Energy Probe

Here is a copy of the legally binding federal permit conditions that apply to a new 615 MW gas-fired power plant (with combined heat and power technology) to be developed by Calpine in California. The federal permit includes legally binding GHG limits. The actual emission limits embedded in the permit are summarized at the end of this message. Calpine asked the EPA to incorporate the GHG limits in the new facility’s operating permit to remove operating cost uncertainty from the development plan.

As I have noted in many messages over the years, all US emission permits include both intensity and absolute limits.  As I previously forecast, the GHG limits prescribed by the EPA in this case are consistent with this US permit history.

The plant has received development approvals from the state of California.  Under a pre-existing US EPA-state agreement, the state is obliged to build these federal permit conditions into the facility’s state-issued and administered operating permit.

Please note that, consistent with the way operating permits work under the US Acid Rain Program, the plant operator may not exceed any of the emission limits outlined in the permit even if/after Congress or the state introduce a "cap and trade regime."

Under "cap and trade" either the Calpine facility operator or distributors of the electricity, heat and steam output from this power facility will be obliged to surrender US GHG quota ("allowances") covering the facility’s total GHG emissions. The EPA will establish a GHG allowance budget for the state of California (consistent with the federal NOx cap and trade allowance allocation method), and will delegate the authority to determine how GHG allowances will be allocated/auctioned to facilities/distributors and terms and conditions of GHG allowance trading to the state regulatory authorities, subject to some federal trading guidelines. 

Federal regulations will likely dictate that only operators of facilities that have operating permits that include GHG limits–or the US distributors of the outputs from these facilities–shall be permitted to receive free GHG allowance allocations from the state or participate in state GHG allowance auctions.

No matter how many surplus GHG allowances the operator might have on hand, the facility operator may not exceed any of the emission limits incorporated in the facility permit.  Under traditional California state cap and trade rules, after the facility operator files a compliance report demonstrating that they beat the intensity limits in the permit by the equivalent of 1 TCO2e/year, the state will issue one bankable tradable GHG credit to the facility operator’s allowance account.

Note that under existing California state law, the provisional WCI market rules and both of the climate change bills under review in the US House and Senate, GHGs and green attributes from power generation are, by default, assigned to the inventory of the state/province in which the electricity is finally consumed, not necessarily the state/province in which the electricity is produced. Under this GHG accounting method, if construction of this new fossil-fuelled facility in California displaces coal-fired power imports from other states, then it contributes to compliance with California’s 2020 GHG target even though the new plant will result in a net physical increase in GHGs originating in the state.

I also attach two versions of the state of California’s official GHG inventory so that you can see how GHGs associated with electricity imports are included.  The "scoping plan" version shows you summary accounts.  Download the CA inventory, including electricity import emissions by source plant for "specified imports", here. Canadian jurisdictions will not be able to  form common, barrier-free electricity and carbon markets with the US unless/until we develop verifiable provincial GHG inventories more consistent with the CA state GHG inventory model (including land use, land use change and forestry breakdowns by province).

All British Columbia power exports are included in the category of "unspecified" electricity imports. Because it is currently impossible to differentiate the power that originates in BC and the power that originates in Washington state when both streams flow through the Bonnieville Power Authority transmission system, the California regulators assign a single default GHG factor to all kWhs that flow through the BPA system into California. In other words, a GHG factor is assigned to BC power exports that reflects both: (1) GHGs arising from BC’s imports of coal-fired power from Alberta and US states and (2) the higher GHG rate for Washington state power production. In 2007, for example, the GHG factor that is assigned to all BC power exports is in the order of .450 TCO2e/MWh (much higher than the 0.020 TCO2e/MWh GHG rate that BC claims in the province’s official GHG inventory).

CA regulators will only assign a lower GHG factor to BC power exports if/when BC implements a "generation attributes tracking system" ("GATS") that attaches emission attributes and green certificates to all traded kilowatt-hours. This discipline eliminates the possibility that BC power producers and Powerex can double count green power attributes, both as compliance with their voluntary commitments to cut GHGs in BC and as attributes marketable into US voluntary and/or compliance regimes.

More than 30 US states have already adopted a common GATS tracking system, which was originally developed by the PJM Interconnection ISO.  PJMs GATS currently tracks NOx, SO2, CO2 emission rates, green certificates and RECs for over 7,100 US electricity generation units.  To see how this proved power generation emission and green attribute tracking system works, go here.

In respect of the Calpine gas plant EPA permit conditions, in particular, that:

• As is standard practice in all existing US facility permits (including Acid Rain permits), the operating permit dictates fuel efficiency standards:

• 13. The owner/operator shall not operate the units such that the combined heat input rate to each power train consisting of a Gas Turbine and its associated HRSG (S-1 & S-2 and S-3 & S-4) exceeds 2,238.6 MM BTU (HHV) per hour.

• 14. The owner/operator shall not operate the units such that the combined heat input rate to each power train consisting of a Gas Turbine and its associated HRSG (S-1 & S-2 and S-3 & S-4) exceeds 53,726 MM BTU (HHV) per day.

• 15. The owner/operator shall not operate the units such that the combined cumulative heat input rate for the Gas Turbines (S-1 & S-3) and the HRSGs (S-2 & S-4) exceeds 35,708,858 MM BTU (HHV) per year.

• As is standard practice in all existng US facility permits, including Acid Rain Program permits, most emission limits are defined in all of: (1) intensity terms, (2) emission concentrations and (3) absolute daily limits and (4) absolute annual limits:

• Plant-wide Intensity (Heat Rate), GHGs: "The owner/operator shall maintain the S-1 & S-3 Gas Turbines such that the heat rate of each turbine does not exceed 7,730 Btu/kWhr."

• Plant-wide Intensity (Hourly Limit), GHGs: "The owner/operator shall not emit more than 242 metric tons of CO2E from the S-1 & S-3 Gas Turbines and S-2 & S-4 Heat Recovery Steam Generators (HRSGs) per hour."

• Plant-wide Absolute Daily Limit, GHGs: :"The owner/operator shall not emit more than 5,802 metric tons of CO2E from the S-1 & S-3 Gas Turbines and S-2 & S-4 Heat Recovery Steam Generators (HRSGs) per day.

• Plant-wide Absolute Annual Limit, GHGs: :"The owner/operator shall not emit more than 1,928,182 metric tons of CO2E from the S-1 & S-3 Gas Turbines and S-2 & S-4 Heat Recovery Steam Generators (HRSGs) per year."

• Plant-wide GHG Estimation Method: "Hourly, daily, and annual greenhouse gas emissions, expressed in metric tons of CO2E and calculated by multiplying the hourly, daily, and annual heat input by an emissions factor of 119.0 pounds of CO2E per MMBtu of heat input."

• Rolling 12-month Limit for S-6 Fire Pump Diesel Engine, GHGs: "The owner/operator shall not emit more than 7.6 metric tons CO2E from the S-6 Fire Pump Diesel Engine per rolling 12-month period during operation."

• Fire Pump Diesel Engine GHG Estimation Method: "The owner/operator shall maintain the following monthly records in a District approved log for at least 60 months from the date of entry. Log entries shall be retained on-site, either at a central location or at each circuit breaker’s location, and made immediately available to the District staff upon request.

a. Monthly fuel usage.

b. Monthly greenhouse gas emissions, expressed in metric tons of CO2E and calculated by multiplying the amount of fuel used per month by an emissions factor of 21.7 pounds of CO2E per gallon of fuel used."

• Rolling 12-month Limit for S-7 through S-11 Circuit Breakers, GHGs :"The owner/operator shall not emit more than 39.3 metric tons of CO2E from the SS-7 through S-11 circuit breakers per rolling 12-month period.

• Circuit Breakers GHG Estimation Method:The owner/operator shall maintain the following monthly records in a District approved log for at least 60 months from the date of entry. Log entries shall be retained on-site, either at a central location or at each circuit breaker’s location, and made immediately available to the District staff upon request.

a. Amount of dielectric fluid added to the circuit breakers for each month of facility operation.

b. Greenhouse gas emissions from the circuit breakers for each month of facility operation, expressed in metric tons of CO2E and calculated by multiplying the amount of dielectric fluid added by an emissions factor of 10.84 metric tons of CO2E per pound of dielectric fluid added during the month.

• Intensity, NO2: "(a) Nitrogen oxide mass emissions (calculated as NO2) at P-1 (the combined exhaust point for S-1 Gas Turbine and S-2 HRSG after abatement by A-1 SCR System) shall not exceed 16.5 pounds per hour or 0.00735 lb/MM BTU (HHV) of natural gas fired.

• Concentration, NO2: (b) The nitrogen oxide emission concentration at emission points P-1 and P-2 each shall not exceed 2.0 ppmv, on a dry basis, corrected to 15% O2, averaged over any 1-hour period.

• Absolute Daily Limit, NO2: :"The owner/operator shall not allow total combined emissions from the Gas Turbines and HRSGs (S-1, S-2, S-3 & S-4), S-5 Cooling Tower, and S-6 Fire Pump Diesel Engine, including emissions generated during gas turbine start-ups, combustor tuning, and shutdowns to exceed the following limits during any calendar day:a) 1,453 pounds of NOx (as NO2 ) per day (Cumulative Emissions) (b) 1,225 pounds of NOx per day during ozone season from June 1 to September 30.

• Absolute Annual Limit, NO2: :"The owner/operator shall not allow total combined emissions from the Gas Turbines and HRSGs (S-1, S-2, S-3 & S-4), S-5 Cooling Tower, and S-6 Fire Pump Diesel Engine, including emissions generated during gas turbine start-ups, combustor tuning, and shutdowns to exceed the following limits during any calendar year:(a) 127 tons of NOx (as NO2 ) per year.

• Intensity, CO: (c) Carbon monoxide mass emissions at P-1 and P-2 each shall not exceed 10 pounds per hour or 0.0045 lb/MM BTU of natural gas fired, averaged over any 1-hour period.

• Concentration, CO: (d) The carbon monoxide emission concentration at P-1 and P-2 each shall not exceed 2.0 ppmv, on a dry basis, corrected to 15% O2 averaged over any 1-hour period.

• Absolute Daily Limit, CO and CH4: :"The owner/operator shall not allow total combined emissions from the Gas Turbines and HRSGs (S-1, S-2, S-3 & S-4), S-5 Cooling Tower, and S-6 Fire Pump Diesel Engine, including emissions generated during gas turbine start-ups, combustor tuning, and shutdowns to exceed the following limits during any calendar day:(c) 7,360 pounds of CO per day (d) 295 pounds of as CH4 .

• Absolute Annual Limit, CO: :"The owner/operator shall not allow total combined emissions from the Gas Turbines and HRSGs (S-1, S-2, S-3 & S-4), S-5 Cooling Tower, and S-6 Fire Pump Diesel Engine, including emissions generated during gas turbine start-ups, combustor tuning, and shutdowns to exceed the following limits during any calendar year:(b) 330 tons of CO per year. "

• Absolute Daily Limit, PM10 & PM 2.5: :"The owner/operator shall not allow total combined emissions from the Gas Turbines and HRSGs (S-1, S-2, S-3 & S-4), S-5 Cooling Tower, and S-6 Fire Pump Diesel Engine, including emissions generated during gas turbine start-ups, combustor tuning, and shutdowns to exceed the following limits during any calendar day:413 pounds of PM10 and PM2.5 per day.

• Absolute Annual Limit, PM10 & PM 2.5: :"The owner/operator shall not allow total combined emissions from the Gas Turbines and HRSGs (S-1, S-2, S-3 & S-4), S-5 Cooling Tower, and S-6 Fire Pump Diesel Engine, including emissions generated during gas turbine start-ups, combustor tuning, and shutdowns to exceed the following limits during any calendar year:(d) 71.8 tons of PM10 and PM2.5 per year."

• Intensity, Total Dissolved Solids (TDS) in the cooling tower: :"The maximum total dissolved solids (TDS) measured at the base of the cooling towers or at the point of return to the wastewater facility shall not be higher than 6,200 ppmw (mg/l).."

One of the big NDP and Liberal story lines is that the US is spending US $118-billion in stimulus funds on environmental initiatives, while Canada’s stimulus package has only Cdn $3-billion for green initiatives.
 
These numbers come from a table lifted from the World Resources Institute (WRI) website, and could not be less accurate. The website suggests that the data was provided by HSBC, but in a phone call with a WRI representative, who wishes to remain anonymous, I was told that while HSBC provided the estimates for some countries included in the table—including the US—the data for Canada was provided by International Institute for Sustainable Development (IISD).

Official US and Canadian budget documents clearly show that:

• the value of green initiatives in the US stimulus package totals just under US $93-billion, to be spent over the next 4 years, while

• the value of green initiatives in the Canadian stimulus package totals just over Cdn $11-billion, most of which is to be spent over two years.

Given that the population and economy of Canada is about 10% the size of those of the US, the Canadian stimulus package is slightly more green than the US stimulus package and being spent about twice as fast.

US stimulus and other green spending details

From the WRI website: "In October 2008, Congress passed the Emergency Economic Stabilization Act, which extended existing incentives for wind, solar, and other renewable energy technologies. The bill also offered significant financial incentives for carbon capture and storage projects.”

The value of these incentives is deemed to be in the order of $13 billion over 4 years—2009 – 2013. This was deemed an "emergency" action because it brought forward to October, 2008 a decision to extend existing incentives—a decision that would not normally be made in the absence of the financial crisis—until March 2009 at budget time. These incentives come up for renewal/extension every five years.  

Note that Bush was still President and Congress was dominated by Republicans when this decision was made, but presidential candidate Obama ran on a platform committing a Democratic Congress to extend/renew these incentives if/when they won the Nov 2008 election.

"In February 2009, Congress, with the encouragement of President Obama, passed the American Recovery and Reinvestment Act (commonly known as the stimulus package), which provides at least $112 billion for investments in renewable energy, efficiency, smart grid, “green-collar” job training, and other emissions-reducing clean energy projects. Worldwide, this green investment by the U.S. is second only to China’s stimulus package in amount dedicated to green funding. An evaluation of stimulus packages by HSBC also found that only the U.S. plan provided a “real boost to renewables.” [WRI cites HSBC as the source of this information and dates it February 2009]

But the official US government estimate of the green spending component of the US stimulus bill (source: final US budget, as summarized by the US Budget Office) is US$93 billion, much of which is really putting the cost of continuing operations into the stimulus bill. Even when I combine the renewal/extension of existing programs with the stimulus bill, I get just under US$110 billion for the US green initiatives over the next 4 years.  

I can only get up to US $112 billion if I reclassify normal ongoing annual federal spending on rail (Amtrack) and transit (which are at historical lows) as "green stimulus" spending.

Total US Stimulus Green Spending, as itemized by the US Budget Office: $93 billion:

• $11 billion funding for an electric smart grid

• $6.3 billion for state and local governments to make investments in energy efficiency

• $6 billion for renewable energy and electric transmission technologies loan guarantees

• $6 billion for the cleanup of radioactive waste (mostly nuclear power plant sites) [Note: This spending was required, by law, prior to the passage of this bill.]

• $5 billion for weatherizing modest-income homes

• $4.5 billion for the Office of Electricity and Energy Reliability to modernize the nation’s electrical grid and smart grid.

• $4.5 billion for state and local governments to increase energy efficiency in federal buildings

• $3.4 billion for carbon capture experiments

• $3.25 billion for the Western Area Power Administration for power transmission system upgrades. [Note: This spending was required/committed prior to the passage of this bill.]

• $2.5 billion for energy efficiency research  [Note: This maintains pre-stimulus bill budgets.]

• $2 billion for manufacturing of advanced car battery (traction) systems and components.

• $3.2 billion toward Energy Efficiency and Conservation Block Grants.

• $500 million for training of green-collar workers (by the Department of Labor)

• $400 million for electric vehicle technologies

• $300 million for federal vehicle fleets, to cover the cost of acquiring electric vehicles, including plug-in hybrid vehicles.

• $300 million to buy energy efficient appliances

• $300 million for reducing diesel fuel emissions

• $300 million for state and local governments to purchase energy efficient vehicles

• $250 million to increase energy efficiency in low-income housing

• $600 million to cleanup hazardous waste that threaten health and the environment [Note: This spending was required, by law, prior to the passage of this bill.]

• $200 million to cleanup petroleum leaks from underground storage tanks [Note: This spending was required, by law, prior to the passage of this bill.]

• $100 million to evaluate and cleanup brownfield land [Note: This spending was required, by law, prior to the passage of this bill.]

• $400 million for the Geothermal Technologies Program

• $4 billion to the Department of Housing and Urban Development (HUD) for repairing and modernizing public housing, including increasing the energy efficiency of units.

• $100 million to help remove lead paint from public housing [Note: This spending was required, by law, prior to the passage of this bill.]

• $1.38 billion for rural drinking water and waste disposal projects

• $4.6 billion for the Army Corps of Engineers for environmental restoration, flood protection, hydropower, and navigation infrastructure projects

• $4.5 billion to the U.S. General Services Administration (GSA) for energy efficiency and renewable energy.

• $4.2 billion to repair and modernize Defence Department facilities.

• $4 billion toward the establishment of an Office of Federal High-Performance Green Buildings within the GSA.

• $4 billion for the Clean Water State Revolving Fund (wastewater treatment infrastructure improvements)

• $4 billion for public housing improvements and energy efficiency ( Department of Housing and Urban Development (HUD)).

• $2 billion for the Drinking Water State Revolving Fund (drinking water infrastructure improvements)

And for Canada: