Cogeneration engines are great at efficiently generating heat and power.
But there is a dark side that most salespeople don’t talk much about: the complexities of meeting compliance with SCAQMD rules and regulations while operating a cogeneration engine.
Non-compliance with the SCAQMD’s rules can lead to violations, fines, inspections, or even criminal prosecution, so it’s important to understand the types of regulations that you may be subject to if your facility decides to purchase and commission a cogeneration engine.
Should You Consider a Cogeneration System?
Before going into the regulations that relate to a cogeneration engine, let’s first discuss a few benefits of cogeneration, as noted by the Center for Climate and Energy Solutions:
Cogeneration, also known as combined heat and power (CHP), refers to a group of proven technologies that operate together for the concurrent generation of electricity and useful heat in a process that is generally much more energy-efficient than the separate generation of electricity and useful heat.
The typical method of separate centralized electricity generation and on-site heat generation has a combined efficiency of about 45 percent whereas cogeneration systems can reach efficiency levels of 80 percent.
In the United States, cogeneration has a long history in the industrial sector. Globally, industry sites in the chemicals, metal, oil refining, pulp and paper, and food processing sectors represent more than 80 percent of total global electric CHP capacity.
Cogeneration is widely deployed outside the United States, with Denmark, the Netherlands, and Finland leading the world in cogeneration deployment as a fraction of total national electricity generation.
In 2008, cogeneration accounted for 9 percent of total U.S. electricity generating capacity. A recent study by the Oak Ridge National Laboratory calculated that increasing that share to 20 percent by 2030 would lower U.S. greenhouse gas emissions by 600 million metric tons of CO2 (equivalent to taking 109 million cars off the road) compared to “business as usual.”
If that sounds appealing to you, you might consider commissioning a cogeneration system for your facility — but only after evaluating the effort it takes to maintain regulatory compliance.
Air Quality Regulations to Consider When Pursuing Cogeneration
In Southern California, there are various rules and regulations that could impact a facility with a cogeneration system, which makes it critical to address compliance standards during the project-planning and early-implementations phases. Otherwise, you could face compliance issues and see significant additional costs during the operation of the cogeneration engine.
The part of the cogeneration system that you should be concerned with is the engine, or driver, which is most affected by the various air quality regulations.
Let’s briefly review these regulations, so you understand what you could be dealing with when buying a cogeneration system.
SCAQMD Permitting (Rule 201)
Arguably one of the most important considerations when purchasing a cogeneration engine is air permitting. Within the SCAQMD, permitting is almost always required for the engine that is driving the cogeneration system if it has a rating of over 50 horsepower (HP).
A complete SCAQMD permit application consists of three components:
- Permitting forms
- Permitting fees
- A detailed engineering evaluation
If your permit application does not have all of those components, your project can get held up in the permitting process.
There are three things to remember when going through the permitting process for your cogeneration engine:
1. Get an emissions guarantee from the manufacturer.
In the SCAQMD, emissions of oxides of nitrogen (NOx), volatile organic compounds (VOCs), and carbon monoxide (CO) from these engines are tightly regulated, so you want to be sure that the manufacturer is willing to guarantee — in writing — what the levels of NOx, VOCs, and CO emitted from the engine will be. Submit that data as part of your permit application.
2. You may need to install a NOx-control system, like a selective catalytic reduction (SCR) system.
Whether or not you need such a system depends on the type of engine used in your cogeneration system. If you do need one, be sure that the manufacturer of the SCR system provides you with information related to the ammonia slip so you can submit it with your permit application.
3. You may need a continuous emissions monitoring system (CEMS).
If so, the CEMS unit will require its own permit application separate from the cogeneration application.
SCAQMD’s Rule 1110.2
This rule is part of the SCAQMD’s efforts to reduce NOx, VOCs, and CO emissions from liquid- or gaseous-fueled engines with a brake horsepower (BHP) greater than 50. Rule 1110.2 imposes strict emission limits on engines and requires numerous other monitoring, reporting, and recordkeeping requirements.
Some of the requirements of this rule include:
- a CEMS for engines exceeding 1000 BHP
- biennial source testing
- weekly/monthly emissions checks for NOx and CO
- an inspection and maintenance program (I&M)
- maintenance of an operations log
In our experience, implementing a Rule 1110.2 compliance program requires a significant amount of effort and coordination between engine mechanics and emissions testers, as well as the facility operating the engine, in order to maintain compliance.
RECLAIM Program (Regulation XX)
The SCAQMD implements a cap-and-trade program on facility-wide emissions of NOX and oxides of sulfur SOX in their Regional Clean Air Incentives Market (RECLAIM) program.
In order to be pulled into the RECLAIM program, your facility’s NOx and/or SOx emissions must be equal to or greater than 4 tons per year (TPY). That means that the size of your cogeneration engine alone could determine whether or not you are required to participate in RECLAIM.
Read more about the SCAQMD RECLAIM program.
CARB’s Mandatory Reporting of Greenhouse Gases (17 CCR 95102)
While the SCAQMD implements a NOx/SOx cap-and-trade program, the California Air Resource Board (CARB) implements a suite of greenhouse gas (GHG) regulations, including a cap-and-trade and a mandatory reporting program for CO2.
Under the CARB greenhouse gas program, facilities that emit more than 10,000 MT of CO2e (metric tons of carbon dioxide equivalent) per year are subject to mandatory reporting of greenhouse gas emissions. Facilities must submit an annual GHG emissions report to the CARB by either April 1 or June 1, depending on facility type.
In addition, facilities that emit more than 25,000 MT CO2e/year are subject to a cap-and-trade program for CO2 and must have a third party verify their emissions report because they are also subject to the CARB’s cap-and-trade program for CO2.
Under California’s cap-and-trade program for GHGs, a covered facility must offset each ton of CO2 emissions with a trading credit (called allowances or offsets) at a 1:1 ratio that is submitted to the CARB each year.
Similar to the SCAQMD RECLAIM program, facilities can get pulled into the CARB GHG programs simply by installing a cogeneration engine.
EPA’s Mandatory Reporting of Greenhouse Gases (40 CFR 98)
In addition to California’s program for reporting GHG, the Environmental Protection Agency (EPA) also requires some facilities to report GHG emissions on an annual basis if the facility emits more than 25,000 MT CO2e/year.
Note that the EPA and CARB GHG programs are two completely different programs that have completely separate reporting requirements. (For the optimists among you, that makes it doubly fun.)
EPA’s Accidental Release Program (40 CFR 68)
In certain cases, a cogeneration engine will have an SCR to reduce NOx emissions. If your engine falls into this category, your facility could also be subject to the accidental release program (ARP) due to the ammonia that is sometimes found in SCR systems. The ARP is designed to prevent the accidental release of hazardous substances (HS) and extremely hazardous substances (EHS).
In California, the accidental release program is overseen by the Certified Unified Program Agencies, which are local regulatory agencies certified by the California Environmental Protection Agency.
Under the ARP, a facility is required to submit a Risk Management Plan (RMP), which must be updated every five years. The RMP describes the potential effects of an accidental release of the HS/EHS and outlines preventive measures and emergency response protocols.
Currently, the threshold quantity for inclusion in this program for ammonia is 20,000 lbs.
Let’s be clear, we’re not at all opposed to cogens. We just want to give you a better idea of the regulations that apply to the operation of these engines, because those are the areas that usually have the highest costs and potential for problems.
Regulatory compliance problems can be avoided, but only if you understand where others have had trouble.
