Presented by:

Russ Lester

Cal CAN 2011 Climate and Agriculture Summit

Dixon Ridge Farms   Grower and Processor of Organic Walnuts;

  The largest handler of organic walnuts in the United States;

  We grow organic walnuts on over 300 acres, transitioning another 200 and buy about 2,500 more acres of organic walnut production from 67 growers

  But, Organic is less than 1% of total US Walnut Production

  Family farming in California since 1867 and organic since 1990;

  We follow a sustainable, whole systems approach to organic farming and business.

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Our Energy Goal Total farm and processing net energy self

sufficiency by 2012 for all types of energy We aim to achieve this goal while taking into account:

1. Carbon neutral or negative 2. Nitrous-oxide neutral or negative 3. Use non-food sources for energy 4. Energy costs should be reasonable 5. Transferable technology

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Current Green Energy Production

1. Solar   3,500 square feet of PV panels, 16 kW  Generates about $3,500/year of electricity per year   Very low maintenance   Specifications on all new buildings include loading

for solar panels of 6#/sq. ft.   Future increase to over 90,000 sq. ft   Side benefit of cooling by shading roof with panels   Solar is a perfect fit with freezer energy use and

biomass energy production   PPA- we pay 80% of retail rate, no capital invested

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Current Green Energy Production (cont.) 2.  Bio Max 50 – Manufactured by Community Power Corp (CPC), costs about

$500,000; PIER Grant from California Energy Commission (CEC) of $725,000

  Production   Hours: 16,870 hours on generator, over 21,280 hours on gasifier   Producer Gas: 1 million BTU per hour   Propane: Offsets $12-14,000/year during 5-week drying season   Electricity: Produces up to 50 kW or $35,000-$45,000/year   Heating: Use hydronic and hot air to heat our buildings & dryers   Local Use: Use 100% of produced energy on site   Fuel: Uses about 800,000 pounds of biomass (walnut shells) per year

  Environmental Impact   Walnut shells: Are a renewable, non-food source of energy   No Transportation Costs and Impacts   Carbon Cycle: Atmospheric CO2 absorbed by trees produces

walnuts, which provide food and shells for energy production used to dry and process walnuts, CO2 back to air, long-term carbon into soil

  No Waste: Use “char-ash” in compost, apply back into orchard for long-term carbon sequestration and soil amendment

  Net negative release of carbon: 1,000 year half-life in soil 5

Current Impediments

1. Emission Regulations and Fees

2. Char/ash Soil Application

3. Interconnection Rules

4. Funding & Other Issues

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Impediment 1: Emission Regulations & Fees   Issues and Background

•  We are cleaner than current emission standards for our air district

•  Normal time to issue Authorization to Construct (ATC) - 3 years

•  Length of time to issue Authorization to Operate (ATO) – 1 year ?

•  Costs – $28,600 in Fees and Studies, Not because of Pollution; Propane would have cost about $400 with same emissions

•  AQMD considers walnut shells & each renewable as a “new fuel”   Some Solutions

•  Should be based on fuel life cycle calculations •  Should be phased in for renewable power •  Fees should be reduced or eliminated for renewable fuels •  Expand Districts & coordinate goals - we all breathe the same air •  Need to balance all GHG’s, not just NOx •  I AM NOT SUGGESTING A RETREAT FROM AIR POLLUTION REDUCTION

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Impediment 2: Char-ash Application  We face potential oversight from the following agencies:

  USDA, NRCS, US EPA, CA EPA, Yolo and Solano County Dept. of Ag and Dept. of Health, CIWMB, CA OSHA, US OSHA, WRCB, CCOF, USDA, DFG

  Others?

 Costs- about $5,700 for testing

 Char-ash testing shows that it is non-toxic

 Good news – partial grant to UCD to study soil application for nitrous oxide reduction and results look very promising

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Impediment 3: Interconnection Rules   Catch 22

  Rule 21/Net Meter (NEM) prohibits biomass & biogas on same meter with solar & wind   FIT prohibits interconnection of RGF (Renewable Generation Facility) that took incentive

money or CEC PIER grants   FIT

  Fees of $50,000- $150,000?   Don’t know costs until we pay a $5,000 non-refundable fee   Game stopper for small renewable generators –Simply Makes It Not Economic   MPR (Market Price Referent, based on Nat. Gas) is not high enough to pay for these costs

  Simplify & Eliminate conflicts between the two programs.   Allow all renewable fuels on both programs   Use Rule 21/net meter for small RGF, electricity primarily used on-site, annual basis   Use AB 1969/FIT for larger RGF, electricity primarily used for revenue   Accommodate change. RGF’s can change between programs as their needs change   Accommodate import/export change. Grid stability and capacity would be increased.   Fully develop RPG. Existing Net Meter rules limit resource types, therefore potential.   Encourage Conservation. RGF’s would not make “use-it-or-lose-it” decisions.

  Proposal –SB 489 – Include all renewable fuels in the Net Metering/Rule 21 Program 11

Impediment 4: Funding & Other

  Increase energy efficiency incentives and programs  Grant money / loan guarantees need to be increased  Grant applications need to be reasonable and progressive  Direct grants to emerging but proven technology  Renewable Energy Credits (RECs) – Should go to RGF  Centralized Power & Distribution is too expensive, inefficient  Renewable Distributed Generation (RDG) increases security  RDG reduces environmental and energy costs

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Status Report   Energy Generation and Reduction

  30% reduction of electricity use due to energy efficiency projects   25% reduction of electricity purchased due to generation   Offset about 30% of our propane use via producer gas   Reduce dryer heat needs by about 60% via Combined Heat and

Power (CHP) and recirculation  Total reduction is about 40% of all energy used!   Already have exceeded AB 32 goal of 33% for 2020!

  Costs  Cost to produce electricity and propane onsite is about the same as

retail price, (not including APCD & PGE Fees)  May be revenue generating depending on GHG reduction market

and excess energy generation sales 13

Future Projects

  More solar panels on the roofs – possibly up to 90,000 sq ft   Walnut Oil, 2011

  Press inedible walnuts into oil for biodiesel or walnut oil fuel   Estimated 12-14,000 gallons produced per year under current production   Would supply 75% of current diesel needed for farm equipment   Estimated cost of $2.50 per gallon

  Change gas generator to a “diesel” generator, 2012   85% producer gas, 15% liquid fuel (diesel, synthetic-diesel, bio-diesel or vegetable oil)   100 kW of electrical production instead of 50 kW

  Bio Max 100, 2012? - use rest of shells to produce an additional100 kW or 200 kW   Emissions reduction - use algae to reduce CO2 and NOx, then algae for fuel or fertilizer   Use CHP in Absorption chillers on HVAC and freezers

  Should save about $18,000/year   Research Studies

  Carbon and Nitrous Oxide – UCD, NRCS, DRF   Char ash use – CPC, UCD, DRF   Energy efficiency improvements – UCD, PG&E, DRF & CPC   Energy production – UCD, CA Biomass Collaborative, DRF & CPC

 We will be energy self-sufficient! 16

Conclusion   Stimulate short and long-term economy and job gains.   Move the USA and CA energy toward domestic self-sufficiency.   Encourage maximum conservation and efficiency.   Meet the goals of AB 32 and the Renewable Portfolio Standard.   Diversification of energy types is good, stabilizing the market,

power generation and costs.   Reduce GHG outputs   Reduce Costs of Operations   These solutions can be implemented IMMEDIATELY   THESE GOALS CAN BE MET & AGRICULTURE CAN PLAY A

HUGE ROLE 17