Paul Dubenetzky
Quality Environmental Professionals, Inc.
(317) 351-4255
[email protected]
 Section 111 Contains the NSPS
Provisions of the Clean Air Act
 111b are the Provisions that Authorize
Federal Rules that Directly Apply to New
Sources
 Over 100 NSPS Covering both criteria
and non-criteria emissions since 1970.
1
 111d is a Rarely Used Provision of the
Clean Air Act that Authorizes NSPS-like
Best System of Emission Reduction
Guidelines to Only Non-Criteria Pollutants
From Existing Sources
 EPA has Proposed Both 111b & 111d
Rules To Implement U.S. EPA’s Climate
Action Plan on Existing Electric
Generators
 The 111b Rule Sets Traditional CO2 Limits that
Can Currently be Achieved Only by Natural Gas
Combined Cycle Turbine Generators or
Gasified Coal Combined Cycle Turbine
Generators with Partial CCS
 The 111d Rule Sets State-Wide CO2 Emissions
Targets and the States Develop Compliance
Plans Over 15 Years
2
 Increase Efficiency of Existing
Generating Units
 Install More Low Emitting Generating
Units
 Prioritize Dispatch to Low Emitting
Generating Units
 Improve Energy Efficiency “Outside the
Fence line”
 Increase Efficiency of Existing
Generating Units
 Shift Generation from High Emitting to
Existing Low Emitting
 Shift to Clean Energy Renewables
 Improve Energy Efficiency “Outside the
Fence Line”
3
lb/net MWh
2012 Historic
2021
2020 Projected
1882
2022 CCP
1,578
2025 CCP
1,419
2028 CCP
1,309
tons/year
107,299,591
104,669,332
92,010,787
83,700,336
78,901,574
2030 CCP
76,901,574
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1,242
Does Not Directly Affect Manufacturers
May Raise Cost of Electricity
May Trigger Demand for Products Like
Insulation, LEDs, etc.
Triggers a New Look at ROI of Efficiency
Projects
Beyond Light Bulbs, Think Combined Heat &
Power
4
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Fossil Fuel Fired Electric Generation Loses
60-65% of Energy Input to Heat
Transmission Loses Average 7% Delivering to
Consumer
Combined Heat & Power Captures Lost Heat
and Minimizes Transmission Losses
Replacing Higher GHG Producing Electricity,
Can Generate Compliance Credits Under
111d
5
 2009 installation
 Two 15 MW gas-fired combined cycle
gas turbine electric generators for
campus use
 Heat Recovery Boilers to generate
additional steam for heat and chillers
 29% less energy used than to separately
generate electricity and steam
Two 15 MW NGCC units
generate 210,000 MWh/yr
2,700,000 MMBtu per year natural gas
consumption
117 lb CO2/MMBtu
158,000 tons CO2 emitted
6
Power Credit
210,000 MWh/yr
+7% line loss credit
226,000 MWh/yr
e-Grid 2010 1745 lbs CO2/MWh
197,000 tons/yr CO2 displaced from EGUs
Thermal Credit
1,200,000,000 lbs steam per year generated
1,500,000 MMBtu displaced boiler fuel (NG)
87,750 tons CO2 displaced from steam
generation
7
Total Credit
Power Credit
Thermal Credit
CHP Emissions
197,000 tons
+ 87,750 tons
-158,000 tons
126,750 tons
 Steel Mills and Refinery in NWI All
Installed CHP projects 15-20 Years Ago
 Coke Oven, Blast Furnace, Refinery, &
Natural Gas Generate Electricity for Grid
 Digester Gas from WWTP & CAFO
 Landfill Gas
 Ag Waste
 Micro Turbines (KW rather than MW)
 Waste Heat to Power
8
 Widely Used at Large and Small
Installations across the Country
 10-12 % of Electricity Generated in US
comes from CHPs
 Roughly Half of the Installations are
Commercial & Institutional
 Often cost-effective on their own
 111d Compliance Plans most likely
Increase cost effectiveness
 One of the lowest cost options for
reducing GHG emissions, can generate
compliance credits
 Opportunities for Utilities to subsidize
projects or otherwise pay for credits
9
CHP Is a Cost‐Effective Resource
Source: Bloomberg Sustainable Energy Factbook 2014
CHP Saves Energy and Reduces Emissions
Category
Annual Capacity Factor
Annual Electricity
Annual Useful Heat
Capital Cost
Annual Energy Savings
Annual CO2 Savings
Based on:
10 MW
CHP
10 MW
PV
10 MW
Wind
85%
25%
34%
74,446 MWh
21,900 MWh
29,784 MWh
103,417 MWht
None
None
$24 million
$45 million
$24.4 million
343,747 MMBtu
225,640 MMBtu
306,871 MMBtu
44,114 Tons
20,254 Tons
27,546 Tons
10 MW Gas Turbine CHP ‐ 30% electric efficiency, 70% total efficiency, 15 PPM NOx Electricity displaces National All Fossil Average Generation (eGRID 2010 ) ‐
9,720 Btu/kWh, 1,745 lbs CO2/MWh, 2.3078 lbs NOx/MWH, 6% T&D losses
Thermal displaces 80% efficient on‐site natural gas boiler with 0.1 lb/MMBtu NOx emissions
10
The Remaining Potential for CHP Is Large
• Technical Potential of 120+ GW
(Industrial 60 GW; Commercial/Institutional 63
GW). (ICF estimates)
• 40+ GW with payback less
than 10 years. (AGA)
• 111(d) could support 20 GW of new CHP nationwide. (ACEEE)
Source: ICF Internal Estimates
• 111(d) could support 10 GW
of CHP potential with concentrations in the Midwest and Southeast.
(CCAP)
9
 Enforceability
 Performance
 Measurable
 Accountability
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 Overall Plan Must Contain Enforceable
Measures
 BUT, each individual reduction strategy is
not enforceable by the USEPA or the
State
 Plan must contain corrective measures if
individual elements are less than forecast
 Plan must show how it will achieve
compliance with state budget
 Plan must show how individual measures
contribute to the plan
 Include Plan to track progress
12
 Reductions must be reliably measured
using technically sound methods
 Protocols exist to document and verify
avoided emissions from CHP
 State or utility must make up shortfall
using the full range of options in the plan
 Individual CHP owner is not liable under
compliance plan
 Individual CHP owner may be
responsible for agreements entered to
obtain financial support
13
 CHP offers air quality & economic
benefits
 CHP is a cost-effective in a number of
industrial and institutional applications
 CHP produces low cost GHG reductions
 CHP is included in many existing state
efficiency and clean-energy programs
 CHP meets EPA’s requirements for a
111d compliance option
EPA CHP Partnership
http://epa.gov/chp/index.html
Center for Clean Air Policy
http://ccap.org/tag/combined-heat-and-power/
National Association of State Energy Officials
http://111d.naseo.org/
Alliance for Industrial Efficiency
http://www.dgardiner.com/alliance-for-industrial-efficiency/
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CHP AS A COST‐EFFECTIVE
ELECTRIC RESOURCE
CHP AND ELECTRIC RATES
CHP Economics Driven by Electric/Gas Prices
Coal/Oil Plant Retirements
New NGCC
T&D Investments
Grid Security Investments
Industrial Electric Rates
• 5th Lowest (2003)
• 29th Lowest (2013)
• SUFG Forecast 34% Increase
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CHP AS AN ELECTRIC RESOURCE
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Supply Side and Demand Side Resources
Integrated Resource Plans
SB 412 (2015 Session)
IURC Rulemaking
Utility IRPs and Certificate of Need
Utility Stakeholder Meeting
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CHP AS A COST‐EFFECTIVE RESOURCE
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CHP Cost vs. Cost of Other Resources
Base Load Resource
Defers Investment in New Utility Plant
Enhances Customer and Grid Reliability
111(d) Compliance Measure
IRP Modeling (EE, IURC, SUFG, IDEM)
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CHP AND ENERGY EFFICIENCY PLANS
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SB 412 (2015 Session)
DSM and EE Goals Eliminated
IURC Approved EE Plans Every 3 Years
IURC EE Rulemaking
EE Plan Modeling
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CHP AND UTILITY ACCEPTANCE
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Utility Cooperation is Important
Business Model Issues
Lost Revenue and Stranded Assets
Inter‐class Subsidies
Interconnection
Standby Rates
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POSSIBLE SOLUTIONS
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Eliminating the Artificial “Meter Barrier”
Treat CHP as a Cost‐Effective Resource
De‐Couple Cost Recovery from Revenue
Allow Behind the Fence Ratebase Investment
Leverage Customer and Utility Expertise
Leverage Customer and Utility Financial Resources
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SECTION 111(d) STATE PLAN
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Consistency in Modeling
IRPs
EE Plans
IURC Resource Analysis
SUFG Forecast
IDEM’s State 111(d) Plan
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CONCLUSIONS
• Determine CHP Value as a Compliance Measure and Electric Resource
• Identify CHP Opportunities (Industrial/ Manufacturing/Institutional)
• Determine Role of CHP and Industrial EE as 111(d) Compliance Measures
• Address Utility Business Model Issues
• Coordination Between IURC, SUFG, and IDEM in Resource Planning and State 111(d) Compliance
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