California Hydrogen Energy Bill Takes Leap Forward
California Governor Gavin Newsom recently signed Senate Bill (SB) 1350 into law, expanding the state’s definition of eligible renewable electrical generation facilities to include those that convert renewable hydrogen into electricity using turbines. Introduced in February by State Senator Jerry McNerney, D-Stockton, the legislation received unanimous approval from both the state Senate and Assembly. The bill aims to facilitate California’s broader clean energy transition by officially classifying electricity generated from green hydrogen as a renewable energy source, providing financial incentives to power plants that adopt the fuel.
SB 1350 operates within California’s Renewables Portfolio Standard, which mandates that electric utility companies source at least 60% of their electricity from qualified clean energy by 2030. To qualify under the new legislation, power generation facilities must meet three specific criteria. The hydrogen must be produced from state-certified renewable sources, the facility must use a fuel blend containing at least 20% green hydrogen, and the facility’s fuel use must be certified to reduce air pollution. Facilities that meet these requirements can generate compliance credits, which they may sell to non-qualifying facilities for a profit.
The legislation was developed to address the need for long-term renewable energy storage and grid reliability. Green hydrogen is created using excess renewable energy, such as wind and solar power, allowing the energy to be stored and later converted back into electricity through fuel cells or combustion turbines at any time. This capability helps mitigate the natural intermittency of solar and wind generation. By incentivizing the use of green hydrogen, the bill provides existing natural gas power plants with a regulatory pathway to transition toward zero-carbon fuels using current infrastructure.
Co-sponsored by the Green Hydrogen Coalition and the State Building and Construction Trades Council of California, the bill provides regulatory certainty for utilities and developers investing in the state’s hydrogen economy. The legislation is designed to unlock capital for dispatchable clean power projects, support regional grid stability, and create new employment opportunities in the energy sector. Following the bill’s passage, Senator McNerney stated that the Legislature’s overwhelming approval sends a clear message that green hydrogen is the game-changer needed to meet the state’s climate goals and protect good-paying jobs throughout California.
