GHG BACT Developments

1. GHG BACT Developments Justin Fickas Clay Raasch

2. Overview • Since January 2011, Greenhouse Gases (GHGs) have been evaluated under Prevention of Significant Deterioration (PSD) permitting • The GHG BACT process can prove challenging • Learning curve for both permitting authorities and industry • What are the current trends regarding GHG BACT?

3. Phase II Report on BACT for GHGs • Work Group Phase II report - dated August 5, 2010 (made public October 5, 2010) • Report details considerations for conducting five step “top down” BACT analysis and how to incorporate efficiency into this process • Energy Efficient Processes and Technologies (EEPT) • Considerations for possible level of analysis • Define part of facility subject to BACT review • Describe equipment/operations for which BACT limit or work practice standard must be developed • Equipment-level, production-level, and facility-level • Recommendations about how Innovative Control Technology (ICT) waiver can be used to encourage innovative technologies • Many of these concepts incorporated into the EPA PSD and Title V Permitting Guidance for Greenhouse Gases (March 2011) • http://www.epa.gov/nsr/ghgpermitting.html

4. Pre-Step 1: Defining the “Source” (1/2) Applicant defines the goals, objectives, purpose, or basic design for the proposed source/modification BACT process does not typically redefine these basic design elements When fuel efficiency or overall production process efficiency are considered as an available control option, defining the source/project is a critical step in the BACT process

5. Pre-Step 1: Defining the “Source” (2/2) • March 15th, 2012 Letter from EPA Region 5 to the Wisconsin Department of Natural Resources (WDNR) • Letter was in reference to a draft PSD permit for the Milwaukee Metropolitan Sewerage District Jones Island Water Reclamation Facility • Permit involved installation of five new simple cycle combustion turbines • Operate on landfill gas with natural gas as a backup • Draft permit comments stated that Step 1 of the GHG BACT did not consider either combined cycle turbines or combined heat and power (CHP) systems • Comments included request that GHG BACT be revised to consider these items in Step 1 of the BACT • Redefining the source? • WDNR Response – Final Permit Issued May 25, 2012 • Combined Cycle not Appropriate for the Site (Footprint Issues) • Simple Cycle Similar to CHP

6. Step 1: Identify Available Controls (1/2) • Resources are still limited for identifying available criteria pollutant control options applicable to GHGs • EPA’s RBLC database includes limited GHG information • Limited determinations of BACT by regulatory agencies for other similar sources • Air pollution control equipment vendors have not previously targeted GHG emissions reductions in the absence of any regulatory driver • Assuming no add-on controls for GHGs will be available for most emission units, the only available control option will be “lower-emitting process” type GHG control options • Primary GHG control options identified by the Work Group or EPA to date are fuel selection, energy efficiency, and CCS – “redefinition of the source possible” • What controls are available for non-CO2 GHGs?

7. Step 1: Identify Available Controls (2/2) • Identify available EEPTs • Review unit’s energy performance with “benchmark” technology in use, mitigation options for specific industry sectors, and new available EEPTs potentially built outside of US • Sets of efficiency measures may be considered as available technology • For modifications to existing units, consider extent of modification, when identifying potential efficiency gains

8. Step 2: Eliminate Technically Infeasible Controls (1/2) • Work Group and current guidance endorse the long standing EPA policy for Step 2 presented in the 1990 Draft NSR Manual • Evaluations of technical feasibility should consider various aspects of the control option including: • Development stage (licensing and commercial sales vs. only R&D or pilot scale) • Scope of installations (i.e., how many similar sources have implemented this control option?) – feasible if operated on the same type of source • Physical or chemical properties of the emissions stream in comparison to emissions streams from similar sources successfully implementing the control option

9. Step 2: Eliminate Technically Infeasible Controls (2/2) • No obvious technical limitations to fuel selection and energy efficiency for new sources • Elimination of EEPTs may be based on concerns about reliability/operational characteristics of a technology • GHG Specific Considerations – Availability of Technology • Lack of a commercial guarantee, by itself, is not sufficient grounds to determine technical infeasibility • CCS may not be technically feasible in certain cases • Low purity CO2 streams • Low CO2 emission amounts

10. Step 3: Rank Remaining Control Options No significant consolidated database of GHG emissions performance of many industrial source types as there is for criteria pollutants Typical metrics for comparing available control options for criteria pollutants may not apply to certain GHG controls or may be very difficult to explicitly quantify For common fossil-fuel fired combustion units, like boilers and engines, GHG emissions performance on a mass pollutant emitted per energy output basis is the most likely basis for comparison (i.e., lb/MW steam or lb/hp-hr engine output) If energy efficiency is selected as the top control option, what level of energy consumption per unit output constitutes BACT for new and existing sources?

11. Step 4: “Top Down” Evaluation of Controls • Start with highest ranked control option from Step 3 and evaluate potential for adverse energy, environmental, and economic impacts. If no adverse impacts, select BACT based on application of remaining control option. • Energy Impacts: Consider energy consumption of GHG control options • Parasitic load from a potential GHG control option is too high based on limited emission reduction • Environmental Impacts: Consider water, waste, air toxics, and criteria pollutant impacts from GHG controls options • Collateral criteria pollutant increases from GHG control options cannot jeopardize compliance with criteria pollutant BACT limits, NAAQS, or Increment • Economic Impacts: Costs should be expressed on a CO2e basis, but no clear threshold has been established – CCS should be addressed

12. Step 5: Select BACT (1/2) • Output-based limits (e.g., lb CO2/MWh, lb CO2/lb steam, lb CO2/hp-hr, etc.) are generally preferred over fuel-input based standards tied to fuel carbon content • Analysis should confirm/deny suitability of EEPT or set of EEPTs selected as BACT • BACT selection should take into effect changing loads or energy efficiency and compliance with the BACT limits • Energy efficiency may vary with time due to degradation of equipment or because of operational issues

13. Step 5: Select BACT (2/2) • No NAAQS for GHGs, so GHG BACT limits should be expressed on an annual average basis (i.e., 12-month calendar year or 365-day rolling average basis) • If output-based GHG emissions increase during startup and shutdown, secondary lb/event BACT limits may be necessary • Compliance demonstration methodologies for units with existing CEMs may be straightforward by adding GHG analyzers to existing system • For emission units without CEMs, periodic stack testing may be required in conjunction with fuel usage or output tracking

14. Recent EPA GHG BACT Actions (1 of 2) • Palmdale Hybrid Energy Center, Antelope Valley, CA (Region 9) • http://www.epa.gov/region9/air/permit/palmdale/palmdale-final-permit-10-2011.pdf • Hybrid Power Project – CCT Component • 12-month rolling average CO2e tpy limit sitewide • 365-day rolling average source limit (lb CO2/MWh) net • Lower Colorado River Authority – Ferguson, Horseshoe Bend, TX (Region 6) • http://www.epa.gov/earth1r6/6pd/air/pd-r/ghg/lcra_final_permit.pdf • CCT Project • TPY limits (365-day rolling average) for CO2, CH4, and N2O established for each combustion turbine • Ton CO2/MWh (net) limit for each combustion turbine

15. Recent EPA GHG BACT Actions (2 of 2) • Pioneer Valley Energy Center (Region 1) • http://www.epa.gov/region1/communities/pdf/PioneerValley/PVECFinalPermitDecisionApril2012.pdf • Combine Cycle Combustion Turbine Project • BACT CO2e Limit – 895 lbs of CO2e/MWhgrid365 day rolling average • Initial source test for CO2, and use emission factors from 40 CFR Part 98 for other GHGs • Permit Condition - If source test does not meet the design emissions limit, then the owner/operator shall remedy the CCT’s failure to meet the design emissions limit, and shall not combust any fuel in the CCT until the owner/operator demonstrates compliance with the emissions limit during a subsequent test

16. Questions? Justin Fickas 53 Perimeter Center East Suite 230 Atlanta, GA 30346 Office: (678) 441-9977 Cell: (678) 549-9755 Fax: (678) 441-9978 http://www.trinityconsultants.com/atlanta/ jfickas@trinityconsultants.com