generating cash from your backup generator

www.cppwind.com www.cppwind.com

Generating Cash From Your Backup Generator

I2SL 2015 Conference

September 22, 2015

Sergio A. Guerra, Ph.D. – CPP Inc.

Emergency Backup Engines

Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 2015 2

Backup Engines and Sustainability


Outline

1. Emergency backup generators and applicable air regulations.

2. Lucrative way to be socially and environmentally responsible.

3. Rollercoaster of Engine Regulations.


Emergency Backup Generators and Applicable Air Regulations


Does it need a permit?

General Requirements

• Emergency engines have less strict emission requirements than non-emergency ones.

• State and/or local agencies may have more stringent requirements.


Emergency Engine Compliance

Existing engine:

• Change oil/filter & inspect hoses/ belts every 500 hours or annually; inspect air cleaner (CI) or spark plugs (SI) every 1,000 hours or annually

– May use oil analysis program

• Operate/maintain per manufacturer’s instructions or owner-developed maintenance plan

• Minimize startup/idle

• Non-resettable hour meter

• Records of hours of operation and maintenance

• Initial notifications NOT required

New engine:

• Meet Stationary Engine NSPS

– part 60 subpart IIII if CI; part 60 subpart JJJJ if SI


Engine Air Regulations

• National Emission Standards for Hazardous Air Pollutants (NESHAP) for Stationary Reciprocating Internal Combustion Engines (RICE)

– 40 CFR part 63 subpart ZZZZ

• New Source Performance Standards (NSPS) for Stationary Compression Ignition (CI) Internal Combustion Engines (ICE)

– 40 CFR part 60 subpart IIII

• NSPS for Stationary Spark Ignition (SI) ICE

– 40 CFR part 60 subpart JJJJ


Overview of RICE NESHAP & NSPS

• RICE NESHAP regulates HAP emissions from stationary RICE at both major and area sources of HAP. – All sizes of CI and SI engines are covered,

– Both new & existing RICE are covered,

– Defers to NSPS for certain engines.

• RICE NSPS standards regulate new, modified, and reconstructed sources, not existing; control is for criteria pollutants.

• NSPS covers different types of RICE beginning in 2005.


RICE NESHAP

• Public comment submitted in response to RICE NESHAP:

“40 CFR Part 63 Subpart ZZZZ . . . is the most complicated and confusing regulation in the entire suite of EPA NSPS and NESHAPS regulations, bar none. We seriously believe that a viable defense could be mounted against an EPA enforcement action with the simple but true statement: 'Your honor, we honestly could not discern our obligation under the rule in a timely manner.”

• EPA’s navigation tools: http://www.epa.gov/ttn/atw/rice/output/quiz.html

• http://www.epa.gov/region1/rice/


http://www.epa.gov/ttn/atw/rice/output/quiz.html

http://www.epa.gov/region1/rice/

http://www.epa.gov/region1/rice/

Engine Subcategories


Useful Definitions in RICE NESHAP

• Regulates HAP emissions from stationary RICE at both major and area sources of HAP

– Major Source: ≥10 tons/year single HAP or ≥25 tons/year of combined HAP.

– Area Source: not major.

• Type of Engine:

– Compressor Ignition(CI): Diesel.

– Spark Ignition (SI): gasoline, landfill gas, natural gas, propane).



• Emergency Engine: “. . . operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary RICE used to produce power for critical networks or equipment . . .when electric power from the local utility . . . is interrupted, or stationary RICE used to pump water in the case of fire or flood, etc.”

• Commenced construction date: when owner/operator has entered a contractual obligation.



Engines >500 Horsepower (HP) at major source of HAP:

• Existing engines if constructed before December 19, 2002

• New engines if constructed on or after December 19, 2002

Engines ≤500 HP located at major source of HAP and engines of all horsepower located at an area source of HAP:

• Existing engines if constructed before June 12, 2006

• New engines if constructed on or after June 12, 2006 Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 2015 14

Emergency Engine Operational Limitations

• Unlimited use for emergencies (e.g., power outage, fire, flood)

• 100 hr/yr for:

– maintenance/testing

– emergency demand response (EDR) when Energy Emergency Alert Level 2 has been declared by Reliability Coordinator

– voltage or frequency deviates by 5% or more below standard

• 50 hr/yr of the 100 hr/yr allocation can be used for:

– non-emergency situations if no financial arrangement

– local reliability as part of a financial arrangement with another entity if: • existing RICE at area source

• engine is dispatched by local transmission/distribution system operator

• dispatch intended to mitigate local transmission and/or distribution limitations so as to avert potential voltage collapse or line overloads

• dispatch follows reliability, emergency operation, or similar protocols that follow specific NERC, regional, state, public utility commission, or local standards or guidelines

• power provided only to facility or to support local distribution system

• owner/operator identifies and records dispatch and standard that is being followed

– peak shaving in local system operator program until May 3, 2014 if existing RICE at area source


Lucrative Way to be Socially and Environmentally Responsible

• Make your engine work for you

• Help provide grid reliability

• Protecting Environment


What are Demand Response Programs?

• Demand response (DR) programs are designed to reduce electricity demand when power reliability or capacity is compromised.

• DR programs can also include economic demand response triggered when electricity prices are high.

• DR programs include:

– Reducing electricity use,

– Relying on alternative fuel capabilities,

– Tapping into on-site generation (i.e., emergency diesel engine[s])


Why DR Programs?

• Provide grid reliability when supply is compromised by:

– Higher demand for electricity, or

– Storms or natural disasters.

• Alternative supply to replace power generated by retired power plants (i.e., older coal plants).

• Scarcity of new power generation facilities due to an expensive and lengthy process.

• Participants receive economic incentives.


Why Diesel-Powered Emergency Generators?

• According to EPA, there are about 1.5 million stationary engines in the US and about 900,000 of these are used for emergency power generation.

• Present in laboratories, hospitals, data centers, universities, hotels, and other businesses.

• Reliable and underutilized equipment.

• Quick response time: within 10 s. of power failure.


DR Programs for Backup Generators

• Program are organized through power company to provides businesses significant saving opportunities.

• Businesses can participate in these programs to help meet electric requirements at critical times.

• Participants receive monthly credit based on:

– Load that agree to control

– Number of hours

– 1-hour or 10-minute notice

– Winter or summer.

• Based on a per kW monthly credit.


DR Programs for Backup Generators • Usually need at least 300kW of interruptible

demand.

• Options to limit interruptions to maximum of 4 hours in a 24-hour period.

• During an interruption period, need to reduce your electricity use down to the firm demand chosen in your program agreement.

• Interruption events are triggered as a result of capacity, contingency and/or economic constraints.

• Economic interruptions are the only interruptions that offer a buy-through option.


Colorado Interruptible Service Option Credit (ISOC)

• ISOC Program Event History:


Engine Emissions of Concern

• Mainly NOx and VOC emissions (ozone precursors).

• High ozone tends to also occur during hot/sunny days.


Use of Backup Engines during DR Events

• On July 22, 2011, PJM 7-hour event backup diesel generator participation emission estimates of – 109 tons of NOx in the region

– 3 tons of PM in the region

• For the region, July 21 and July 22 also coincided with the highest ozone readings that month.


Rollercoaster of Engine Regulations


New Developments

• On May 1, 2015 the US Court of Appeals for the DC Circuit remanded the 100-hour “exemption” for Reciprocating Internal Combustion Engines (RICE).

• This exemption allowed owners/operators of an emergency RICE to provide backup power for DR Programs while still being classified as an emergency engine under rule.


Consequence of Court Ruling

• Emergency engines are not “emergency” if participating in DR Programs.

• Make sure emergency engines meet non-emergency standards.

• Tier IV Engines may already meet these regulations.

• Court rulings is not settled.


Summary

1. All engines need permits.

2. Emergency engines can help stabilize grid, save money and protect environment.

3. Regulations are ever changing, get proper advise to get your permit or before enrolling in DR programs.


Sergio A. Guerra, PhD

[email protected]

Direct: + 970 360 6020

CPP, Inc.

2400 Midpoint Drive, Suite 190

Fort Collins, CO 80525

+ 970 221 3371

@SergioAGuerra

Thank You!

www.cppwind.com

mailto:[email protected]

generating cash from your backup generator

Engineering