1. Prepared For: Prepared By: 100 Montgomery Street, Suite 600 San Francisco, CA 94104 245 Market Street San Francisco, CA 94105 Boiler NOx Emissions and Energy Efficiency CPAU Facilities Managers Meeting March 10, 2011 250 Hamilton Avenue Palo Alto, CA 94301

2. © 2011 AGENDA Review of Regulations (Julian Elliot, BAAQMD) Bay Area Air Quality Management District Energy Efficiency Opportunities (Jeff Guild & Tim Huang, Enovity) Combining Energy Efficiency with NOx Reduction Example Energy Efficiency Measures Financial Incentive Eligibility Services Offered Question & Answer Discussion

3. March 2011 Bay Area AQMD Requirements for Boilers Julian Elliot Senior Air Quality Engineer www.baaqmd.gov

4. Contact Information Current rules are available at: www.baaqmd.gov/Divisions/Planning-and- Research/Rules-and-Regulations.aspx Proposed rules will be posted at: www.baaqmd.gov/Divisions/Planning-and- Research/Rule-Development/Rule- Workshops.aspx Julian Elliot: jelliot@baaqmd.gov │ 415 749 4705 Slide 2

5. BAAQMD Jurisdiction Slide 3

6. BAAQMD Boiler Regulation Slide 4 BAAQMD r egulates air emissions of NOx and CO. Permits are required for some devices (Reg 2-1-114.1): - natural gas & LPG-fired: input rating ≥10 MM BTU/hr. - all other fuels: input rating ≥1 MM BTU/hr. Online registration is required for natural gas & LPG- fired devices rated >2 to <10 MM BTU/hr. Rules apply to heater emissions and operation: - Reg 9, Rule 6: natural gas-fired up to 2 MM BTU/hr. - Reg 9, Rule 7: >2 MM BTU/hr for natural gas/LPG. ≥1 MM BTU/hr for all other fuels.

7. Recent BAAQMD Actions Reg 9, Rule 6 – Natural Gas Water Heaters & Boilers (2007) New NOx standards effective 2009 through 2013. Emissions limits apply only to new heaters (up to 2 MM BTU/hr). Reg 9, Rule 7 – Boilers, Steam Generators, Process Heaters (2008) New NOx standards go into effect 2011 and later. New efficiency requirements go into effect 2009 through 2011. Registration in 2011 for boilers that do not need permits. Standards apply to new AND existing heaters (“retrofit rule”). NOx / efficiency standard dates may be extended in Q2 2011. Slide 5

8. Regulation 9, Rule 7 Permits & Registration Operators who modify or replace a device to comply with Reg 9-7 must submit a permit application if modified or replacement device is subject to permit requirements. Registration for heaters that do not require permits: - Natural gas & LPG-fired heaters rated >2 to <10 MM BTU/hr. - One-Time Registration fees: $446 per facility with an affected heater plus $53 for each heater after the first one. - Available on BAAQMD website: www.baaqmd.gov/Divisions/Engineering/Equipment- Registration/Boiler- Steam-Generator-Process-Heater.aspx Slide 6

9. BAAQMD Regulation 9, Rule 7 Exemptions to New Requirements Device using <10% of “annual maximum heat capacity” each year are not subject to new NOx or efficiency requirements: 1 to 2 to <10 (gas-fired): - perform annual tune-up, operate fuel meter, keep fuel records. 10 MM BTU/hr and higher: - 30 ppmv NOx limit. - operate fuel meter, keep fuel records to verify exempt status. District may approve fuel-use monitoring other than a fuel meter. (Regulation 9-7-504.1) Slide 7

10. BAAQMD Regulation 9, Rule 7 Annual Maximum Heat Capacity Exemption Example: Boiler with 3 million BTU/hr input rating Less than 10% of annual maximum heat capacity = < (3,000,000 BTU/hr) (8,760 hr/yr) (therm/100,000 BTU) (0.10) < 26,280 therm/yr So if this boiler used less than 26,280 therms per year of fuel, it would qualify for an exemption. Slide 8

11. BAAQMD Regulation 9, Rule 7 Natural Gas & LPG NOx Limits Slide 9 Input (MM BTU/hr) Old NOx Limit New NOx Limit Effective Date (Single-Heater Facilities) >2 to 5None30 ppmv 1/1/2011 (possible extension to 1/1/2013*) >5 to <10None15 ppmv 1/1/2012 (possible delay to 1/1/2013*) 10 to <2030 ppmv15 ppmv 1/1/2012 20 to <7530 ppmv9 ppmv 75 & up30 ppmv5 ppmv * Proposed changes will be posted on BAAQMD website.

12. BAAQMD Regulation 9, Rule 7 De-Rating is Allowed A boiler may be physically modified to have a lower input heat rating to avoid NOx limits and other requirements applicable to a larger boiler. Multiple-Heater Facilities If there are other heaters at the facility subject to the same NOx limit as the 1 st heater, then: - at least 33% of heaters must comply on 1 st effective date - at least 66% of heaters must comply 1 year after 1 st effective date - all heaters must comply 2 years after 1 st effective date Slide 10

13. BAAQMD Regulation 9, Rule 7 Other Fuels – NOx Limits Slide 11 FuelNOx Limit Effective Date (Single-Heater Facilities) landfill or digester gas 30 ppmvalready in effect liquid fuel 40 ppmv * <10 MM BTU/hr: 1/1/2011 (possible extension to 1/1/2013*) ≥10 MM BTU/hr: already in effect * Proposed changes will be posted on BAAQMD website.

14. BAAQMD Regulation 9, Rule 7 Energy Efficiency Measures Note: Heaters using <10% of “annual max heat capacity” are exempt Insulation Requirement (1/1/2010): Exposed surfaces limited to 120°F Other exemptions in Regulation 9-7-311.1 through 311.5 Stack Gas Temperature Limits (1/1/2011 - possible extension to 1/1/2013*): Limits stack gas temperature limits to ensure reasonable heat transfer to heated material (see table in Regulation 9-7-312) Applies only to boilers and steam generators (not process heaters) May allow AHRI or other certification of combustion efficiency ≥ 80% instead of temperature limits.* * Proposed changes will be posted on BAAQMD website. Slide 12

15. BAAQMD Regulation 9, Rule 7 Energy Efficiency Measures Note: Heaters using <10% of “annual max heat capacity” are exempt Annual Tune-Up - Effective 1/1/2009 Elements of Tune-Up: - Compliance verification for insulation - Compliance verification for stack gas temperature - Minimization of Excess Air - Optimization of Liquid Blowdown - See BAAQMD Manual of Procedures, Volume 1, Chapter 5 Slide 13

16. BAAQMD Regulation 9, Rule 7 Manufacturer Certification 2008 Requirements: Pre-certification by manufacturer required for sale or installation once NOx requirements went into effect (1/1/2011 for devices rated >2 to 5 MM BTU/hr. No manufacturers have certified compliant devices by performing BAAQMD source test results. Possible 2011 Changes*: May extend certification requirement to 1/1/2013. May allow CARB, US EPA test methods to establish compliance with NOx limits. * Proposed changes will be posted on BAAQMD website Slide 14

17. Prepared For: Prepared By: 100 Montgomery Street, Suite 600 San Francisco, CA 94104 245 Market Street San Francisco, CA 94105 Combining Energy Efficiency with NOx Upgrades Facilities Managers Meeting March 10, 2011 250 Hamilton Avenue Palo Alto, CA 94301

18. © 2011 AGENDA Introduction Combining Energy Efficiency with NOx Reduction Benefits Example Energy Efficiency Upgrades Getting Financial Incentives through the Commercial Industrial Energy Efficiency Program (CIEEP) Eligible Customers Services Offered Incentives and Rebates Getting Started Questions

19. © 2011 Enovity: Is an energy engineering and sustainability consulting firm Offers an array of services: –Utility Programs –Energy Services –Building Commissioning –Building Automation –Advanced Operations and Maintenance –Sustainability Services Has a team of 90+ mechanical and controls engineers, project managers, O&M, and admin staff Operates offices in San Francisco, Sacramento, Irvine, and Phoenix ABOUT ENOVITY

20. © 2011 NEW BAAQMD NOx EMISSION REGULATION

21. © 2011 OVERVIEW OF BOILER NOx FORMATION Boilers have burners which use combustion to produce heat to make hot water or steam NOx is a by-product of combustion NOx is a pollutant contributing to: Ozone, Particulate Matter, Acid Rain 3 Types of NOx Formation: Thermal NOx Prompt NOx Fuel Bound NOx (not a concern if PUC gas)

22. © 2011 OVERVIEW OF BOILER THERMAL NOx Thermal NOx is the largest contributor to the overall total NOx Combustion: Fuel + Air(O 2 +N 2 ) + Ignition Ideal Combustion: CH 4 +O 2 +N 2 =>CO2 +H 2 O+N 2 +O 2 +Heat Under high temperatures of combustion (> 2600F), Thermal NOx is formed: N 2 + O 2 + Heat => NOx Thermal NOx is an exponential function of flame temperature

23. © 2011 OVERVIEW OF BOILER THERMAL NOx

24. © 2011 OVERVIEW OF NOx REDUCTION STRATEGIES 1)Burner Modifications or New Burner: Available down to 9 ppm NOx Less than 7 ppm NOx burners being developed Less expensive than exhaust treatment / SCR Cost effective on boilers < 20 MM Btu Can decrease efficiency depending on the NOx level & burner type, without additional upgrades 2)Exhaust Treatment (SCR): Selective catalytic reduction (SCR): equipment added to treat the NOx after combustion NOx reduction less than 5 ppm To date, installed on water-tube boilers >50 MMBtu More expensive than burner options Less impact on efficiency

25. © 2011 OVERVIEW OF NOx REDUCTION STRATEGIES

26. © 2011 WHY INCLUDE ENERGY EFFICIENCY? Reasons to include energy efficiency with NOx upgrades include: Mitigating efficiency decrease and/or operating cost increase from NOx reduction Energy and utility cost savings Some advantages of implementing as a single project: –Downtime is limited –Upgrades may be more cost-effective –Project can generate a ROI Greenhouse gas emission reductions Taking advantage of rebates available for energy efficiency upgrades Increasing boiler capacity Improving operations and maintenance Replacing aged equipment

27. © 2011 When replacing a boiler, consider: High-efficiency boilers Condensing boilers Direct-contact water heaters Steam generators Switching from steam to hot water NEW BOILERS

28. © 2011 CONDENSING BOILER INSTALLATION Annual Gas Savings (therms) Annual Utility Cost Savings ($) Incremental Installation Cost ($) Utility Incentive ($) Simple Payback w/ Incentive (years) 50,760$55,400$148,000$50,7601.8

29. © 2011 CONDENSING BOILER INSTALLATION Est. Annual Gas Savings (therms) Est. Annual Utility Cost Savings ($) Pending Installation Cost ($) Est. Utility Incentive ($) Est. Simple Payback w/ Incentive (years) 8,170$11,740$51,750$6,6873.8

30. © 2011 HOT WATER BOILER REPLACEMENT Annual Gas Savings (therms) Annual Utility Cost Savings ($) Incremental Installation Cost ($) Utility Incentive ($) Simple Payback w/ Incentive (years) 15,570$18,061$132,000$15,5706

31. © 2011 Pipe, tank, and other heated surface insulation Exhaust stack economizers (feedwater or condensing) Blowdown heat recovery Condensate recovery Mechanical vapor recompression or other custom efficiency upgrades for evaporators Flash steam recovery Thermosorber heat pump Process heat recovery HEAT RECOVERY OPPORTUNITIES

32. © 2011 REPAIRS AND SETTING CHANGES Replace old or failed steam traps Repair/replace control linkage Repair/replace failed blowdown controls or reduce excessive blowdown Reduce or eliminate boiler cycling Repair/replace dirty heat exchanger or boiler economizer Replace boiler refractory Reduce boiler steam pressure or hot water supply temperature set points Repair/replace failed VFD

33. © 2011 CIEEP OVERVIEW The Commercial & Industrial Energy Efficiency Program (CIEEP): Is a CPAU Third Party Program Offers incentives and no-cost technical services to commercial and industrial customers Investigates opportunities for energy efficiency Achieves installed and verified energy savings

34. © 2011 Consultation with customer to understand general facility characteristics and financial criteria for implementing energy projects Detailed facility assessment to identify and quantify energy reduction opportunities. Implementation coordination assistance Reporting on reductions in facility energy use, cost, and greenhouse gas emissions Cash incentives based on verified energy savings SERVICES

35. © 2011 Customers must: Purchase gas or electricity from CPAU Own or operate a facility –Larger than 30,000 sqft, OR –With a maximum demand of 50 kW or more Have funds available to implement energy efficiency projects Hospitals High-tech facilities and labs Office buildings State and local government Retail Manufacturing Colleges and schools PROGRAM ELIGIBILITY Facilities include: Other eligibility requirements may apply. Please contact Enovity to confirm eligibility.

36. © 2011 Based on the one-year energy savings for a project: $0.10 per kWh saved $1.00 per therm saved One-time payment upon project verification CASH INCENTIVES

37. JEFF GUILD CONTACT ENOVITY Senior Project Manager 415-983-3655 JGuild@enovity.com http://enovity.com/programs/cpau 100 Montgomery Street, Suite 600, San Francisco, CA 94104 Phone: 415.974.0390 Fax: 415.974.0399

38. GENERAL PHONE NUMBER FOR ACCOUNT REPRESENTATIVES CONTACT CPAU 650-329-2241 250 Hamilton Avenue, Palo Alto, CA 94301

39. © 2011 QUESTIONS