INSTITUTIONAL FACTORSAND COGENERATION

Fred L. JonesCogen Designs, Inc.

Loss of an Old Reliable

US Says It Won’t Back New International Coal-fired Power PlantsBy Michael D. Shear, NY Times (10/29/2013)

WASHINGTON - In an aggressive move to impose President Obama’s environmental policies overseas, the Treasury Department on Tuesday largely declared an end to United States support for new coal-fired power plants around the world. The decision means that Mr. Obama’s administration will no longer contribute to coal projects financed by the World Bank and other international development banks. That sense of paternalism toward much of the developing world is almost certain to provoke anger in countries where stable, consistent power is fleeting and where coal can provide a cheap solution. The administration, in all corners and in all areas, is trying to act consistently to undermine the use of coal.

A Fond Farewell

New EPA Rules for Waste

“…some CISWI owners and operators are likely to determine that alternatives to waste incineration are viable, such as sending the waste to a landfill. Sources operating incinerators may find it cost-effective to discontinue the use of their CISWI unit altogether.”

“The EPA expects that many existing CISWI owners and operators may find that alternate disposal operations are preferable to complying with the standards.”

“The EPA is not aware of any construction of new units since 2000. The revised CISWI rule is more stringent, so we expect this trend to continue.”

“We do not anticipate that any new energy recovery or waste-burning kiln units will be constructed.”

“We believe it likely that the incinerators may elect to discontinue the use of their CISWI unit and send the waste to the landfill.”Source: 40 CFR 60 Part 241, Federal Register 76, No. 247, Dec. 23, 2011

GHG Burden from Biomass Disposal

Basis: 1 million bone-dry tons in 2000

Source: Morris, G, “Biomass Energy Production in California: The Case for a Biomass Policy Initiative,” NREL Report No. NREL/SR-570-28805, Nov. 2000

CO2 Emissions

At Point of Generation

Ideology vs Environment

Judges Question EPA Authority to Defer Greenhouse Gas Permitting for BiomassTuesday, April 9, 2013from Energy and Climate Report

WASHINGTON, D.C.--Federal appeals court judges during oral argument April 8 pressed the Environmental Protection Agency to explain where in the Clean Air Act it is given the authority to temporarily exempt large industrial sources burning biomass and some landfills from greenhouse gas permitting requirements (Center for Biological Diversity v. EPA, D.C. Cir., No. 11-1101, oral argument 4/8/13).

Judge Brett Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit warned EPA against “carve-outs that aren't seemingly in the text. Now EPA doesn't like the policy and

is saying it can create an ad hoc exemption.” A coalition of environmental groups, including the Center for Biological Diversity, Natural Resources Defense Council, and Clean Air Task Force, challenged the exemption rule as unlawful and unwarranted.

EPA Blocking LNG?

EPA May Be Trying to Slow LNG Export Drive08/12/2014 | Thomas Overton, Assoc. Editor, “Power Magazine”

With three recent requests to the Federal Energy Regulatory Commission (FERC), the Environmental Protection Agency (EPA) has signaled it may seek to slow the recent drive to export liquefied natural gas (LNG).

Three times this year, the Texas regional office of the EPA has asked FERC to consider wider impacts of increased greenhouse gas emissions that may result from LNG development and increased natural

gas demand. The EPA also raised concerns of environmental justice, suggesting that the three projects might have disproportionate impacts on minority communities and complaining that FERC appeared to ignore previous comments the EPA made on the subject.

There are currently 26 LNG export applications awaiting DOE and FERC approval for export to

countries without free-trade agreements with the U.S., according to DOE data.

A Refinery Case Study

Location: West Virginia/Ohio BorderUtility: FirstEnergy/Monongahela Power

News Release - February 11, 2012

“Ohio-based FirstEnergy Corporation announces it will close three coal fired power plants in West Virginia this fall. The closings come directly from the impact of new federal EPA regulations … The high cost to implement MATS and other environmental rules is the reason these Mon Power plants are being retired.”

“Monongahela power has a generation capacity deficit of 938 MW this year, and projects this to increase to 1,400 MW by 2026. Meanwhile, FirstEnergy has also announced the closing of two other coal plants in the area due to the costs of complying with the new environmental regulations.”

Customer Location

Refinery

MarcellusShale GasBasin

AppalachianCoalBasin

Low Sulfur Coal

High Sulfur Coal

Electric Power

Refinery Turnaround

Steam & Power Demands

Boiler Efficiency

Site Conditions

Solar Centaur 50 Turbine

Cost of Power

System Performance

Economic Performance

T60x2: $2.4 MM/yr Savings 6.3 year Payback

Customer Case Study 2

Location -- Michigan U.P.Application -- Manufacturing

U.P. Power Plant’s Fate Will Cost Whole Region MillionsBy Keith Matheny, Detroit Free Press, October 19, 2014

A nearly 60-year-old, coal-fired power plant near Marquette could cause a big spike in all Upper Peninsula electric customers’ bills.

Our big customers are looking at hundreds of thousands of dollars more per month. And with U.S. EPA rules on the levels of toxins being released by the plant set to stiffen, the costs will likely continue to rise.

“This is the biggest crisis that the U.P. faces right now,” said state Rep. Scott Dianda, D-Calumet.

Existing Generation System

5 MW Steam TurbineInstalled: 1929

Steam Data

Steam Turbine Performance

Solar Taurus 60 Turbine

Power Profiles

Cost of Power

Savings/Payback

T60: $2.7 MM/yr Savings 3.7 year Payback

Emissions

NOx*CO*SO2

PM*CO2*AP-42

0.410.181.330.04202

0.0890.1090.0030.007114.6

0.1000.0800.0030.010114.6

Coal Stoker Gas Turbine HRSG

NOxCOSO2

PMCO2

27812690927

138,138

4445

1.63.8

53,602

Lb/MMBtu

Tons/year Coal Stoker Taurus 60 System

Case Study 3

Location: MichiganCustomer: Municipal UtilitySummer Peak: 70 MWSteam Customers: 2

Hospital Chemical Plant

Existing System

Options

3.7 MW Backpressure Steam Turbine21 MW Titan 250 Gas Turbine 42 MW GE LM6000 PF Gas Turbine

GasTurbine

HRSG

Option #1 - BP Turbine

3.7 MW Total Capacity$2.6 Million ($700/kW)

Option #2 - 32 MW GT/CC

32 MW Total Capacity7,967 Btu/kWh$20.3 Million ($631/kW)5.1¢/kWh

Option #3 - 178 MW GT/CC

178 MW Total Capacity7,161 Btu/kWh$95 Million ($532/kW)4.7¢/kWh

CO2 Emissions

At Point of Generation

Greenhouse Gas Emissions

USEPACO2 Cap1,000 lb/MWh

Summary

Changes in Environmental Regulations will have a major impact on the cost and reliability of our utility system.

These changes may promote more self-reliance in industrial power situations.

These future regulations can be either a benefit or an obstacle to cogeneration development, depending on how they are interpreted and enforced.

Postscript

Power EngineeringApril 2015

Hunlock Power Station44 MW Coal, built 1958 New Capacity 125 MW

95+% Reduction in 1° PollutantsMeets EPA 1,000 lb CO2/MWh

LM 6000 GT/HRSGExisting Steam Cycle