1 | Energy Efficiency and Renewable Energy eere.energy.gov
Katrina Pielli
U.S. Department of Energy
Environmental Regulations and Combined Heat and Power
ACEEE / CEE National Symposium on
Market Transformation
March 26, 2013
Washington, DC
2 | Energy Efficiency and Renewable Energy eere.energy.gov
DOE Activities in Support of August 30, 2012 Executive Order
– “Accelerating Investments in Industrial Energy Efficiency”
• Better Plants Challenge & Program
• State & Local Energy Efficiency Action Network
– IEE and CHP Working Group
• Regional Industrial EE / CHP Dialogue Meetings
• Boiler MACT Technical Assistance Effort
– Background on Boiler MACT Rule
– Compliance Options
– DOE Technical Assistance Program
– Ohio Pilot Program
– National Role Out of Technical Assistance
• Upcoming HR 6582 Report
Today
3 | Energy Efficiency and Renewable Energy eere.energy.gov
Better Plants Challenge & Program
4 | Energy Efficiency and Renewable Energy eere.energy.gov
Better Plants Overview
• Industrial component of the Better Buildings Challenge,
– National leadership initiative that calls on CEOs, university presidents, and
state and local leaders to create American jobs through energy efficiency
– Supports President’s goals to improve energy efficiency in commercial and
industrial buildings by 20% or more by 2020 and help manufacturers save
$100 billion on their energy bills over the next decade
– Launched December 2011
• Manufacturers can engage in:
– Better Plants Challenge
• Small group of market leaders that pursue leading-edge energy efficiency
strategies and agree to share their approaches and results with the public
– Better Plants Program
• Broader-based initiative composed of over 100 manufacturers that make
energy efficiency commitments and report progress once a year to DOE
– DOE provides recognition for efforts and targeted TA to speed adoption
of sound energy management practices
5 | Energy Efficiency and Renewable Energy eere.energy.gov
Better Plants Snapshot
• 118 companies, representing over 1,400 plants and
more than 6% of the total U.S. manufacturing energy
footprint
• Reported cumulative savings
– About 45 trillion BTUs
– Over $240 million
• In the pipeline – through FY12 training events
– Reached over 250 participants
– Helped identify over 750 billion BTUs of energy savings and
more than $4.5 million in cost savings
6 | Energy Efficiency and Renewable Energy eere.energy.gov
Better Plants Challenge Partners
7 | Energy Efficiency and Renewable Energy eere.energy.gov
Challenge Partner Highlights
• Partners commit to:
– Set a goal to improve their energy
intensity by 25% over 10 years
across their corporation
– Conduct at least one “showcase
project,” which is a near-term
demonstration of exceptional
energy savings within a single
facility
– Pursue at least one
“implementation model,” which is a
corporate wide initiative launched
to overcome one or more persistent
barriers to energy efficiency
– Agree to share energy performance
data, showcase project results, and
implementation models with the
public
• Showcase Projects
– Nissan is building a $200 million paint plant in Smyrna, TN, which it estimates will be 30% more energy efficient than the plant it is replacing.
– Alcoa is constructing a $21 million recycling facility in Barberton, OH, which is projected to be 25% more efficient than comparable plants
– Saint-Gobain implemented a $4 million compressed air system upgrade in Milford, MA, which will result in 15% energy savings relative to the previous compressed air system
• Implementation Models
– 3M administers a capital set aside program that reserves $1 million per year to be invested exclusively in energy efficiency projects
– Legrand is installing submeters at all U.S. commercial and industrial facilities and will use the resulting data to drive a corporate-wide employee engagement initiative
– Alcoa is requiring all capital investments above a certain threshold to undergo a full energy efficiency review
8 | Energy Efficiency and Renewable Energy eere.energy.gov
State & Local Energy Efficiency Action Network
9 | Energy Efficiency and Renewable Energy eere.energy.gov
State & Local Energy Efficiency Action Network: Industrial Energy Efficiency and CHP Working Group
• Chaired by: Todd Currier, Washington State University Extension
Energy Office, Joshua Epel, Colorado Public Utilities Commission
• “Guide to the Successful Implementation of State CHP Policies”
(March 2013)
• Informs state utility regulators and other state policymakers with
actionable information to assist them in implementing key state
policies that impact CHP.
• Discusses five policy categories and highlights successful state
CHP implementation approaches within each category:
– Design of standby rates
– Interconnection standards for CHP with no electricity export
– Excess power sales
– Clean energy portfolio standards (CEPS)
– Emerging market opportunities—CHP in critical infrastructure
and utility participation in CHP markets.
10 | Energy Efficiency and Renewable Energy eere.energy.gov
State & Local Energy Efficiency Action Network: Industrial Energy Efficiency and CHP Working Group
• In development: Roadmap for Successful
Implementation of Industrial Energy Efficiency Programs
• Additional projects in support of new resources, including
webinars and state-specific engagement
To stay updated on SEE
Action activities and
resources, sign-up for email
alerts:
http://www1.eere.energy.gov/seeaction
/index.html
11 | Energy Efficiency and Renewable Energy eere.energy.gov
Regional Industrial EE / CHP Dialogue Meetings
12 | Energy Efficiency and Renewable Energy eere.energy.gov
DOE Regional Dialogue Meetings
• DOE Regional Industrial Energy Efficiency & Combined Heat and
Power Regional Dialogue Meetings – In-person, one day dialogue meetings that focus on developing and
implementing state best practice policies and investment models that
address the multiple barriers to greater investment in industrial energy
efficiency and CHP.
• Partner with regional EE organizations (MEEA, SEEA / IEEN,
NEEP) and DOE regional Clean Energy Application Centers to
ensure local follow-up
Western Industrial Energy
Efficiency & Combined Heat and
Power Regional Dialogue Meeting Late Spring / Early Summer. TBD
13 | Energy Efficiency and Renewable Energy eere.energy.gov
DOE State Technical Assistance
• Significant opportunity for DOE to support states efforts
to address state and local barriers to accelerate
investment in Industrial EE and CHP.
• DOE is working closely with Ohio, Oregon and New
York.
• Opportunities for states that want to partner with DOE,
identify opportunities at the state level, and develop best
practices that can be implemented around the country.
14 | Energy Efficiency and Renewable Energy eere.energy.gov
Boiler MACT Technical Assistance Effort
15 | Energy Efficiency and Renewable Energy eere.energy.gov
Clean Air Acts Standards for Boilers and
Incinerators
• On December 20, 2012, EPA finalized a specific set of
adjustments to March 2011 Clean Air Act standards for
boilers and certain solid waste incinerators
– Area Source Boiler Rule
– Major Source Boiler Rule (ICI Boiler MACT)
– Commercial and Industrial Solid Waste Incinerators MACT
• Adjustments based on new data and additional
information on real-world performance
– Maintain public health benefits by reducing toxic air pollution,
including mercury and particulates
– Increase flexibility of compliance
– Maintain cuts in the cost of implementation represented by
March 2011 rule
16 | Energy Efficiency and Renewable Energy eere.energy.gov
ICI Boiler MACT
• Major source is a facility that emits:
– 10 tpy or more of any single Hazardous Air Pollutant, or 25
tpy or more of total Hazardous Air Pollutants (HAPs)
• Rule significantly impacts oil, coal, biomass, and process gas boilers
– Emission limits must be met at all times except for start-up and shutdown periods
– Controls are potentially required for Hg, PM, HCI, and CO
– Also includes monitoring and reporting requirements
– Limits are difficult (technically and economically) for oil and coal boilers (especially older units)
17 | Energy Efficiency and Renewable Energy eere.energy.gov
CHP as a Compliance Strategy
• Compliance limits may be expensive for many coal and oil users
• May consider converting to natural gas
₋ Conversion for most oil units?
₋ Boiler replacements for coal units?
• May consider moving to natural gas CHP
₋ Represents a productive investment
₋ Potential for lower steam costs due to generating own power
₋ Higher overall efficiency and reduced emissions
₋ Higher capital costs, but partially offset by required compliance costs or new gas boiler costs
₋ State / local / utility incentives can help
18 | Energy Efficiency and Renewable Energy eere.energy.gov
Affected Coal/Oil Boilers by Region
CEAC
Region # Coal
Boilers
Coal
Capacity
(MMBtu/hr) # Oil Boilers Oil Capacity
(MMBtu/hr)
Total
Affected
Boilers
Total
Capacity
(MMBtu/hr)
Gulf Coast 16 4,772.0 11 2,694.4 27 7,466.4
Intermountain 29 12,596.0 6 898.5 35 13,494.5
Mid-Atlantic 153 30,747.5 88 9,875.5 241 40,623.0
Midwest 360 84,197.1 122 15,311.3 482 99,508.4
Northeast 19 4,612.0 107 10,391.5 126 15,003.5
Northwest 23 3,238.0 23 5,066.7 46 8,304.7
Pacific 5 746.0 13 1,393.2 18 2,139.2
Southeast 186 39,710.1 164 16,981.4 350 56,691.5
Total 791 180,618.7 534 62,612.5 1,325 243,231.1
19 | Energy Efficiency and Renewable Energy eere.energy.gov
ICI Boiler MACT - Potential CHP Capacity
Fuel Type Number
of Facilities
Number of Affected
Units
Boiler Capacity
(MMBtu/hr)
CHP Potential
(MW)
CO2 Emissions
Savings (MMT)
Coal 351 791 180,619 18,064 114.3
Heavy Liquid 151 319 41,821 4,182 19.8
Light Liquid 215 215 20,791 2,080 9.9
Total 717* 1,325 243,231 24,326 144.0
*Some facilities are listed in multiple categories due to multiple fuel types; there are 556 ICI affected facilities
•CHP potential based on average efficiency of affected boilers of 75%; Average annual load factor of 65%, and simple cycle gas turbine CHP performance (power to heat ratio = 0.7) • GHG emissions savings based on 8000 operating hours for coal and 6000 hours for oil, with a CHP electric efficiency of 32%, and displacing average fossil fuel central station generation
20 | Energy Efficiency and Renewable Energy eere.energy.gov
DOE CHP Assistance: Regional Clean Energy Application Centers (CEACs)
Eight Regional CEACs & International District Energy Association
• Market Assessments: Analyses of CHP
market potential in diverse sectors, such as
health care, industrial sites, hotels, & new
commercial and institutional buildings.
• Education and Outreach: Providing
information on the benefits and applications
of CHP to state and local policy makers,
regulators, energy end-users, trade
associations and others.
• Technical Assistance: Providing technical
information to energy end-users and others
to help them consider if CHP makes sense
for them. Includes performing site
assessments, producing project feasibility
studies, and providing technical and
financial analyses.
http://www1.eere.energy.gov/manufacturing/distributedenergy/ceacs.html
21 | Energy Efficiency and Renewable Energy eere.energy.gov
• DOE is providing site-specific technical and cost information on clean
energy compliance strategies to those major source facilities affected by
the Boiler MACT rule currently burning coal or oil. – These facilities may have opportunities to develop compliance strategies,
such as CHP, that are cleaner, more energy efficient, and that can have a
positive economic return for the plant over time
• DOE Boiler MACT Technical Assistance program was piloted in Ohio
starting in Feb. 2012 and has now been rolled out nationally
DOE Boiler MACT Technical Assistance
22 | Energy Efficiency and Renewable Energy eere.energy.gov
• Contact each facility to explain the program and the
analysis being offered
• Provide information on CHP as an alternative approach
sites can consider when developing a compliance
strategy
• Verify the specific site assumptions being used in the
analysis
• Conduct the decision tree analysis (simple spread sheet)
comparing strategy options
• Present results to the site
Technical Assistance Approach
23 | Energy Efficiency and Renewable Energy eere.energy.gov
Decision Trees
• Provides available site data: – General Site information
– Boiler information/configuration
– Compliance and conversion cost estimates
• Calculations – Average Steam Load
– CHP Sizing
– CHP Paybacks compared to other options
– 5 and 10 year cash flows
– IRR and NPV
24 | Energy Efficiency and Renewable Energy eere.energy.gov
Ohio – U.S. DOE Pilot Program
“Because of coal plant retirements, educating consumers on combined
heat power is of particular interest to the PUCO. A facility’s decision to
invest in CHP may constitute a rational market response that not only
benefits the facility but which will also supports grid reliability in Ohio.”
- PUCO Chairman Todd Snitchler. February 23, 2012
http://www.puco.ohio.gov/puco/index.cfm/industry-information/industry-topics/us-doe-pilot-program-for-
combined-heat-power/
• September 2011: Ohio Gov. John Kasich hosts energy summit
and expresses interest in promoting CHP for its economic and
environmental benefits.
• Winter 2011: U.S. DOE, through the Midwest Clean Energy
Application Center, offers to pilot technical assistance to boiler
operators in Ohio.
• February 2012: PUCO adopts resolution in support of the DOE
pilot and becomes the first state to participate.
25 | Energy Efficiency and Renewable Energy eere.energy.gov
Ohio – U.S. DOE Pilot Program
• U.S. DOE’s role: Provide site-specific technical and cost
information to facilities that are burning coal or oil in their
boilers and are affected by EPA Boiler MACT Rules.
– Target the 50+ major source facilities (~ 90 to 100 boilers) in
Ohio
– Information on financial incentives available at the local, state,
utility and federal levels as well as private financing
• PUCO’s role: Identified key areas of information needs
and held workshops (in-person and via the web)
– 3 workshops for facilities considering CHP
– 1 workshop to elicit ideas for policy change
– 1 workshop to expand outreach to facility owners via natural gas
key account reps
– Work with CEAC on training for natural gas utilities
26 | Energy Efficiency and Renewable Energy eere.energy.gov
Results: PUCO outreach
385 people attended 5 CHP workshops at PUCO
405 people joined the PUCO listserv on CHP
3,500 unique page views of our CHP web page for:
-- Archived workshop webcasts
-- Existing and potential CHP facilities in Ohio
-- CHP rulemakings and tariffs
-- Technical assistance and reports
27 | Energy Efficiency and Renewable Energy eere.energy.gov
• Over 50 companies contacted
• 16 feel they are already in compliance
• 6 no longer in business
• Analyses for 18 in various stages
• Analyses completed for 2 sites
• All companies are now aware of how CHP can assist in
a compliance strategy
• DOE will continue to track results of results of technical
assistance
Results To Date: Boiler MACT Pilot in Ohio
28 | Energy Efficiency and Renewable Energy eere.energy.gov
• Sites contacted in 10 states so far (Ohio, Massachusetts,
New York, Connecticut, Pennsylvania, North Carolina, Wisconsin,
Idaho, Iowa, and West Virginia)
• Preliminary Findings:
– Most end-users have been thinking about Boiler MACT
compliance
– Some have waited until the final passing of the EPA rule before
investigating options (thinking rule may never pass)
– Several end-users have already come under compliance (most
often with new natural gas boilers)
– Many end-users have been contacted by engineering companies
and are in the midst of making decisions on their compliance
plans
– Approx 20% of sites contacted are moving forward with CEAC
technical assistance
National Rollout of Technical Assistance
29 | Energy Efficiency and Renewable Energy eere.energy.gov
DOE Boiler MACT Resources Available
• DOE webpage on Boiler MACT Technical Assistance: http://www1.eere.energy.gov/manufacturing/distributedenergy/boilermact.html
– DOE Boiler MACT Technical Assistance Fact Sheet:
http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/boilermact_tech_asst_factsheet.pdf
• List of available state incentives for emissions controls, EE measures, boiler replacements/tune-ups, CHP, and energy assessments (DOE)
– http://www1.eere.energy.gov/industry/states/pdfs/incentives_boiler_mact.pdf
• Extensive assistance materials for Area Source rule available from EPA
– Tune-up guidance, fast facts, brochure, table of requirements, small entity compliance guide, etc.
– www.epa.gov/ttn/atw/boiler/boilerpg.html
30 | Energy Efficiency and Renewable Energy eere.energy.gov
Upcoming HR 6582 Report
31 | Energy Efficiency and Renewable Energy eere.energy.gov
Report on the Deployment of Industrial EE (H.R. 6582)
• Background to the American Energy Manufacturing
Technical Corrections Act (H.R. 6582) passed Dec 4,
2012
• DOE report due in 2 years describing:
– Study: “The legal, regulatory, and economic barriers to
the deployment of industrial energy efficiency in all
electricity markets (including organized wholesale
electricity markets, and regulated electricity markets).”
– Recommendations & guidance: “In coordination with the
industrial sector and other stakeholders, shall develop
policy recommendations regarding the deployment of
industrial energy efficiency, including proposed regulatory
guidance to States and relevant Federal agencies to
address barriers to deployment.”
32 | Energy Efficiency and Renewable Energy eere.energy.gov
(A) The legal, regulatory, and economic barriers to the deployment of
industrial energy efficiency in all electricity markets (including organized
wholesale electricity markets, and regulated electricity markets), including,
as applicable, the following:
• (i) Transmission and distribution interconnection requirements.
• (ii) Standby, back-up, and maintenance fees (including demand
ratchets).
• (iii) Exit fees.
• (iv) Life of contract demand ratchets.
• (v) Net metering.
• (vi) Calculation of avoided cost rates.
• (vii) Power purchase agreements.
• (viii) Energy market structures.
• (ix) Capacity market structures.
• (x) Other barriers as may be identified by the Secretary, in coordination
with the industrial sector and other stakeholders.
Report on the Deployment of Industrial EE (H.R. 6582)
33 | Energy Efficiency and Renewable Energy eere.energy.gov
(B) Examples of—
• (i) successful State and Federal policies that resulted in greater use of
industrial energy efficiency;
• (ii) successful private initiatives that resulted in greater use of industrial
energy efficiency; and
• (iii) cost-effective policies used by foreign countries to foster industrial
energy efficiency.
(C) Estimated economic benefits to the national economy of providing the
industrial sector with Federal EE matching grants of $5,000,000,000 for 5- and
10-year periods,
(D) The estimated energy savings available from increased use of recycled
material in energy-intensive manufacturing processes.
Report on the Deployment of Industrial EE (H.R. 6582)
34 | Energy Efficiency and Renewable Energy eere.energy.gov
• Executive Order
http://www.whitehouse.gov/the-press-office/2012/08/30/executive-
order-accelerating-investment-industrial-energy-efficiency
• Better Buildings, Better Plants
http://www4.eere.energy.gov/challenge/
• SEE Action IEE and CHP Working Group
http://www1.eere.energy.gov/seeaction/
• Combined Heat & Power
http://www1.eere.energy.gov/manufacturing/distributedenergy/ceacs
.html
• DOE webpage on Boiler MACT Technical Assistance
http://www1.eere.energy.gov/manufacturing/distributedenergy/boiler
mact.html
For More Information
Katrina Pielli, [email protected],