model in the proposal. Emissions reduction is a co-benefit of energy efficiency and estimating emissions reduction will enhance the technical merit and need for the project with or without a model being used to estimate the pollutant emissions reduction. In either case, all assumptions used to justify the emission reduction estimates for GHG, NOx and other criteria pollutants, at a minimum should be stated in the proposal. For Measurement and Verification requirements, pre-installation and operation measurement of emissions should be made, and then post-operational measurements should be made and provided. This information should be correlated with pre-installation and post-installation natural gas consumption.

28. Q: For Group 1 lifetime, is the useful lifetime of the system while operating in the field, or in a test lab? If the system lifetime does not meet 10 years, but the cost of maintenance is low, would the solution be considered?

A: Lifetime refers to the estimated useful life of the system under actual operating conditions i.e. in the field. If the useful life of the system which is the subject of the demonstration is less than 10 years, this solution/technology would not be considered for funding.

29. Q: For Group 1, will proposals with demonstrations in industries such as mining be scored at a disadvantage to those in the industries named in the solicitation (e.g. food, oil & gas, cement, glass)? We are specifically interested in a demonstration partner in mining minerals (boric acid and salts). These facilities generally have large heat needs for both mining and processing/refining. As such they have similar heat needs and run similar equipment to the oil & gas and chemical processing.

A: The targeted industries listed in the solicitation (Section II.B.1.a) are the only ones eligible for funding. Please refer to the answer to question 24.

30. Q: For Group 1, would generators for producing heat and power be eligible?

A: No, Group 1 projects must focus on natural gas savings from energy efficiency and not from energy generation. However, it may be eligible under Group 3 if it meets the technical targets specified in the solicitation manual. Please refer to the solicitation manual, Section II.B.1.c.

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31. Q: For Group 1, there is no calculator. Could we upload something similar to show the benefit calculations?

A: Yes, you can upload a document to show the benefit calculations, or simply include it in the project narrative along with your assumptions. Please refer to Attachment 13, Guidelines for Cost and Benefits Calculations for the standard assumptions to be applied for benefit calculations.

GROUP 2: Develop and Demonstrate Cost-effective Waste Heat to Power Systems for California Industries

32. Q: Please clarify performance prerequisites. For Group 2, is concept validation or TRL1 or 2 of physical prototype required to submit?

A: There is no established TRL minimum; however the application must specifically describe how the technology will realistically reach TRL 6 or 7 by the end of the project period.

33. Q: Are SoCal preference points applicable to Group 2?

A: There are no Southern California preference points. Groups 1, 2, and 3 have funding priority for Southern California demonstration projects. Please refer to the solicitation manual, Section I.F.1, for full details.

34. Q: Page 18 of 49 states that for a Group 2 projects “WHP systems should be sized no larger than 1 MW of net electrical generating capacity.” What is the minimum kW allowable for an acceptable demonstration of Waste Heat to Power?

A: There is no specified minimum power output requirement, however the system must be cost-effective and must meet the technical specifications listed in the solicitation manual, Section II.B.1.b.

35. Q: Page 18 of 49 states that Group 2 demonstrations are targeted at “wide-scale adoption of waste heat to power (WHP) in key industries in California.” Please provide some examples of “key industries” for sources of waste heat which are acceptable (select industrial processes, power plants, agricultural processes, etc.)?

A: Key industries with large potential for waste heat to power systems include, but are not limited to:

o Food processing;o Metal, glass, and chemical manufacturing; ando Wood and paper product manufacturing.

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36. Q: Is electric utility grid connection needed for demonstrating a waste heat to power technology under Group 2 or is onsite usage of the power generated acceptable?

A: No, electric utility grid interconnection is not required. Energy generation for on-site use (behind the meter) is acceptable.

37. Q: Group 2 states that the generation of electricity is required. Does this requirement allow for the production of mechanical energy to directly drive an otherwise electric motor driven end use which will reduce the electric consumption by the facility?

A: No, production of mechanical energy from waste heat is not eligible for funding.

38. Q: Does Group 2 allow the recovery of waste heat from systems that are not consumers of natural gas but rather other fossil fuels?

A: No, other fossil fuels are not allowed. Waste heat recovered for power generation must be from industrial processes that use natural gas fuel.

39. Q: Group 2 requires systems no larger than 1 MW. If a project is larger than 1 MW can the funding be applied to only a prorated portion of the project?

A: No, systems larger than 1 MW are not eligible for funding, partial or otherwise.

40. Q: For Group 2, waste heat to power is the integration of existing power generation systems accepted? Will the Energy Commission consider that as a commercial technology and reject the application?

A: Projects which use commercially available technologies would only be considered if applicants could present a new or innovative approach such as alternate configurations, previously ignored applications, etc. which may significantly increase the commercial demand of the waste heat to power technology.

41. Q: For Group 2, there is a mention of temperatures ranges. Are these just an example or is it a requirement?

A: The temperature ranges for low temperature waste heat to power recover is just an example of a technology that could be funded.

42. Q: For Group 2, what is the definition of waste heat? Are you specifically talking about stack emissions? Where is that defined?

A: Waste heat refers to heat which is present downstream of an industrial process. This heat is typically vented into the atmosphere and wasted, hence the term “waste heat.” Though much heat is rejected through an exhaust stack, this is not always the case. Sources of waste heat may include heat generated to support thermal processes, heat rejected from mechanical processes, and heat from exothermic chemical processes.

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GROUP 3: Develop and Demonstrate Near-Zero Emission Small and Micro-scale Distributed Generation Systems

43. Q: If the ability to export surplus cogenerated power to the grid at a fair price (e.g. highest marginal cost to the electric utility) is critical to project economic feasibility, will the Energy Commission help to ensure that the utility will cooperate?

A: No, interaction with the electric utility will be the responsibility of the awardee.

44. Q: What are eligible micro-scales distributed generation systems - e.g. photovoltaic (PV), wind, fossil-based CHP?

A: PV and wind are not eligible for funding under this solicitation. Distributed generation systems fueled by natural gas, biogas, and other replacement fuels are eligible for funding.

45. Q: Is there a minimum power output requirement for Group 3?

A: There is no specified minimum power output requirement, however the system must be cost-effective and must meet the technical specifications listed in the solicitation manual, Section II.B.1.c.

46. Q: Are the CARB emissions standards cited being used to define/benchmark "near zero" criteria pollutants? If not, can you please define what is meant by "near-zero"?

A: Yes, the CARB emissions standards are a benchmark. There is no strict definition of “near-zero,” other than improvement over these standards.

47. Q: For Group 3; A purpose of Solicitation "for light industrial, small commercial, and multifamily residential applications" is what the written solicitation says, but the presentation today includes "single family residential" is single family residential included?

A: Yes, single family residential could be eligible for funding.

48. Q: For Group 3, are you only considering CHP projects or would a high-efficiency, electric-only (50% LHV) demonstration project be considered?

A: No, Group 3 projects are not limited to CHP. High-efficiency, electric-only distributed generation technologies are eligible for funding, assuming they meet the technical specifications listed in the solicitation manual, Section II.B.1.c.

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49. Q: Do Group 3 demonstration projects require electrical interconnection?

A: No, they do not require interconnection. Energy generation for on-site use (behind the meter) is acceptable.

50. Q: In Group 3, can Energy Commission funds be used to pay for natural gas to run the DG unit?

A: No, Energy Commission funds cannot be used to purchase fuel for the natural gas generator.

51. Q: Does the review process for Group 3 consider those generation systems using biogas above those using natural gas? In other words, does the use of natural gas preclude being funded?

A: No, the use of natural gas does not preclude being funded.

52. Q: Does the Energy Commission expect the awardee to develop a new power generation system as part of R&D efforts?

A: No, improvements to existing power generation systems is acceptable.

53. Q: For a micro-CHP unit, are there considerations for using biogas instead of fossil natural gas? There would not be a large impact on emissions coming out of the tailpipe, but there would be an impact on GHGs. How would that show up on the scoring criteria?

A: It would be reflected in the “Technical Merit and Need” and “Impacts and Benefits to California IOU Ratepayers” scoring criteria.

GROUP 4: Technical Assessment of the Energy Efficiency Potential of the Chemicals and Allied Products Industry

54. Q: Given the difficulty of developing benchmarks based on industrial plants based exclusively in California, would the Energy Commission accept data and results of projects already completed at similar plants outside California, and even outside the USA?

A: The Energy Commission would consider data from the results of completed projects outside of California if the estimates of natural gas savings have strong correlation and operating parameters to facilities within California. Applicants must discuss in Attachment 4, Technical Approach, Item 1.a the data that could be used and why it would be relevant to California industries based on application, climate, environment regulations, etc. Note that data from projects within the USA would be considered more significant than data from projects that were conducted outside of the USA.

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55. Q: The savings potential and the means of achieving will be different at every plant. It will require detailed energy optimization studies. The grant recipient will need detailed process and utility system data – process flow diagrams, heat and material balance simulation models (even if rudimentary), and possibly specifications on existing equipment. What mechanism does the Energy Commission envision for the grant recipient to obtain such data, and what incentives will be offered to the plant sites to share it?

A: The applicant must determine how best to obtain this data. The applicant must explain its approach to obtaining this data in Attachment 4, Technical Approach, Item 1.a. The Energy Commission will not provide direct incentives to companies or facilities to obtain this data. See also the response to question 56.

56. Q: To perform this task effectively, the winning grant recipient will need data on the energy consumption profile – both gas and electric – for all of the target sites. Will Energy Commission be able to ensure that such data will be provided for the study by the Utilities?

A: No. It is up to applicant to determine how best to obtain this data from the utilities and describe this approach in Attachment 4, Technical Approach, Item 1.a. Please also refer to CPUC Decision 14-05-016, Decision Adopting Rules to Provide Access to Energy Usage and Usage Related Data While Protecting Privacy of Personal Data: http://docs.cpuc.ca.gov/publisheddocs/published/g000/m090/k845/90845985.pdf

57. Q: Can you elaborate Group 4 scope a bit? Is it a survey of a number of industries to come up with methods to reduce natural gas use or is it demonstration of a technology that improves natural gas?

A: Group 4 is funding a study, not a demonstration project. A survey to determine the number of industries is unlikely to yield enough data to address the purpose and goals of this study. The study must include the descriptions of where natural gas is used in a facility and identify potentially viable natural gas efficiency technologies or innovative approaches to reduce or eliminate natural gas use, and will require, at a minimum, literature review, interaction with subject matter experts, and facilitated workshops as elements of a technical assessment. Refer to the solicitation manual, Section II.B.1.d, for additional details.

58. Q: Can you provide a working link for the document CPUC final decision 39314? The link does not work, neither clicked nor typed. (See page 5 footnote 1)

A: The link provided on page 5, footnote 1 appears to be functional. The link is also provided here:

http://docs.cpuc.ca.gov/PublishedDocs/WORD_PDF/FINAL_DECISION/39314.PDF

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Funding Qualification

59. Q: Can existing Intellectual Property owned by one or more of the project sponsors be counted as in-kind investment?

A: No, only expenditures made during the agreement term are considered as match funding. Please refer to the solicitation manual, Section I.F.2, for what qualifies as match funding.

60. Q: Please clarify what is “Advanced Practice” by citing a few examples.

A: Advanced Practice refers to innovative technologies or approaches that go beyond the standard requirements or typical practices to achieve measurable increased natural gas savings.

“’Advanced Practice’ Costs” means costs not charged to the Energy Commission that represent the incremental cost difference between standard and advanced practices, measures, and products used to implement the proposed project. For example, if the cost of purchasing and/or installing insulation that meets the applicable building energy efficiency standard is $1/square foot and the cost of more advanced, energy efficient insulation is $3/square foot, the Recipient may count up to $2/square foot as match funds.

61. Q: Is the Matching Funds qualification limited to tangible goods only or also to design/engineering services?

A: No, it is not limited only to tangible goods. Design/engineering services conducted for the project and during the term of the agreement, may qualify as in-kind match. Please refer to the solicitation manual, Section I.F.2, for what qualifies as match funding.

62. Q: If the host site already has equipment on site which is re-deployed for the demonstration project, would that qualify as in-kind capital contribution?

A: No, existing equipment that is being re-deployed for the demonstration project would not qualify as match. However, the cost of modifications made to the equipment that is necessary for the project could be considered as match funding. Please refer to the solicitation manual, Section I.F.2, for what qualifies as match funding.

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