Special provisions apply to waste to energy facilities : IN DEPTH: The U.S. Clean Power Plan - Opportunities for Energy from Waste

Distribution of Fossil Fuel Power Plants across the Contiguous United States

In August, President Barack Obama and the U.S. Environmental Protection Agency announced the Clean Power Plan, a program designed to reduce greenhouse gas emissions from electricity production and help protect human health and the environment from the impacts of climate change. Potentially it could open the door to new waste to energy developments in the U.S.

By John H. Skinner, Ph.D.

The plan establishes the first-ever CO2 emission standards for electric power plants. Over 2500 existing fossil-fuel fired electric power plants will be required to reduce their CO2 emissions by 32% by 2030, as compared to 2005. Carbon dioxide is the most prevalent greenhouse gas, accounting for 82% of U.S. greenhouse gas emissions. The power plants covered by the plan are by far the largest domestic source making up 32% of total U.S. greenhouse gas emissions.

The plan will create significant new opportunities for renewable energy sources, including renewable energy derived from solid waste. One goal of the plan is to more than double the use of renewable energy from 13% today to 28% by 2030. The emission standards for fossil fuel facilities combined with the renewable energy goal will create a significant new demand for energy from many renewable sources, including biogas from landfills and anaerobic digestion facilities, electricity from waste to energy facilities and renewable fuels from gasification and other waste conversion technologies.

The documents explaining the plan including the emission standards for power plants can be found on the EPA website (http://tinyurl.com/osnlp62)

Key Elements

The Clean Power Plan establishes emission guidelines for the States to use in reducing CO2 emissions from existing fossil fuel-fired electric generating units. Two categories of electric generating units are covered by this program: 1. electric utility steam generating units fired by fossil fuels (predominantly coal) and 2. combustion turbines fired by natural gas.

In the U.S. there are over 1000 existing fossil fuel fired steam generating units that will be covered by the plan and over 1500 existing natural gas fired combustion turbines. EPA has established final CO2 emission performance rates for these two categories of electric generation units as follows: 1305 pounds (592 kg) of CO2 per MWh for steam generating units and 771 pounds (350 kg) of CO2 per MWh for the gas turbines. These final performance rates would apply in the year 2030, and EPA has also established interim emission performance rates that would apply over the period of 2022 to 2029.

The emission performance rates were determined for each type of unit by employing the Best System of Emission Reduction (BSER) which is comprised of three building blocks for reducing CO2 emissions: 1. reducing the heat rate of existing coal facilities, 2. increasing the use of natural gas, and 3. increasing the use of renewable energy sources. For each building block, EPA considered the ranges of emission reductions that could be achieved at the different types of plants at a reasonable cost.

The emission guidelines will be administered and enforced predominantly by the States and EPA has provided considerable flexibility to the States in meeting their responsibilities, which in turn will provide several options for the regulated facilities in meeting their requirements.

A Flexible Regulatory Approach

While EPA has established specific emission performance rates for the two types of power plants, it has translated these rates into overall CO2 emission goals for each State. It did this by using each State’s electric generating capacity for fossil steam and natural gas units. The result is a State-by-State emission goal and each State would have the opportunity to establish an emission reduction program to meet the overall State goal.

To provide even more flexibility for the States, the EPA has expressed this goal in two ways, a rate-based goal (CO2 emissions per MWh) and a mass-based goal (tons of CO2). States can then develop emission control programs so that the power plants in their State, either individually, together or along with other CO2 reduction efforts (such as increasing use of renewables and energy efficiency measures) meet either the rate-based or mass-based goals. States may choose between two types of plans to meet their goals:

An Emission Standards Plan. This would apply enforceable emission standards to all affected power plants within the State in order to meet the state-specific rate-based or mass-based goal.

A State Measures Plan. This would include a mixture of measures such as increased use of renewable energy and programs to improve residential energy efficiency that along with enforceable emission standards for affected power plants would meet the State’s mass-based goal.

Through such an approach a States will have the flexibility to select the measures they prefer to achieve the emission reductions and can tailor their efforts based upon energy and environmental considerations.

The EPA has issued a regulation that establishes the requirements for State plans, the schedule for plan submittal and the criteria for EPA approval. In addition, the agency will establish a Federal plan for a State, if the State does not to participate in the program. The regulation also provides for coordination and cooperation among the States, through multi-state agreements and through emission trading.

Emission Trading

States may allow affected power plants to use emission trading approaches (emission rate credits, or emission allowances), to comply with the emission standards. A facility may receive an emission rate credit for reducing emissions below the specified emission rate standard or for generating electricity from renewable sources. These credits could be retained for future use or traded to other facilities where they can be used for compliance. The credits would be subject to evaluation, measurement and verification requirements.

Under an emission allowance approach, each affected power plant would be required to hold an allowance that authorises the amount of CO2 that could be emitted during a specified period. Allowances that are not used could be retained, transferred to, or traded with other facilities.

The applicability of emission rate credits and emission allowances would depend on whether the State program is mass-based or rate-based. Emission allowances and emission rate credits will be important instruments for increasing the use of renewable resources.

Opportunities for Renewable Energy

The use of renewable energy will likely be a key strategy for States and affected power plants in meeting their emission reduction goals. The limits on CO2 emissions from power plants will make renewable energy sources more competitive with fossil fuels and should result in an increase in investment in renewable energy.

Under a mass-based State program, renewable energy used within a State to displace in-State fossil fuel generation, would help achieve the overall State mass-based emission goal. This would be true whether the renewable energy was generated within or outside of the State. States using a mass-based approach may provide additional support for renewable energy by allocating emission allowances directly to renewables. If a State auctions emission allowances, the State could distribute some of the proceeds to renewable energy projects as an economic incentive.

Under the rate-based approach only newly developed renewable energy would count towards compliance. A newly developed renewable energy source would be one that was installed after 2012 and that will produce power in 2022 and beyond. Capacity upgrades at existing renewable energy facilities that occur after 2012 would qualify as newly developed renewable energy. States may issue emission rate credits to qualified and verified, new renewable energy generators who may transfer or sell the credits to existing sources, which may use them for compliance. Emission rate credits could be traded to existing sources in any State with a compatible rate‐based emission trading program.

The EPA has proposed two model rules, one mass-based and one rate-based that offer States streamlined approaches for incorporating renewable energy in State plans. Also through a Clean Energy Incentive Program, agency will provide additional allowances or credits to early installation of solar and wind projects.

Renewable Energy from Solid Waste

New renewable energy generated from qualified biomass would be eligible for compliance in a rate-based State Plan. If a State intends to allow for the use of biomass as a compliance option, the State must propose qualified biomass feedstocks and treatment of biogenic CO2 emissions in its plan, along with supporting analysis and quality control measures.

The regulation defines biomass to include the non-fossil, biodegradable, organic fractions of industrial and municipal wastes, including gases and liquids recovered from the decomposition of non-fossil, biodegradable organic material. Clearly, methane produced from the anaerobic digestion of organic municipal solid waste in landfills or in anaerobic digesters is covered by this definition, and could be included as qualified biomass in a State plan. The definition of biomass would also encompass the biogenic portion of liquid fuels produced by gasification or pyrolysis of the organic fraction of municipal and industrial waste.

Special provisions apply to waste to energy facilities, which are defined as units such as incinerators that recover energy from the conversion or combustion of solid waste, to generate electricity or heat. The final rule clarifies that waste to energy is not a regulated source under the emission guidelines. In fact, the biogenic portion of municipal solid waste combusted in a waste to energy facility would be considered qualified biomass under certain conditions, and could be included as renewable energy in an approvable State Plan.

With respect to waste to energy facilities, the EPA regulation acknowledges the emission and climate benefits of biogenic fuels in waste to energy facilities. However, EPA recognises the importance of integrated waste materials management strategies that emphasise a hierarchy of waste prevention, reuse, recycling and composting. Therefore, States planning to use waste to energy as an option in their plans, must include their plan submissions, their efforts to implement new waste reduction, reuse, recycling and composting programs, and include measures to minimise any potential negative impacts of waste to energy operations on such programs.

Since only electric generation at a waste to energy facility resulting from the combustion of the biogenic fraction of municipal solid waste would be qualified, a State plan must include the method to be used for determining the biogenic fraction.

Therefore rate-based State plans could issue tradable emission rate credits, to new renewable energy generated from landfill and anaerobic digester methane and to the biogenic energy from waste to energy facilities. The same waste-based renewable energy sources could qualify for tradable allowances under State mass-based plans. Through these measures, renewable energy derived from municipal solid waste could become important aspects of State plans to comply with the emission guidelines for electric power plants.

Next Step

The final rule containing the emission guidelines for existing sources was published in the Federal Register on October 23, 2015 and will become effective on December 22, 2015. States are required to submit State plans for EPA approval by September 6, 2016, but EPA may provide for a two-year extension under certain circumstances. State plans must ensure that the initial emission goals are achieved no later than 2022 and that the final goals are achieved 2030.

On October 23 the EPA also published a proposed Federal plan that would be applied in States that either don’t submit a State plan, or whose plan was not approved. Public comments on this proposed rule are due by January 23, 2016.

Operators of facilities that produce renewable energy from solid waste need to be very proactive to assure that State and Federal plans incorporate waste-based renewable energy. This includes ensuring that the plans incorporate emission trading approaches and that renewable energy from waste qualifies for emission rate credits or emission allowances depending on whether the plans are mass or rate-based. Facility operators need to undertake the necessary monitoring and verification actions to qualify for emissions trading.

Operators of waste to energy facilities need to work with the States to develop reasonable and practical approaches to increase new waste reduction, reuse, recycling and composting programs. Waste to energy operations also need to understand and be prepared to implement the necessary measures to minimise any potential negative impacts on such programs.

The regulations governing the Clean Power Plan will certainly face continued legal and political challenges. A number of coal producing States have already filed suit and there likely will be lengthy litigation that may eventually reach the U.S. Supreme Court. In anticipation, the EPA has carried out unprecedented outreach to States, utilities and the public, including addressing more than 4.3 million comments that were received on the proposed rule.

The Administrator of the EPA has recently publically stated that she is confident that the regulations will withstand judicial review. The 2016 Presidential and Congressional elections also create some political uncertainty, but unless there is a Republican sweep of the Presidency and both Houses of Congress, it will be very difficult to politically overturn the rule.

The Clean Power Plan has the potential to significantly reduce greenhouse gas emissions from U.S. power plants. The plan provides States and electric utilities ample flexibility and the time needed to achieve these reductions. Implementation of the plan will help assure that fossil fuel-fired power plants will operate more cleanly and efficiently, while considerably expanding the capacity for renewable power sources.

Energy derived for solid waste can play a significant role in meeting the plan’s objectives and the solid waste and energy recovery industry need to work proactively and take the initiative to make the most of this new opportunity.

**Author Details**

John Skinner is an independent environmental consultant based in Washington, DC. He serves on the ISWA Board representing the National Members. In April 2015, he retired as executive director and CEO of the Solid Waste Association of North America (SWANA).