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Good evening, my name is Melissa Mullarkey and I’m the policy associate at Recycled Energy Development (RED), which is a Chicago-based firm that seeks to cut emissions profitably by capturing waste energy. RED partners with manufacturing facilities in order to increase industrial productivity and cut pollution. RED appreciates the opportunity to comment on the Proposed Rule for Mercury and Toxics Standards for power plants. We applaud the efforts EPA has made to recognize the value of efficiency in the proposed rules.
My comments address two areas of the rule pertaining to combined heat and power, or CHP. First, it is appropriate for EPA to recognize the environmental benefits of electricity generated by efficient CHP units by accounting for on-site generation’s avoidance of line losses from the transmission and distribution of electricity; we believe, however, the proposed 5 percent benefit is far too low. Second, we believe plants that seek to comply with MACT by installing clean CHP should be granted the opportunity to apply for a one-year extension.
CHP’s environmental benefits should be recognized, including its ability to cut line losses and displace less efficient electric-only generation. We believe, however, the suggested 5-percent benefit is too low. Line losses from centrally generated electricity now average 6.5 percent and can rise to 20 percent during peak hours, costing the U.S. grid about $26 billion annually. Studies at Carnegie Mellon University and MIT have shown that one megawatt-hour (MWh) of local generation, like CHP, can displace up to 1.47 MWh of central generation, suggesting a 47 percent benefit for efficient CHP.
These numbers imply the CHP benefit should be well above 5 percent. In addition to being more efficient and less polluting, CHP projects significantly reduce line losses, free existing transmission, provide less expensive back-up electricity, and generate sustainable base load power.
The most efficient and effective compliance option is to install natural gas-fired CHP. CHP developers and environmental engineering firms, however, worry that three years may not be sufficient time for boiler owners to design, permit, and install a CHP system. EPA regulations already recognize the same potential delays for owners seeking to install add-on pollution controls, allowing those owners to petition for a one-year extension for the installation of such controls. We urge EPA to clarify that CHP can be deemed “controls,” thereby allowing the same one-year extension to apply for the installation of efficient CHP or clean waste heat recovery. Absent this clarification, facilities may be deterred from pursuing these technologies that ultimately lead to greater fuel savings and emission reductions.
RED understands EPA is operating under a tight timeline to publish the final rule by November 16, 2011, and we appreciate the opportunity to provide oral comments.
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The final Utility MACT rule should provide a benefit greater than 5% for CHP’s avoidance of transmission and distribution losses.