Note
to:
Files
From:
Doug
Carter,
DOE/
FE­
26
Subject:
Analysis
of
NSR
rule
impacts
Date:
August
11,
2003
Introduction
Both
EPA
and
DOE/
EIA
have
modeled
potential
impacts
of
allowing
efficiency
upgrades
on
coal­
fired
power
plants,
and
results
of
these
simulations
were
included
in
the
draft
Regulatory
Impact
Analysis
(
RIA)
published
by
EPA.
The
major
differences
in
the
two
analyses
were
that
they
used
different
simulation
models
(
NEMS
vs
IPM),
and
they
evaluated
somewhat
different
assumptions
for
how
the
change
at
the
power
plant
might
manifest
in
operation
(
i.
e.,
assumptions
on
efficiency,
capacity,
and
availability
changes).
After
additional
consideration,
DOE
conducted
further
analysis,
using
assumptions
differing
from
both
of
the
earlier
analyses.

Discussion
A
change
in
the
definition
of
"
routine
maintenance,
repair,
and
replacement"
(
RMRR)
would
likely
remove
a
barrier
to
improvements
in
power
plant
efficiency,
which
is
generally
perceived
as
a
positive
outcome,
with
probable
emission
reduction
implications.
Such
changes
could
also
affect
availability,
if
companies
repair
or
replace
components
which
are
likely
sources
of
future
breakdowns,
and
capacity,
if
repairs
enable
a
unit
to
increase
its
electrical
output
with
or
without
an
increase
in
fuel
consumption.
Increases
in
availability
and
capacity
would
likely
lead
to
an
emissions
increase,
if
applied
uniformly
across
all
coal
units.
Hence,
from
an
emissions
perspective,
there
is
a
tension
between
pure
efficiency
improvements,
and
availability
or
capacity
improvements.

Availability
changes
are
perhaps
the
easiest
to
consider
with
available
data.
A
substantial
body
of
data
accumulated
by
the
North
American
Electric
Reliability
Council
(
NERC)
shows
that,
over
the
past
two
decades,
reliability
at
coal­
fired
power
plants
has
improved,
but
at
a
declining
rate
in
recent
years.
The
data
in
Figure
1
suggest
that
future
improvements
in
availability
will
be
modest
compared
to
improvements
in
the
1980'
s,
for
example.
A
cumulative
future
improvement
of
1%
seems
like
a
most
likely
scenario,
but
an
improvement
of
2%
may
be
possible.
These
two
values
are
recommended
for
assessment.

Possible
efficiency
improvements
have
been
discussed
adequately
in
the
draft
RIA.
They
apply
almost
equally
to
the
"
boiler
side"
of
the
power
plant
and
the
"
turbine
side".
Improvements
of
up
to
15%
seem
feasible
with
known
or
emerging
technologies.
Earlier
modeling
by
DOE
evaluated
rates
of
5%,
10%,
and
15%.
Because
improvements
of
15%
were
essentially
extensions
of
the
trends
established
by
the
1
Telecommunication
between
D.
Carter,
DOE,
and
R.
Moates,
TVA,
July
29,
2003.
Telecommunication
between
D.
Smith,
DOE,
and
J.
Murphy,
SAIC,
July
29,
2003.
lower
efficiency
improvement
assumptions,
it
is
recommended
that
improvements
of
5%
and
10%
be
assessed.
A
greater
efficiency
improvement
is
still
deemed
reasonable,
given
the
ongoing
voluntary
programs
to
minimize
carbon
dioxide
emissions
as
well
as
the
potential
for
fuel
savings
and
lower
overall
operational
costs,
but
the
emission
implications
of
such
efficiency
improvements
can
be
inferred
from
simulations
of
efficiency
improvements
of
5%
and
10%.

The
significant
change
in
this
set
of
simulations
by
DOE,
compared
to
DOE's
earlier
analysis,
is
the
inclusion
of
an
assumed
improvement
in
capacity,
where
efficiency
is
improved.
(
EPA's
simulations,
included
in
the
draft
RIA,
incorporated
capacity
increases,
but
DOE's
did
not.)
DOE
discussed
this
issue
with
knowledgeable
individuals
involved
in
power
generation1
and
reached
the
following
conclusions:

 
Most
older
power
plants
in
the
U.
S.
were
designed
with
excess
capacity
in
the
turbine
unit,
compared
to
the
boiler
systems.
Newer
plants
in
the
U.
S.
are
designed
in
a
more
balanced
manner.
Typical
steam
turbines
in
the
1960'
s,
for
example,
would
have
the
ability
to
generate
about
10%
more
electricity
than
the
boiler
could
support
with
steam
production.

 
Many
existing
units
operate
outside
their
original
design
specifications,
due
to
use
of
lower
sulfur
coal,
application
of
low­
NOx
burners,
or
other
changes
which
have
left
the
boilers
with
insufficient
auxiliary
equipment,
such
as
pulverizers,
to
maintain
original
design
steam
production.
These
changes
have
impacted
the
boiler­
side
of
the
power
plant
more
than
the
steam
turbine­
side.

To
the
extent
that
most
steam
turbines
are
thought
to
have
greater
capacity
than
the
associated
boiler
can
support,
it
is
reasonable
to
conclude
that
a
turbine
efficiency
upgrade
would
extend
capacity
only
to
the
extent
that
the
boiler
was
also
upgraded.
Since
relatively
equivalent
efficiency
improvements
are
envisioned
for
both
the
boiler
and
turbine
systems
at
a
power
plant,
the
net
effect
on
capacity
(
for
improving
both
boilers
and
turbines)
should
be
about
one­
half
the
improvement
in
efficiency.
This
is
the
assumption
recommended
for
assessment.

Scenario
Matrix
Table
1
identifies
assumptions
used
in
the
current
computer
analysis.
Assessments
of
efficiency
improvements
of
15%
are
not
necessary
because
these
results
can
be
inferred
from
the
5%
and
10%
simulations,
and
earlier
runs.
Table
1.
Simulation
Run
Heat
Rate
&
Capacity
Increase
Availability
Increase
Base
0
0
S5.1
5%
&
2.5%
1%
S5.2
5%
&
2.5%
2%
S10.1
10%
&
5%
1%
S10.2
10%
&
5%
2%

Figure
1
Coal
Unit
Availability
(
NERC)

70
75
80
85
90
95
100
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Availability
Fac
tor
0.5
%/
year
change
0.5
%/
year
change
0.3
%/
year
change
0.1
%/
year
change
Results
The
revised
assumptions
led
to
modest
changes
from
the
projected
emission
baselines.
Figures
2
and
3
show
the
projections
for
emissions
of
nitrogen
oxides
(
NOx)
and
sulfur
dioxide
(
SO2).
The
efficiency,
capacity,
and
availability
improvements
for
each
simulation
are
indicated
in
the
legends
on
the
figures.
For
SO2,
it
was
surprising
that
emissions
changed
at
all,
given
the
national
limit
on
power
plant
SO2.
The
small
projected
changes
are
due
to
possible
"
banking"
behavior,
in
which
source
owners
control
more
in
some
years
and
less
in
others
to
minimize
anticipated
control
costs.
Over
time,
all
of
these
scenarios
net
out
to
the
same
cumulative
SO2
emission
reductions.
For
the
scenarios
simulated,
NOx
emissions
are
consistently
less
than
baseline
emissions,
although
the
reduction
is
quite
minor
for
the
simulations
assuming
only
5%
improvements
in
heat
rate.

Figure
4
shows
projected
emissions
of
mercury
under
all
of
the
scenarios
modeled.
Emissions
under
a
more
flexible
NSR
policy
are
consistently
lower
than
baseline
emissions,
with
the
exception
of
certain
years
in
the
case
for
5%
efficiency,
2.5%
capacity,
and
2%
availability
improvement.

In
general,
for
the
scenarios
including
10%
improvements
in
heat
rates,
non­
capped
pollutant
emissions
were
reduced
by
about
2­
5%,
relative
to
the
base
case
(
current
NSR
policy).
For
scenarios
including
5%
improvements
in
heat
rates,
non­
capped
emissions
were
reduced
by
0.5
 
2%.
For
the
lesser
set
of
efficiency
improvement
simulations,
there
were
certain
combinations
of
assumptions
which
led
to
small
emission
increases
in
specific
years.

Figure
2
Power
Plant
Changes
&
Emissions
­
2
4
6
8
10
12
20
02
2003
2004
20
05
20
06
2007
2008
20
09
2010
2011
20
12
2013
2014
2015
20
16
2017
2018
20
19
2020
2021
2022
2023
2024
2025
Emissions,
Million
tpy
NOx
Baseline
SO2
Baseline
NOx
5­
2.5­
1
SO2
5­
2.5­
1
NOx
5­
2.5­
2
SO2
5­
2.5­
2
Figure
3
Power
Plant
Changes
&
Emissions
­
2
4
6
8
10
12
2002
2003
2004
2005
2006
2007
2008
2009
2010
2
011
2012
201
3
201
4
2015
2
016
2017
20
18
201
9
2020
2021
2022
2023
2024
2025
Emissions,
Million
tpy
NOx
Baseline
SO2
Baseline
NOx
10­
5­
1
SO2
10­
5­
1
NOx
10­
5­
2
SO2
10­
5­
2
Figure
4
Power
Plant
Changes
and
Mercury
47
48
49
50
51
52
53
54
55
2002
2003
2004
2005
2006
200
7
2008
2009
2010
2
011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Emissions,
tpy
Baseline
Mercury
Mercury
10­
5­
1
Mercury
10­
5­
2
Mercury
5­
2.5­
1
Mercury
5­
2.5­
2
Related
Considerations
The
projections
in
this
analysis
do
not
include
consideration
of:
 
Heat
rate
(
efficiency)
improvements
exceeding
10%
 
Improvements
occurring
to
a
subset
of
coal
units,
such
as
units
above
a
certain
size
or
less
than
a
certain
age
 
Potential
improvements
to
similar
technologies
not
burning
coal
In
general,
all
of
these
considerations
would
tend
to
change
the
extent
of
predicted
changes,
but
not
the
direction.
Additionally,
although
heat
rate
improvements
as
low
as
5%,
and
availability
improvements
as
high
as
2%
are
deemed
possible
scenarios,
a
scenario
of
10%
heat
rate
improvement,
5%
capacity
improvement,
and
1%
availability
improvement
is
considered
a
central
tendency
for
the
industry
under
a
more
flexible
NSR
policy.

Conclusions
Future
emissions
from
power
plants,
aggregated
at
a
national
level,
are
projected
to
decrease
under
a
broad
set
of
scenarios
which
are
predicated
on
an
NSR
policy
which
encourages
equipment
replacement
that
leads
to
higher
efficiency.
Under
a
"
most
likely"
scenario,
emissions
of
pollutants
which
are
not
"
capped"
by
regulation
would
decrease
by
roughly
2­
5%.
