Keyword(s): Air Compliance Electricity Related Act(s): Environmental Protection Act, R.S.O. 1990

Transcription

1 Policy Decision Notice: Title: Emission Limits for Internal Combustion Engines used for Non-Emergency Power Generation Keyword(s): Air Compliance Electricity Related Act(s): Environmental Protection Act, R.S.O. 1990

2 Decision on Policy: The Ministry has set out a policy on emission limits for small combustion engine generators to promote clean electricity generation. Ontario has directed the Ontario Power Authority (OPA) to create a plan that would maintain a clean, reliable and affordable supply of electricity in the province for the next 20 years. The plan would focus on conservation, supply and transmission projects, which would lead to significant air quality benefits. Ontario s goal for conservation is to reduce peak demand by 6,300 megawatts. The policy set out in this posting will help to encourage clean small scale generation, which can contribute to achievement of Ontario s conservation target. The Ministry of Environment has made the decision to implement the policy as outlined in the original proposal, Emission Limits for Internal Combustion Engines used for Non-Emergency Power Generation. No substantial changes have been made to the policy that was posted for public consultation. The Ministry has decided not to continue the practice of restricting the operation of non-emergency generators on smog days, unless the site-specific conditions warrant. The limits and requirements of this policy will be implemented through Certificates of Approval (Cs of A), with guidance for this implementation laid out in the summary of requirements document accompanying this decision posting. Verification of the limits set out in the proposal for monitoring and verification will include requiring information on emissions in the form of emission guarantees, followed by compliance verification through on-site testing. Comment(s) Received on the Proposal: 37 Public Consultation on the proposal for this decision was provided for 30 Days, from January 31, 2008 to March 01, As a result of public consultation on the proposal, the Ministry received a total of 37 comments: 25 comments were received in writing and 12 were received online. Additionally, a copy of all comments are available for public viewing by contacting the Contact person listed in this notice. A selection of these comments are available: Effect(s) of Consultation on this Decision: 37 comments were received on the proposal. Comments were received from engine manufacturers, medical officers of health, potential Demand Response 3 (DR3) program aggregators, environmental organizations and the public. In general, engine manufacturers, potential Demand Response 3 program aggregators and environmental organizations were supportive of the policy although concerns were raised on various aspects as discussed below. Medical officers of health were not supportive of any policy that would allow diesel generators to be used in order to meet peak demand for power. The issues raised by the comments are outlined below, along with the Ministry s responses: Issue 1: Smog Days Restriction: Several comments were received regarding the consideration to restrict the operation of generators on days when the Ministry of the Environment (MOE) has issued a Smog Advisory. Currently, the MOE restricts the operation of non-emergency generators on Smog Advisory days through conditions in Certificates of Approval (Cs of A) for diesel and bi-fuel. Some commented that smog day restrictions would limit the ability of generator sets to participate in the Demand Response 3 program. Others support smog day restrictions to provide protection of health. Response: The limits outlined in this decision would control emissions of pollutants, such as particulate matter (PM), nitrogen oxide (NOx), volatile organic compounds (VOCs) and sulphur dioxide (SO2), that contribute to smog-related pollutants such as fine particulate and ozone. Unless the site-specific circumstances warrant, it is not anticipated that Cs of A administered under this policy will be subject to smog day conditions. An example of a site-specific condition that could warrant the use of a smog day

3 restriction is a generator set that is located on a property that Ontario Regulation 419/05 (Local Air Quality) identifies as a sensitive receptor. This includes child care facilities, health care facilities, senior citizens residences or long-term care facilities, or educational facilities. Generator sets that are currently operating under pre-existing Cs of A that do not reflect this policy will continue to be subject to the conditions of the existing C of A, including, if applicable, smog day restrictions (see Issues 3 and 6 below). Those operating under existing C s of A can request an amendment, at which point, the policy would be applied. In all cases, point of impingement limits will continue to apply. Issue 2: Nitrogen Oxides (NOx) limits Several comments were received on the proposed air pollutant limits, particularly for NOx, as set out in the policy proposal. Some comments were supportive of the proposed limits, indicating these limits are achievable with current new generator sets (e.g., natural gas). Others comments suggested that the limits especially for NOx - were too stringent, which would create a barrier for existing generator sets to operate or participate in the DR3 program. Some comments noted that even new engines would not be able to meet the proposed limits without the addition of control technology, and that the Ontario limit would create a new unique class of clean engines that is not available commercially. Response: This policy will maintain the limits set out in the original policy proposal: NOx Limits (expressed as nitrogen dioxide equivalent) 1.0 kg/mwh ( ) 0.40 kg/mwh (2011 onward) PM Limits 0.2 kg/mwh ( ) 0.02 kg/mwh (2011 onward) NMHC Limits (total hydrocarbons excluding methane) 1.3 kg/mwh ( ) 0.19 kg/mwh (2011 onward) CO Limits 3.5 kg/mwh (2007 onward) These limits will apply during normal operating conditions, and not during start-up. The MOE proposed these limits to ensure the protection of air quality in Ontario and to be consistent with the direction to replace electricity generation from coal with cleaner and renewable sources. These limits will assure that emissions from generator sets are similar to those from natural gas combustion turbines. The MOE noted the comments on the impacts on the ability of existing generator sets to participate in programs such as DR3. However, allowing the existing generator sets to operate without sufficient controls would not allow the government to achieve the environmental benefits of phasing out coal-fired electricity generation. In addition, one of the goals of Ontario s Integrated Power System Plan is to reduce total peak demand from conservation, including load reduction initiatives such as small scale customer based generation, including small natural gas co-generation and tri-generation. The limits on the generator sets would ensure any small scale generation would be clean, consistent with the intentions of the government to reduce total peak demand from conservation measures, as outlined in the Ministry of Energy s directive to the Ontario Power Authority. These limits would be fuel, size and technology neutral, meaning they would apply to all generator sets using different types of fuels (gasoline, diesel, bio-diesel, natural gas, bi-fuels), all internal combustion engine technologies (compression ignition, spark ignition), and across all size ranges. Some types of equipment are able to meet the limits without additional controls, and some may need additional add-on controls. The final limits outlined in the decision summarize the requirements for all users for a wide range of applications, without trying to favour specific technologies. Issue 3: Consistency with the US Environmental Protection Agency s New Source Protection Standards (NSPS): (Compression Ignition versus Spark Ignition, size ranges of generators, new versus existing generators)

4 A number of comments noted that although some proposed limits in this policy originate from the US NSPS for non-road and stationary emissions, the policies are not identical, particularly for NOx. In addition to the different NOx limit (discussed above), the MOE policy, unlike the NSPS, does not distinguish between Compression Ignition and Spark Ignition engines, nor between different size ranges of generators. Also, the MOE policy applies to all generator sets (new and modified), while the NSPS applies only to new generators. Response: The MOE has based its NOx limit on the combustion turbine guideline (A-5) limits for natural gas, which is different than NOx limits in the US NSPS for compression ignition internal combustion engines (CI-ICE). The emission limits for this policy were chosen in order to ensure that electricity energy generated in the province is cleaner than coal-fired electricity generation and similar to those from natural gas combustion turbines. The same limit is applied for all fuels and size ranges of generator set to assure a reasonable level of performance, and to allow for ease of implementation and a level playing field for all generator sets. The limits and requirements of this policy will be implemented through Cs of A (Air) for any new or modified sources. It should be noted that changing the use of a generator from emergency use only to non-emergency use is a modification that would require an amendment to the C of A, and would require demonstration that the limits in this policy would be met. Therefore, existing generator sets that are not being modified will not be affected at the current time by this policy, and will continue to be subject to conditions set out in their current Cs of A. However, the MOE may consider the use of regulations in the future. The policy on existing generator sets may be reviewed at that time. Issue 4: Ultra-Low Sulphur Diesel and Equivalent Fuels The policy states that all generator sets used in non-emergency situations be required to run on Ultra Low Sulfur Diesel (ULSD), which has a maximum allowable sulphur content of 15 parts per million (ppm). Where other fuels are used, maximum allowable equivalent sulphur emission levels will be required. Some comments requested clarification on what is meant by maximum allowable equivalent sulphur emission levels that are required when fuels other than diesel are used. Response: The proposed policy indicated the use of ULSD would meet the requirements. However, if a proponent chooses to use a fuel with higher sulphur content, then it could choose to implement controls to reduce the sulphur compound (e.g., SO2) emissions so that the performance would be equivalent to the use of ULSD. It will be the responsibility of the proponent to demonstrate the use of higher sulphur fuels with controls will be equivalent in performance. Issue 5: Method for Implementation: The policy proposal noted that a number of options were being considered for implementation of the policy, including Cs of A (Air), an Environmental Protection Act (EPA) regulation, and development of an MOE Guideline. The proposal sought input on the approach for implementation of the proposed limits and requirements. The majority of comments supported implementation through conditions set out in Cs of A. Response: The limits and requirements of this policy will be implemented through Cs of A, with guidance for this implementation laid out in the attached summary of requirements document accompanying this decision posting. Cs of A offer the quickest method of implementation for the policy. This will provide clarity for proponents that are looking to move forward with approvals for generators. The accompanying summary document provides details for proponents on the limits and requirements. Issue 6: Grandfathering of already approved units and 2011 limits There are a number of generator sets in the units that have already been approved to operate in nonemergency situations, through conditions in their current Cs of A, will they be affected by the policy? Will generators approved prior to 2011 have to meet the more stringent limits that phase in during 2011? Response: As noted earlier, the limits and requirements of this policy will be implemented through Cs of A (Air) for any new or modified sources, including generators where use is changing from emergency use only to non-emergency use. Therefore, existing generator sets that are not being modified will not be affected at the current time by this policy, and will continue to be subject to conditions set out in their

5 current Cs of A. However, the MOE may consider the use of regulations in the future. The policy on existing generator sets may be reviewed at that time. The intention of the policy is to apply limits that are consistent with clean generation currently and to improve them in the future. This policy will phase in more stringent emission limits for pollutants in Any proponent of generator sets will need to meet the 2008 limits and then the 2011 limits, which is consistent with the interim targets that the government has set for phasing out coal-fired power generation by All Certificates of Approval (Air) issued for generators where this policy applies will expire on January 1, 2011, unless the approval is for the more stringent 2011 limits. Proponents will need to re-apply for the Certificate of Approval (Air) if they are to continue the operation of the existing generator sets after this time. The Ministry will apply the applicable emission limit requirements at the time of the application. Issue 7: Clarity on application of limits to existing regular diesel generator operations (e.g. bridge building, construction sites) Comments were received from a number of industries (including construction and water supply) requesting clarification as to whether the policy would apply to generator sets used in the course of regular operations. Response: Ontario Regulation 524/98 Certificate of Approval Exemptions Air, exempts any equipment, apparatus, mechanism or thing that is used, at the site of a building or structure, for the construction, alteration, demolition, drilling or blasting of the building or structure. The Regulation also exempts any equipment, apparatus, mechanism or thing that is part of a large municipal residential system or a small municipal residential system, as those systems are defined in Ontario Regulation 170/03 (Drinking Water Systems) made under the Safe Drinking Water Act, These exemptions continue to apply but there are two important points to note. First, with respect to the construction equipment, the ministry is of the view that that this exemption only applies to generators being used in the course of regular construction operations. If a proponent was to use the generators to participate in a peak-shaving or demand-response program such as the Ontario Power Authority s DR3 Program, a C of A would be required, and the generator(s) would need to meet the requirements laid out in this policy. Second, in respect of the residential drinking-water system, similar conditions to those described above could be imposed as part of the licenses or approvals issued under the Safe Drinking Water Act, 2002 in respect of those systems. Issue 8: Diesel generation contributes to system reliability and should be encouraged Some comments noted that the use of diesel generation contributes to reliability of Ontario s power system, and should be encouraged. Response: The MOE acknowledges that reliability is a priority for the province s power system, and that small distributed generation is one of many tools that can be used to contribute to this reliability. However, allowing the existing generator sets to operate without sufficient controls would not allow the government to achieve the environmental benefits of phasing out coal-fired electricity generation. The limits on the generator sets would ensure any small-scale generation would be clean, consistent with the intentions of the government to reduce total peak demand from conservation measures, as outlined in the Ministry of Energy s directive to the Ontario Power Authority. Issue 8a: The need to take avoided emissions into account Some comments noted that the policy should take into account the emissions that are avoided through the use of independent electricity generation as a result of combined heat and power (CHP) systems. Other comments note the benefits of distributed generation which avoid transmission and transformation losses, and start-up and shut-down agility. Several comments noted even natural gas internal combustion engines, including those used in combined heat and power applications, would have difficulties in meeting the proposed NOx limits. However, other comments noted gas fired internal combustion engines are able to meet all the limits. Response: The Ministry has reviewed the information on the limits and have confirmed that natural gas internal combustion engines are available that would meet the limit being proposed; therefore, the Ministry has not revised the limit for natural gas internal combustion engines or provide any adjustments

6 for combined heat and power applications. The effect of transmission and start-up/shutdown agility was not considered as relevant for this policy. It should be noted that new, cleaner generation from gas turbines and renewable energy are being distributed in locations near to load centers, so that emissions and transmission losses have become less of an issue. In the absence of the proposed controlled limits, generator sets with much higher emissions than coal fired power plants could be used as part of the DR3 program, or to meet peak demands and other on-site electricity needs. This would not be consistent with the government direction to replace coal with cleaner sources of electricity. Issue 9: DR 3 units could help to clean up the existing fleet of emergency generators Some comments noted that encouraging the use of emergency generators for independent electricity generation could help clean up the existing fleet of emergency generators. Response: Proponents may voluntarily implement clean generator sets in order to participate in a demand response program. However, the MOE needs more assurance that the generator sets will be clean. The proposed policy provides greater certainty that generator sets will be properly controlled. Issue 10: Generator set use will contribute to poor air quality Some comments noted that allowing emergency generators to be used in non-emergency power generation situations will contribute to poor air quality. Response: The MOE acknowledges that emissions from generators without sufficient controls can have negative impacts on human health and the environment. The limits in this policy assure that emissions from generator sets are similar to those from natural gas combustion turbines, which is consistent with Ontario s direction to replace electricity generation from coal with cleaner and renewable sources. Issue 11: Verification of compliance with the policy: The posting noted that initially, operators would be required to provide supporting information on emissions in the form of emission guarantees from equipment suppliers or validated source testing information, and that ongoing compliance could be verified with periodic source testing consistent with the provisions of, for example, the ISO8178 C1, 8-mode steady-state test cycle. Comments were received supporting verification from both on-site testing and manufacturers certification. Response: The policy sets out the requirements for monitoring and verification including, requiring information on emissions in the form of emission guarantees followed by compliance verification through on-site testing. Issue 12: EA Requirements: Several comments were received with regards to requirements for emergency generators under O.Reg. 116/01 (The Electricity Projects Regulation) under theenvironmental Assessment Act (EAA). Response:The EAA requirements in respect of emergency generators were not considered as part of this proposal. However, the ministry acknowledges the comments and may consider policies on environmental assessment requirements at a later date. EBR Registry Number: Ministry: Ministry of the Environment Date Decision loaded to the Registry: February 27, 2009 Date Proposal loaded to the Registry:

7 January 31, 2008