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Indiana’s Clean Energy Credit Program (Energy Efficiency & Renewable Energy Set-aside)

Indiana’s Clean Energy Credit Program (Energy Efficiency & Renewable Energy Set-aside). Roger Letterman Sr. Environmental Manager Office of Air Quality Compliance Branch. Background. Clean Energy Credit Program (CECP) is implemented through the Energy Efficiency/Renewable Energy Set-aside

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Indiana’s Clean Energy Credit Program (Energy Efficiency & Renewable Energy Set-aside)

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  1. Indiana’s Clean Energy Credit Program(Energy Efficiency & Renewable Energy Set-aside) Roger Letterman Sr. Environmental Manager Office of Air Quality Compliance Branch

  2. Background • Clean Energy Credit Program (CECP) is implemented through the Energy Efficiency/Renewable Energy Set-aside • EE/RE Set-aside established in Indiana’s NOx Budget Trading Program • EE/RE Set-aside is “pool” of NOx allowances for EE/RE projects • One NOx allowance = one ton of NOx emissions

  3. NOx Budget Trading Program • Regional trading program involving 21 states in eastern U.S. • Sources in the trading program must hold NOx allowances equal to ozone season (May 1 - September 30) NOx emissions • NOx allowance value fluctuates - currently between $1,800 and $2,300 per allowance

  4. Eligible Projects • Demand side management • Highly efficient generation • Renewable energy projects • Wind • Solar • Biomass • Methane capture

  5. Demand Side Management • Lighting efficiency/control projects • Building retrofits (insulation improvements, window replacements) • Process equipment efficiency improvements • Heating and cooling efficiency improvements • Reducing fuel usage

  6. Highly Efficient Generation • Combined heat and power at least 60% efficient • Microturbines (>500 kW) at least 40% efficient • Combined cycle projects > 500 kW at least 50% efficient • Fuel cell systems at least 40% efficient

  7. Renewable Energy • Wind • Solar • Biomass combustion • Methane capture/combustion • Sanitary landfills • Water or sewage treatment plant • Anaerobic digestion - CAFOs

  8. Examples • Commercial Building Envelope Retrofit • Retailer completes variety of energy efficient retrofits including: • Compact fluorescent lighting, energy management systems, energy efficient HVAC/windows and LCD exit signs • 4 million kWh saved during the ozone season • Energy savings = 3 NOx allowances • 3 allowances x $2,050 x 5 years = $30,750

  9. Examples (continued) • Landfill Methane Generation • Landfill captures/compresses methane that fires reciprocating engines driving four 800 kilowatt generators • Generators produce 11,750,400 kWh of electricity for distribution to the grid • Electricity generated = 9 NOx allowances • 9 allowances x $2,050 x 5 years = $92,250

  10. Examples (continued) • Wind Turbine Project • Wind development company installs ten turbines with maximum output of 1.5 MW • Turbines generate 40% of maximum capacity and 22,032,000 kWh during the ozone season • Electricity generated = 17 allowances • 17 allowances x $2,050 x 5 years = $174,250

  11. Examples (continued) • Combined Heat and Power Project • Athletic facility operates two 60 kW microturbines with waste heat used for hot water production and heating two swimming pools • Electricity generated and heat used = 1 NOx allowance • 1 allowance x $2,050 x 5 years = $10,250

  12. Applicant Requirements • Project sponsor must contact U.S. EPA to establish a general account for holding NOx allowances • Projects must result in a least one ton of NOx reductions/savings • Projects may be combined to meet the one ton requirement

  13. Application Process • Submit application by September 1 of year prior to anticipated implementation • IDEM/OEDD review applications and requests additional information where needed • After approval, allowances are reserved for following ozone season

  14. Allocation Process • Results submitted each year after implementation • IDEM/OEDD review results to verify NOx savings • Appropriate NOx allowances are calculated • IDEM notifies U.S. EPA to transfer the NOx allowances from EE/RE set-aside

  15. Program Benefits • Energy savings - reduced fuel usage, reduction in electricity demand • Air quality - reduced pollution from electric generators, incentive for “clean” energy • $$ - provides economic incentive • Innovation - provides incentives for newer, cleaner energy and energy efficiency

  16. Additional Information • www.IN.gov/idem/energycredit • Guidance manual • Application materials • Links for measurement and verification protocol guidance • Contacts • Roger Letterman 317/232-8342 • Ryan Brown 317/232-8961

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