1. Michael Hopkins Assistant Chief, Permitting Ohio EPA 614-644-3611 Update on GHG Permitting in Region V

2. Discussion Topics Pollutants Covered Applicability GHG BACT Example GHG BACT Analysis GHG Permits Issued in Region 5 GHG BACT Permits for Wolverine Power and WE Energies-Rothschild Useful Links U.S. EPA Slides… 2

3. What are Green House Gasses? Regulated pollutant is GHG Combination of 6 individual greenhouse gases – Carbon dioxide (CO2) – Methane (CH4) – Nitrous oxide (N2O) – Hydrofluorocarbons (HFCs) – Perfluorocarbons (PCFs) – Sulfur hexafluoride (SF6) 3

4. Applicability GHGs now regulated air pollutant GHGs permitting since January 1, 2011 Applicability thresholds based on CO2 equivalent (CO2e) CO2e = sum of the mass emissions of each individual GHG adjusted for its global warming potential (GWP) GWPs can be found in table A-1 of the GHG Mandatory Reporting Rule. 4

5. Applicability GHG applicability based on mass emissions and CO2e emissions. Current GHG permitting thresholds: – New facility: PTE of 100,000 tpy – Modifications at existing facilities: 75,000 tpy 5

6. GHG BACT Normal 5-step “top down” BACT process No less stringent than NSPS Currently focus on BACT options - improving energy efficiency 6

7. GHG BACT General Requirements Need to go thru a GHG BACT analysis to consider: – Lower-emitting processes/designs – Add-on controls, – Carbon capture and sequestration (CCS) – Energy efficiency measures New facility: look at entire facility Modification: look at the modified emissions unit 7

8. BACT Modeling and Monitoring No ambient modeling (no NAAQS or increments) Applicants do not need to gather monitoring data to assess ambient air quality for GHGs. 8

9. GHG BACT Issues Carbon capture and sequestration (CCS) – Evaluate large GHG emitting sources – Costs will likely rule out CCS for now (Step 4 of BACT process) IGCC should be considered for coal-fired power plants. 9

10. GHG BACT Issues Consider clean fuels, but not if fundamentally redefines source. Can get a GHG PAL using actual emissions under 40 CFR 52.21(aa) but only a mass basis not a CO2e basis. The significance level of zero on a mass basis, not 75,000 tpy. 10

11. GHG BACT Fuels & Limits Cleaner version of the primary fuel not redefining the source (e.g. cleaner coal types) Can evaluate the trade-offs associated with decreasing one pollutant versus increasing another Need numerical emissions limit such as: – pounds of CO2e per megawatt hour – pounds of CO2e per pound of steam produced – tons per 12-month rolling limit of CO2e 11

12. GHG BACT Enforceability Ensure practical enforceability, adequate compliance monitoring to measure emissions or efficiency over time – (e.g., CO 2 CEMS or use of fuel factors to calculate GHG emissions). Consideration of non-CO 2 constituents – methane and N 2 O for combustion sources: – Assure compliance with total CO2e GHG BACT emission limit for all greenhouse gases emitted 12

13. GHG BACT Support Must justify BACT decision in the permit record. Provide adequate explanation for rejecting control options The permit record should explain – why a chosen approach is more energy efficient than other options – explain what good combustion practices are being used for the emission unit 13

14. GHG BACT Biomass 3-year biomass Deferral Rule – Feds say must get it SIP approved Ohio EPA not so sure Prior to SIP approval can use the Interim Biomass CO 2 Guidance document for biomass burning only – Helps decide if burning biofuels for energy is GHG BACT – Provides a framework for analyzing the environmental, energy and economic benefits of biomass in BACT Step 4. – Source would still be major for GHGs and go through BACT – See: http://www.epa.gov/nsr/ghgdocs/bioenergyguidance.pdf 14

15. Example GHG BACT Analysis Pulverized-coal-fired power plant: – Consider lower-emitting processes: Integrated Gasification Combined Cycle Natural gas fired combustion turbine – Combined cycle (more energy efficient – recaptures waste heat) – Simple cycle Circulating fluidized bed (CFB) Pulverized coal – Ultra-supercritical – Supercritical – Critical 15

16. Example GHG BACT Analysis Look at ways to maximize efficiency of the boiler and other equipment – Ensure good combustion practices for the boiler – Develop an Energy Efficiency Management Plan – Develop an output-based CO2e emissions limit, i.e. in lb/Mw-hr 16

17. GHG Permits Issued in Region 5 WE Energies-Rothschild, Wisconsin (biomass combined heat & power boiler at an existing paper mill) US Steel-Keetac, Minnesota (re-activation of a taconite facility) Hoosier Energy, Indiana (installing 8 coal bed methane-fired RICE engines) Wolverine Power, Michigan (600 MW power plant firing coal and biomass – two CFB boilers) 17

18. GHG Permits Issued in Region 5 Wolverine-Sumpter, Michigan (modifying a simple-cycle turbine into a combined-cycle) University of Wisconsin-Charter Street Heating Plant (installing four gas-fired boilers) – permit not final yet Taylorville IGCC in Illinois (IGCC power plant) – out for public comment Indiana Gasification (coal-to-liquid facility) - not yet out for public comment 18

19. Examples of GHG BACT permits issued in Region 5 WE Energies-Rothschild: biomass-fired CFB boiler with a 1,830 lb/mW-hr GHG emission limit Wolverine Power: coal/biomass-fired CFB boiler with a 2.1 lb/kW-hr GHG emission limit Approximately 15 other permits issued nationally. 19

20. Wolverine Power Issued final on June 29, 2011 New 600 MW power plant (two CFB boilers to burn coal, pet coke, and biomass) Permitted to emit up to 2.1 lb/kW-hr GHGs, and 6,024,107 tpy of GHGs – The 2.1 lb/kW-hr limit is an output-based emission limit based on energy efficiency 20

21. Wolverine Power Considerations Burning natural gas in a gas turbine – gas supply not available, – flexibility to burn various fuels is vital. IGCC (cost prohibitive) 100% biomass combustion and biomass gasification – Fuel source not an available Pulverized coal – Limited flexibility to burn various fuels including biomass 21

22. Wolverine Power Considerations Carbon capture and sequestration: cost prohibitive Energy efficiency measures considered/chosen: – Variable speed motors over 100 hp – Good combustion/efficient practices for the boilers and other fuel burning equipment – Development of an Energy Efficiency Management Plan (for the entire facility) Decided on energy efficiency measures and burning 5% biomass - due to utility’s energy portfolio standard 22

23. WE Energies-Rothschild Permit was issued final on March 28, 2011 New 50 MW biomass-fueled CFB combined heat and power boiler at an existing paper mill. Will provide steam to the paper mill as well as generate electricity. Permitted to emit up to a 1,830 lb/mW-hr GHGs – The 1,830 lb/mW-hr limit is an output-based emission limit based on energy efficiency 23

24. WE Energies-Rothschild Considerations Natural gas in a combustion turbine – Needed to burn biomass because the Renewable Portfolio Standard Carbon capture and sequestration – not technically available for similar CFB boilers – no nearby sites to sequester CO2 24

25. WE Energies-Rothschild Considerations Energy efficiency measures considered/chosen: – Use of combined heat and power to maximize efficiency – Good combustion/efficient practices for the boilers and other fuel burning equipment Decided on an energy efficient combined heat and power boiler, good combustion practices, and burning biomass - due to utility’s energy portfolio standard 25

26. What do the Feds look for? Numerical emission limit for GHG BACT that accounts for all GHGs emitted from the facility (e.g., usually CO2, methane and nitrous oxide). Output-based GHG BACT limit, if applicable – pounds of total CO2e per megawatt hour – pounds of total CO2e per pound of steam produced – and a tons of total CO2e per year on a 12-month or 365- day rolling average. Adequate monitoring, recordkeeping and reporting Monitoring has been either CO2 CEMS or the use of fuel factors to calculate emissions of all GHGs emitted at the facility. 26

27. Wrap up EPA GHG Permitting Web Site: http://www.epa.gov/nsr/ghgpermitting.html EPA’s GHG Tailoring Rule: http://www.epa.gov/nsr/actions.html#may10 EPA’s Biomass CO2 Guidance document: http://www.epa.gov/nsr/ghgdocs/bioenergyg uidance.pdf Biogenic CO2 Deferral Rule: http://www.epa.gov/nsr/actions.html#jul11 http://www.epa.gov/nsr/actions.html#jul11 Questions? 27