Issue Paper for December 1999 Meeting
Output Measurement from Fossil Fuel Fired Industrial Facilities and Electric/Steam Producing Power Plants for the Purpose of Distributing NOx Emissions Allocations
by Mark Driscoll, East Coast PowerSummary/Recommendations
- States that allocate allowances on an output basis should do so to all Electric/Steam Generating Units (EGUs) regardless of their heat input based emission rate (lbs. NOx/mmbtu).
- If a source does not receive allowances based on output, then that source should not be required to measure and report output data.
- Industrial sources should be allocated allowances based on heat input. EGUs should be allocated allowances on the basis of electrical plus thermal output.
- EGUs should be given the option of measuring and reporting electrical output on either a gross or net basis. This reduces the task of the EPA to that of establishing the locations that constitute net and gross measurement and the standards and specifications for equipment and accuracy.
- Allowances for thermal output should be based on net thermal output only. (net thermal output is the thermal energy produced by a boiler or HRSG that does not produce electrical power, and does not support an operation in any way that produces electrical power and receives NOx allowances)
- In an output based allocation methodology, the heat input data required by phase II rules (part 75 standards) can be used to assign gross or net electric output and net thermal output to individual units. These heat input meters are already in place.
- Billing meters should be used whenever possible for output measurements and should be exempt from periodic QA/QC requirements stipulated by the NOx Budget rules, the same as fuel flow meters under phase II requirements.
The above recommendations accomplish the objective of providing flexibility to the sources in measuring and reporting the required information accurately, and also provide for administrative simplicity. The approach summarized above leaves the degree of electrical output measurement up to the source, similar to the way in which a market based program will leave the decision of whether to buy allowances or install pollution control equipment up to the source. The decision to install new or upgrade existing measurement equipment can be based on its respective value to the source. Use of existing measurement equipment to assign output numbers to individual units provides a no cost means to meet the requirements of an output based program. In addition this data is currently available for the 1999 Ozone season and can be used to allocate future allowances. The phase II rules required it to be in place and certified by May 1, 1999.
Since the total allowances each State has is capped, the rate at which sources receive allowances (lbs. NOx/MWHR) will vary slightly based on how many and which sources choose gross or net electrical power output measurement.
Utility and Non Utility EGUs
It is important to insure that States that choose output based allocation methods allocate to all EGUs based on output. Utility and Non Utility Generators will be competing in exactly the same market for the sale of their product due to deregulation efforts nationwide. Any difference in allocation method between low emission rate sources and higher emission rate sources or non utility vs. utility sources will substantially undermine the markets (NOx allowance trading market) efficiency in encouraging investment in efficient power generation equipment, pollution controls and the use of clean burning fuels. These are the very objectives that a market based emission allowance program is designed to promote as described by the SIP call.
Industrial sources do not compete in the same output market as EGUs. Use of heat input data for industrial sources will not substantially impact the deregulated electrical power market and will allow the use of existing equipment required by the phase II NOx rules. Keeping the measurement and reporting requirements of phase III the same as that for phase II will benefit both the industrial sources as well as the program administrators. The .17 Lbs. of NOx/mmbtu allocation rate can be applied to all industrial sources.
Relative Difficulty of Measurements
From a practical standpoint the measurement of electrical output is very accurate and reliable, with heat input a close second and thermal energy output a distant third. What seems to be compounding the difficulty of settling on the proper approach to output measurement is whether to choose gross or net with respect to electrical power and thermal energy. A solution is to allow either for electrical output and use net for thermal energy output. If all EGU sources were allowed to report gross electrical output but some chose net because the expense of reporting gross outweighs the benefit of allowances gained, this would follow the intent of establishing a market based program. Use of existing heat input monitoring equipment that meets part 75 standards can be used to apportion site electric and thermal output on a unit basis, eliminating the need for new measurement equipment in many cases.
It is highly unlikely that any electrical generator or combination of electrical generators operates without measurement of electrical output. In general, utility plants measure gross output on a unit basis and non-utility plants normally measure net electrical output on a site basis. The measurements that already exist are likely to comply with the accepted industry standard of accuracy. Calibrations at an established frequency would ensure this. Any of these gross or net measurements that are obtained from billing meters could be considered exempt from regulatory specification and calibration on the same basis that part 75 exempts fuel flow billing meters from periodic calibration.
For single unit sites the relationship between the site electrical output meter and the unit allowance allocation is straight forward. In combined cycle applications (sites that use waste heat from fossil fired turbines to power steam turbine generators) and in the case of multiple boilers providing steam to single or multiple steam turbines, the electrical output of all generators (total of steam turbine and fossil fuel fired turbine generators) could be divided among the individual fossil fuel fired units in proportion to the heat input to each unit. The heat input measurement is accurate due to the fact that any heat input methodology employed by a NOx Budget Unit is either measured by a billing meter (accepted as accurate by rule), fuel flow meter designed and calibrated according to part 75, or approved alternate heat input monitoring methodology. This is a requirement that should already have been met as of May 1, 1999. Absolute precision in the apportionment of electrical output to each individual unit at a given site is not necessary since owners can easily shift allowances between units.
Sites of various configurations could be allowed to choose the approach that provides them the most cost effective and accurate method of electrical output measurement on a net or gross basis. In most cases the difference in allocations received resulting from gross vs. net output will be minimal. However, in the event a source or site finds this difference to be significant they could choose to install the necessary equipment to measure gross output.
Since gross thermal energy output from a boiler would include all thermal energy used to produce electrical power, allocation of allowances on the basis of gross thermal energy output would result in double counting because the electrical power produced from this thermal energy will have already received allocations. Measuring gross thermal output from boilers and then subtracting away thermal energy that is used for steam turbine electrical power generation, pollution control and other purposes is impractical due to the large number measurements and adjustments required.
The difficulty begins with direct measurement of steam at each individual boiler (gross measurement). Although these meters are important to the operation of the facility their accuracy is not normally within 2% or better. When these meters are calibrated to this degree of accuracy they drift off more quickly than electrical power or fuel flow meters. This is due to the nature of the material being measured and the environment in which they operate. This issue is compounded by the fact that in order to get a total thermal output from a boiler or HRSG at least two and in many cases three separate flow streams need to be measured due to the various pressure levels of steam produced. At a site that has multiple boilers or HRSGs' with various pressure levels, the measurement of gross steam production would present a significant burden if the necessary flow measurement devices were not already in place or, did not meet the standard of accuracy that will be specified. As mentioned above, once the gross thermal output is determined, the steam used for generating electricity and other plant uses would need to be subtracted.
An alternative to the use of individual unit measurement is the use of existing steam billing meters used to measure the sale of steam to a steam customer (note that the steam billing meter could be exempted from regulatory standards since it is most likely designed, maintained and calibrated to industry standards as a requirement of a sales and purchase agreement, just like fuel and electric power billing meters). In a case like this where a net steam billing meter is already installed, the net steam production data would be readily available and accurate. As with the electrical output, the total net steam produced could be assigned to each unit based on the apportionment of heat input to each unit. Absolute precision in the apportionment of thermal output to each individual unit is not necessary since owners can easily shift allowances between these sources.
Overall, for electrical output the EPA could allow sources the choice of measuring gross or net output and would simply be charged with establishing the standard for measurement accuracy. This allows the flexibility, simplicity and the use of the already existing equipment to provide the information necessary. In the case of thermal output, matters would be simplified greatly in establishing that allowances will be based on net thermal energy.