The Energy & Power Management Industry Forum this week at Automation Fair presented by Rockwell Automation began with an overview of how environmental regulations are affecting industrial energy management strategies presented by Diane Fischer, air quality control services area leader, Black & Veatch. Fischer's expertise is air quality control, advising industry on compliance. "There are any number of regulations we could discuss," she said, "but since our time is limited, we'll focus on new boiler maximum achievable control technology (MACT) and pending greenhouse gas [GHG] emissions regulations."
Fischer readily acknowledged that regulations are not a pleasant topic in industrial circles. "If you like sausage and respect the law, don't watch either of them being made. This is especially true of regulations," she said. Court cases lead to indecision, which makes it hard for industry to plan and develop strategies.
New Rules for Industrial Boilers
For example, boiler maximum available control technology (MACT) regulations were promulgated in January 2013 to regulate hazardous pollutants from industrial boilers. Originally issued in 2004, then vacated in 2007, the regulations were reissued in 2010, then reconsidered, then finalized for publication in January of this year. "They're the poster child of difficulties for issuers and industry," Fischer said.
Read Also: Smart Machines and Savvy Supply Chains
Boiler MACT compliance begins with understanding that the commercial/industrial solid waste incinerator (CISWI) section separates regulation of fuel-fired boilers from waste-fired boilers. To find the part of the regulations that applies to you, first determine if you're burning fuel. If so, determine the kind of source your boiler represents: an "area source" or a "major source." Then you can find the right standards for emissions of hazardous air pollutants (HAPs) in five categories, with the appropriate levels of proxy contaminants used to limit them. The HAPS and their proxies are acid gases: HCl, mercury; Hg, HAP metals; particulates, organic HAPs; CO, and finally dioxins and furans, which are controlled by work practice requirements.
Additional rules and requirements are intended to make sure boilers are maintained and operated to maximize efficiency and include energy assessments, work practice standards and tune-up requirements.
Greenhouse Gases Up Next
"The history and nature of the MACT rules provide a good background for estimating the timing and effects of GHG regulations, coming up soon as part of Obama's climate change policy to regulate GHG emissions from power plants," Fischer said. Most industrial facilities are not directly affected, but need to understand the new regulations because they "will change the energy landscape in the United States."
Current draft standards for new units, issued in September, are a re-proposal of rules written in April, 2012. They call for a 50% to 60% reduction in emissions. "Natural gas combined cycle units will meet these easily," Fischer said. "Simple units will not."
June 2014 will bring new rules for existing power-generation units. According to Section 111(d) of the Clean Air Act, states will develop their own regulations based on EPA guidelines. Draft EPA guidelines are expected to be given to the states in June 2014 for comments and finalized to the states in June 2015. States are to issue final regulations in June 2016. "Expect both supply- and demand-side regulations," Fischer said. Getting a grip on GHGs will rely as much or more on how electricity is consumed as on how it is generated."
The new regulations are likely to follow a similar path as MACT. "I can't say what these regulations will look like, but I can guarantee they'll be challenged in court," Fischer said. Litigation is likely to focus on whether Section 111(d) is an appropriate way to regulate GHGs, the authority of the EPA versus the states and details of the requirements.
The overriding message is the challenge of managing uncertainty. "There may be changes due to the 2014 elections--what will Congress look like?" Fischer asked. "We may have a new law instead of regulation. It's not likely, but it's a possibility." Economic forces are also likely to come into play. "Gas prices have been low; the economy has an effect. All these will affect the path of these regulations."
Uncertainty is challenging for "strategic folks in industry," Fischer said. She recommends doing scenario planning, identifying key economic factors for your business and preparing to make adjustments. "Don't box yourself into a specific future. Leave room for changes."
The Power & Energy Management forum also included presentations on how energy management at the University of Texas at Austin has reduced consumption to 1977 levels despite a doubling in square footage; how Tyson Foods piloted and is rolling out a company-wide energy management strategy; and the commercialization of fuel cells in multi-megawatt-scale industrial applications. These will be detailed in Friday's edition of this newsletter.