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 15 th, 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-CO 2 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 CO 2 streams  Low CO 2 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 CO 2 e 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 CO 2 /MWh, lb CO 2 /lb steam, lb CO 2 /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/palmd ale-final-permit-10-2011.pdf http://www.epa.gov/region9/air/permit/palmdale/palmd ale-final-permit-10-2011.pdf  Hybrid Power Project – CCT Component  12-month rolling average CO 2 e tpy limit sitewide  365-day rolling average source limit (lb CO 2 /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 http://www.epa.gov/earth1r6/6pd/air/pd- r/ghg/lcra_final_permit.pdf  CCT Project  TPY limits (365-day rolling average) for CO 2, CH 4, and N 2 O established for each combustion turbine  Ton CO 2 /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/PioneerVa lley/PVECFinalPermitDecisionApril2012.pdf http://www.epa.gov/region1/communities/pdf/PioneerVa lley/PVECFinalPermitDecisionApril2012.pdf  Combine Cycle Combustion Turbine Project  BACT CO 2 e Limit – 895 lbs of CO 2 e/MWh grid 365 day rolling average  Initial source test for CO 2, 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