Environmental Regulations and Combined Heat and Power€¦ · Combined Heat and Power ACEEE / CEE...

1 | Energy Efficiency and Renewable Energy eere.energy.gov

Katrina Pielli

U.S. Department of Energy

Environmental Regulations and Combined Heat and Power

ACEEE / CEE National Symposium on

Market Transformation

March 26, 2013

Washington, DC


DOE Activities in Support of August 30, 2012 Executive Order

– “Accelerating Investments in Industrial Energy Efficiency”

• Better Plants Challenge & Program

• State & Local Energy Efficiency Action Network

– IEE and CHP Working Group

• Regional Industrial EE / CHP Dialogue Meetings

• Boiler MACT Technical Assistance Effort

– Background on Boiler MACT Rule

– Compliance Options

– DOE Technical Assistance Program

– Ohio Pilot Program

– National Role Out of Technical Assistance

• Upcoming HR 6582 Report

Today


Better Plants Challenge & Program


Better Plants Overview

• Industrial component of the Better Buildings Challenge,

– National leadership initiative that calls on CEOs, university presidents, and

state and local leaders to create American jobs through energy efficiency

– Supports President’s goals to improve energy efficiency in commercial and

industrial buildings by 20% or more by 2020 and help manufacturers save

$100 billion on their energy bills over the next decade

– Launched December 2011

• Manufacturers can engage in:

– Better Plants Challenge

• Small group of market leaders that pursue leading-edge energy efficiency

strategies and agree to share their approaches and results with the public

– Better Plants Program

• Broader-based initiative composed of over 100 manufacturers that make

energy efficiency commitments and report progress once a year to DOE

– DOE provides recognition for efforts and targeted TA to speed adoption

of sound energy management practices


Better Plants Snapshot

• 118 companies, representing over 1,400 plants and

more than 6% of the total U.S. manufacturing energy

footprint

• Reported cumulative savings

– About 45 trillion BTUs

– Over $240 million

• In the pipeline – through FY12 training events

– Reached over 250 participants

– Helped identify over 750 billion BTUs of energy savings and

more than $4.5 million in cost savings


Better Plants Challenge Partners


Challenge Partner Highlights

• Partners commit to:

– Set a goal to improve their energy

intensity by 25% over 10 years

across their corporation

– Conduct at least one “showcase

project,” which is a near-term

demonstration of exceptional

energy savings within a single

facility

– Pursue at least one

“implementation model,” which is a

corporate wide initiative launched

to overcome one or more persistent

barriers to energy efficiency

– Agree to share energy performance

data, showcase project results, and

implementation models with the

public

• Showcase Projects

– Nissan is building a $200 million paint plant in Smyrna, TN, which it estimates will be 30% more energy efficient than the plant it is replacing.

– Alcoa is constructing a $21 million recycling facility in Barberton, OH, which is projected to be 25% more efficient than comparable plants

– Saint-Gobain implemented a $4 million compressed air system upgrade in Milford, MA, which will result in 15% energy savings relative to the previous compressed air system

• Implementation Models

– 3M administers a capital set aside program that reserves $1 million per year to be invested exclusively in energy efficiency projects

– Legrand is installing submeters at all U.S. commercial and industrial facilities and will use the resulting data to drive a corporate-wide employee engagement initiative

– Alcoa is requiring all capital investments above a certain threshold to undergo a full energy efficiency review


State & Local Energy Efficiency Action Network


State & Local Energy Efficiency Action Network: Industrial Energy Efficiency and CHP Working Group

• Chaired by: Todd Currier, Washington State University Extension

Energy Office, Joshua Epel, Colorado Public Utilities Commission

• “Guide to the Successful Implementation of State CHP Policies”

(March 2013)

• Informs state utility regulators and other state policymakers with

actionable information to assist them in implementing key state

policies that impact CHP.

• Discusses five policy categories and highlights successful state

CHP implementation approaches within each category:

– Design of standby rates

– Interconnection standards for CHP with no electricity export

– Excess power sales

– Clean energy portfolio standards (CEPS)

– Emerging market opportunities—CHP in critical infrastructure

and utility participation in CHP markets.


State & Local Energy Efficiency Action Network: Industrial Energy Efficiency and CHP Working Group

• In development: Roadmap for Successful

Implementation of Industrial Energy Efficiency Programs

• Additional projects in support of new resources, including

webinars and state-specific engagement

To stay updated on SEE

Action activities and

resources, sign-up for email

alerts:

http://www1.eere.energy.gov/seeaction

/index.html


Regional Industrial EE / CHP Dialogue Meetings


DOE Regional Dialogue Meetings

• DOE Regional Industrial Energy Efficiency & Combined Heat and

Power Regional Dialogue Meetings – In-person, one day dialogue meetings that focus on developing and

implementing state best practice policies and investment models that

address the multiple barriers to greater investment in industrial energy

efficiency and CHP.

• Partner with regional EE organizations (MEEA, SEEA / IEEN,

NEEP) and DOE regional Clean Energy Application Centers to

ensure local follow-up

Western Industrial Energy

Efficiency & Combined Heat and

Power Regional Dialogue Meeting Late Spring / Early Summer. TBD


DOE State Technical Assistance

• Significant opportunity for DOE to support states efforts

to address state and local barriers to accelerate

investment in Industrial EE and CHP.

• DOE is working closely with Ohio, Oregon and New

York.

• Opportunities for states that want to partner with DOE,

identify opportunities at the state level, and develop best

practices that can be implemented around the country.


Boiler MACT Technical Assistance Effort


Clean Air Acts Standards for Boilers and

Incinerators

• On December 20, 2012, EPA finalized a specific set of

adjustments to March 2011 Clean Air Act standards for

boilers and certain solid waste incinerators

– Area Source Boiler Rule

– Major Source Boiler Rule (ICI Boiler MACT)

– Commercial and Industrial Solid Waste Incinerators MACT

• Adjustments based on new data and additional

information on real-world performance

– Maintain public health benefits by reducing toxic air pollution,

including mercury and particulates

– Increase flexibility of compliance

– Maintain cuts in the cost of implementation represented by

March 2011 rule


ICI Boiler MACT

• Major source is a facility that emits:

– 10 tpy or more of any single Hazardous Air Pollutant, or 25

tpy or more of total Hazardous Air Pollutants (HAPs)

• Rule significantly impacts oil, coal, biomass, and process gas boilers

– Emission limits must be met at all times except for start-up and shutdown periods

– Controls are potentially required for Hg, PM, HCI, and CO

– Also includes monitoring and reporting requirements

– Limits are difficult (technically and economically) for oil and coal boilers (especially older units)


CHP as a Compliance Strategy

• Compliance limits may be expensive for many coal and oil users

• May consider converting to natural gas

₋ Conversion for most oil units?

₋ Boiler replacements for coal units?

• May consider moving to natural gas CHP

₋ Represents a productive investment

₋ Potential for lower steam costs due to generating own power

₋ Higher overall efficiency and reduced emissions

₋ Higher capital costs, but partially offset by required compliance costs or new gas boiler costs

₋ State / local / utility incentives can help


Affected Coal/Oil Boilers by Region

CEAC

Region # Coal

Boilers

Coal

Capacity

(MMBtu/hr) # Oil Boilers Oil Capacity

(MMBtu/hr)

Total

Affected

Boilers

Total

Capacity

(MMBtu/hr)

Gulf Coast 16 4,772.0 11 2,694.4 27 7,466.4

Intermountain 29 12,596.0 6 898.5 35 13,494.5

Mid-Atlantic 153 30,747.5 88 9,875.5 241 40,623.0

Midwest 360 84,197.1 122 15,311.3 482 99,508.4

Northeast 19 4,612.0 107 10,391.5 126 15,003.5

Northwest 23 3,238.0 23 5,066.7 46 8,304.7

Pacific 5 746.0 13 1,393.2 18 2,139.2

Southeast 186 39,710.1 164 16,981.4 350 56,691.5

Total 791 180,618.7 534 62,612.5 1,325 243,231.1


ICI Boiler MACT - Potential CHP Capacity

Fuel Type Number

of Facilities

Number of Affected

Units

Boiler Capacity

(MMBtu/hr)

CHP Potential

(MW)

CO2 Emissions

Savings (MMT)

Coal 351 791 180,619 18,064 114.3

Heavy Liquid 151 319 41,821 4,182 19.8

Light Liquid 215 215 20,791 2,080 9.9

Total 717* 1,325 243,231 24,326 144.0

*Some facilities are listed in multiple categories due to multiple fuel types; there are 556 ICI affected facilities

•CHP potential based on average efficiency of affected boilers of 75%; Average annual load factor of 65%, and simple cycle gas turbine CHP performance (power to heat ratio = 0.7) • GHG emissions savings based on 8000 operating hours for coal and 6000 hours for oil, with a CHP electric efficiency of 32%, and displacing average fossil fuel central station generation


DOE CHP Assistance: Regional Clean Energy Application Centers (CEACs)

Eight Regional CEACs & International District Energy Association

• Market Assessments: Analyses of CHP

market potential in diverse sectors, such as

health care, industrial sites, hotels, & new

commercial and institutional buildings.

• Education and Outreach: Providing

information on the benefits and applications

of CHP to state and local policy makers,

regulators, energy end-users, trade

associations and others.

• Technical Assistance: Providing technical

information to energy end-users and others

to help them consider if CHP makes sense

for them. Includes performing site

assessments, producing project feasibility

studies, and providing technical and

financial analyses.

http://www1.eere.energy.gov/manufacturing/distributedenergy/ceacs.html




• DOE is providing site-specific technical and cost information on clean

energy compliance strategies to those major source facilities affected by

the Boiler MACT rule currently burning coal or oil. – These facilities may have opportunities to develop compliance strategies,

such as CHP, that are cleaner, more energy efficient, and that can have a

positive economic return for the plant over time

• DOE Boiler MACT Technical Assistance program was piloted in Ohio

starting in Feb. 2012 and has now been rolled out nationally

DOE Boiler MACT Technical Assistance


• Contact each facility to explain the program and the

analysis being offered

• Provide information on CHP as an alternative approach

sites can consider when developing a compliance

strategy

• Verify the specific site assumptions being used in the

analysis

• Conduct the decision tree analysis (simple spread sheet)

comparing strategy options

• Present results to the site

Technical Assistance Approach


Decision Trees

• Provides available site data: – General Site information

– Boiler information/configuration

– Compliance and conversion cost estimates

• Calculations – Average Steam Load

– CHP Sizing

– CHP Paybacks compared to other options

– 5 and 10 year cash flows

– IRR and NPV


Ohio – U.S. DOE Pilot Program

“Because of coal plant retirements, educating consumers on combined

heat power is of particular interest to the PUCO. A facility’s decision to

invest in CHP may constitute a rational market response that not only

benefits the facility but which will also supports grid reliability in Ohio.”

- PUCO Chairman Todd Snitchler. February 23, 2012

http://www.puco.ohio.gov/puco/index.cfm/industry-information/industry-topics/us-doe-pilot-program-for-

combined-heat-power/

• September 2011: Ohio Gov. John Kasich hosts energy summit

and expresses interest in promoting CHP for its economic and

environmental benefits.

• Winter 2011: U.S. DOE, through the Midwest Clean Energy

Application Center, offers to pilot technical assistance to boiler

operators in Ohio.

• February 2012: PUCO adopts resolution in support of the DOE

pilot and becomes the first state to participate.

http://www.puco.ohio.gov/puco/index.cfm/industry-information/industry-topics/us-doe-pilot-program-for-combined-heat-power/




















Ohio – U.S. DOE Pilot Program

• U.S. DOE’s role: Provide site-specific technical and cost

information to facilities that are burning coal or oil in their

boilers and are affected by EPA Boiler MACT Rules.

– Target the 50+ major source facilities (~ 90 to 100 boilers) in

Ohio

– Information on financial incentives available at the local, state,

utility and federal levels as well as private financing

• PUCO’s role: Identified key areas of information needs

and held workshops (in-person and via the web)

– 3 workshops for facilities considering CHP

– 1 workshop to elicit ideas for policy change

– 1 workshop to expand outreach to facility owners via natural gas

key account reps

– Work with CEAC on training for natural gas utilities


Results: PUCO outreach

385 people attended 5 CHP workshops at PUCO

405 people joined the PUCO listserv on CHP

3,500 unique page views of our CHP web page for:

-- Archived workshop webcasts

-- Existing and potential CHP facilities in Ohio

-- CHP rulemakings and tariffs

-- Technical assistance and reports


• Over 50 companies contacted

• 16 feel they are already in compliance

• 6 no longer in business

• Analyses for 18 in various stages

• Analyses completed for 2 sites

• All companies are now aware of how CHP can assist in

a compliance strategy

• DOE will continue to track results of results of technical

assistance

Results To Date: Boiler MACT Pilot in Ohio


• Sites contacted in 10 states so far (Ohio, Massachusetts,

New York, Connecticut, Pennsylvania, North Carolina, Wisconsin,

Idaho, Iowa, and West Virginia)

• Preliminary Findings:

– Most end-users have been thinking about Boiler MACT

compliance

– Some have waited until the final passing of the EPA rule before

investigating options (thinking rule may never pass)

– Several end-users have already come under compliance (most

often with new natural gas boilers)

– Many end-users have been contacted by engineering companies

and are in the midst of making decisions on their compliance

plans

– Approx 20% of sites contacted are moving forward with CEAC

technical assistance

National Rollout of Technical Assistance


DOE Boiler MACT Resources Available

• DOE webpage on Boiler MACT Technical Assistance: http://www1.eere.energy.gov/manufacturing/distributedenergy/boilermact.html

– DOE Boiler MACT Technical Assistance Fact Sheet:

http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/boilermact_tech_asst_factsheet.pdf

• List of available state incentives for emissions controls, EE measures, boiler replacements/tune-ups, CHP, and energy assessments (DOE)

– http://www1.eere.energy.gov/industry/states/pdfs/incentives_boiler_mact.pdf

• Extensive assistance materials for Area Source rule available from EPA

– Tune-up guidance, fast facts, brochure, table of requirements, small entity compliance guide, etc.

– www.epa.gov/ttn/atw/boiler/boilerpg.html

http://www1.eere.energy.gov/manufacturing/distributedenergy/boilermact.html





http://www1.eere.energy.gov/industry/states/pdfs/incentives_boiler_mact.pdf

http://www1.eere.energy.gov/industry/states/pdfs/incentives_boiler_mact.pdf

http://www.epa.gov/ttn/atw/boiler/boilerpg.html


Upcoming HR 6582 Report


Report on the Deployment of Industrial EE (H.R. 6582)

• Background to the American Energy Manufacturing

Technical Corrections Act (H.R. 6582) passed Dec 4,

2012

• DOE report due in 2 years describing:

– Study: “The legal, regulatory, and economic barriers to

the deployment of industrial energy efficiency in all

electricity markets (including organized wholesale

electricity markets, and regulated electricity markets).”

– Recommendations & guidance: “In coordination with the

industrial sector and other stakeholders, shall develop

policy recommendations regarding the deployment of

industrial energy efficiency, including proposed regulatory

guidance to States and relevant Federal agencies to

address barriers to deployment.”


(A) The legal, regulatory, and economic barriers to the deployment of

industrial energy efficiency in all electricity markets (including organized

wholesale electricity markets, and regulated electricity markets), including,

as applicable, the following:

• (i) Transmission and distribution interconnection requirements.

• (ii) Standby, back-up, and maintenance fees (including demand

ratchets).

• (iii) Exit fees.

• (iv) Life of contract demand ratchets.

• (v) Net metering.

• (vi) Calculation of avoided cost rates.

• (vii) Power purchase agreements.

• (viii) Energy market structures.

• (ix) Capacity market structures.

• (x) Other barriers as may be identified by the Secretary, in coordination

with the industrial sector and other stakeholders.



(B) Examples of—

• (i) successful State and Federal policies that resulted in greater use of

industrial energy efficiency;

• (ii) successful private initiatives that resulted in greater use of industrial

energy efficiency; and

• (iii) cost-effective policies used by foreign countries to foster industrial

energy efficiency.

(C) Estimated economic benefits to the national economy of providing the

industrial sector with Federal EE matching grants of $5,000,000,000 for 5- and

10-year periods,

(D) The estimated energy savings available from increased use of recycled

material in energy-intensive manufacturing processes.



• Executive Order

http://www.whitehouse.gov/the-press-office/2012/08/30/executive-

order-accelerating-investment-industrial-energy-efficiency

• Better Buildings, Better Plants

http://www4.eere.energy.gov/challenge/

• SEE Action IEE and CHP Working Group

http://www1.eere.energy.gov/seeaction/

• Combined Heat & Power

http://www1.eere.energy.gov/manufacturing/distributedenergy/ceacs

.html

• DOE webpage on Boiler MACT Technical Assistance

http://www1.eere.energy.gov/manufacturing/distributedenergy/boiler

mact.html

For More Information

Katrina Pielli, [email protected],






mailto:[email protected]

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