By Deborah Jennings and Andrew Schatz
If California regulators approve a proposed AES combined-cycle natural gas-fired peaking power plant, it could blur the standard for Best Available Control Technology (BACT) for greenhouse gas (GHG) emissions from gas-fired electric generating facilities. EPA expressly excluded simple cycle peaking units from its recently proposed New Source Performance Standards (NSPS) for GHGs because combined cycle units, which are GHG lower-emitting, were presumed not to be useable as peakers. By virtue of AES’s proposed combined-cycle peaking plant, EPA may be moved to change its view. Low-emitting combined cycle may set the BACT standard for future, gas-fired peaking units as a result.
AES is proposing to use a combined-cycle system in a peaking capacity at its Huntington Beach Energy Project (HBEP) in Huntington Beach, California. See AES Southland Development, LLC, BACT Determination for the Huntington Beach Energy Project (June 2012). The HBEP will consist of two combined cycle power blocks with a net capacity of 939 MW to be used for peaking and supplying local capacity. AES’s proposal to use combined-cycle for a peaking unit is notable because typically peakers have been simple cycle systems. The combined-cycle system is more efficient than simple cycle systems and has lower GHG emission rates. Whereas simple cycle systems combust natural gas to generate electricity, combined cycle-systems also capture lost heat from the combustion process to generate additional electricity through a steam turbine (i.e. a heat recovery steam generator). Accordingly, BACT for GHG emissions at the HBEP project results in an GHG emissions rate of 1,082 pounds of CO2 per megawatt-hour (lbs CO2/MWh). In contrast, a recent BACT determination for the simple cycle “peaking” power plant at the Pio Pico Energy Center in San Diego was 1,181 lbs CO2/MWh.
Regulatory agencies have struggled to determine what constitutes GHG BACT for natural gas (and other fossil-fuel) fired power plants. Regulatory authorities have declined to require natural gas-fired power plant projects to consider GHG lower emitting combined-cycle technologies in a BACT analysis. For example, in June 2012, Wisconsin authorities declined EPA Region V’s request to consider the use of combined-cycle gas turbines in a GHG permit for a wastewater utility fuelled by landfill gas.
EPA has sent conflicting signals on the issue. In the past, EPA has suggested from time to time that combined cycle be considered in the BACT analysis for natural gas plants. However, in drafting its New Source Performance Standards (NSPS) for GHG Emissions for New Stationary Sources: Electric Utility Generating Units (EGUs), EPA concluded that it cannot require proposed simple cycle facilities to meet the NSPS designed for combined-cycle natural gas facilities based on functional differences in peaking plants. 77 Fed. Reg. 22392 (April 13, 2012).
Specifically, EPA declined to include simple cycle facilities as an affected source in the proposed 40 CFR part 60, subpart TTTT for GHG emissions from new facilities governing combined-cycle plants and coal-fired plants. Id. at 22411. In its NSPS proposal, EPA required new fossil fuel-fired EGUs greater than 25 MW to meet an output-based standard of 1,000 lb CO2/MWh, representing the performance of widely used natural gas combined cycle technology. Id. at 22392. (Interestingly, in setting the NSPS at 1,000 lb CO2/MWh, EPA proposes a more stringent threshold for GHG emissions from new facilities than even HBEP). In choosing to exclude simple-cycle facilities from this standard, EPA reasoned that unlike combined-cycle plants (which are typically designed to provide baseload power and are able to emit CO2 at similar levels), simple-cycle plants are typically designed to provide peaking power, operate less, and “it would be much more expensive to lower their emission profile to that of a combined cycle power plant.” Id. at 22411.
In proposing a relatively lower emitting combined-cycle for a peaking unit, the AES project casts doubt on EPA’s conclusion that simple cycle is different. Accordingly, EPA may come to impose combined-cycle BACT limits on future natural gas combustion peaking facilities.