An exploration of innovations in clean air technologies to address air quality problems today…
…and tomorrow
A REPORT OF THE CONFERENCE
May 26-27, 1999
Pittsburgh, Pennsylvania
Prepared by:
Christophe Tulou Associates
_____________________________________________________
TABLE OF CONTENTS
II. SCENARIO – The Perfect State
B. Session One
1. James M. Seif, Pennsylvania Department of Environmental Protection
2. Michael Winka, New Jersey Department of Environmental Protection
3. Questions/Answers
C. Session Two
1. Larry Berg, Ballard Generation Systems
2. Chris Forbes, Siemens-Westinghouse Power Corporation
3. Gary Mittleman, President and CEO, Plug Power
4. Kelly Brown, Ford Motor Company
5. Questions/Answers
Conn Abnee, Geothermal Heat Pump Consortium
Dana O’Hara, U.S. Department of Energy
a) Connecting Energy and Environmental Issues Through Technology
John Hanger, Citizens for Pennsylvania’s Future
1. John Trocciola, ONSI
2. Marc Roper, AstroPower
3. Questions and Answers
Rebecca Flora, Green Building Alliance
Mike McGuigan, SCS Engineers
E. Session Four
1. Marian Chertow, School of Forestry and Environmental Studies, Yale University
2. David Berg, U.S. Department of Energy
3. Penny Hansen, EPA Environmental Technology Verification Program
4. Praveen Amar, NESCAUM
5. Geoff Keith, MJ Bradley & Associates
6. Questions and Answers
V. NEXT STEPS
VI. Barriers and Recommendations
Meeting air quality objectives, particularly ground-level ozone standards, has never been easy. In fact, for many eastern states, it has been an impossible task. Working independently, these states simply cannot overcome the impacts of pollution crossing their borders from other states.
Recognizing the need for collective action, Congress created the Ozone Transport Commission (OTC) as part of its 1990 amendments to the Clean Air Act. The OTC is a regional body comprised of the environmental secretaries and commissioners from the 13 states stretching from Virginia to Maine, including the District of Columbia. Together, these states have taken aggressive regional action against ozone and its contributing pollutants, nitrogen oxides (NOx) and volatile organic compounds (VOCs).
Among its successes has been the OTC NOx Memorandum of Understanding, which calls for substantial NOx emissions reductions from electric utility boilers and other major stationary sources. The OTC also led the way through negotiations with automobile manufacturers to the creation of the voluntary National Low Emission Vehicle (NLEV) program which has provided cars 70% cleaner and four years sooner than would otherwise have been the case under the Clean Air Act.
Yet, even with the implementation of these measures, modeling projections indicate the National Ambient Air Quality Standards for ozone still cannot be met.
The OTC participated in the Ozone Transport Assessment Group (OTAG) effort involving over 30 states east of the Rocky Mountains to assess longer-range NOx and ozone transport issues and make recommendations for further action to the EPA. The result was the so-called 22-State SIP call, requiring dramatic reductions in NOx emissions for a broader cross-section of states, roughly equivalent to reductions contained in the OTC NOx MOU. The SIP call deadline was stayed by the District of Columbia Court of Appeals, pending further consideration by the Court.
The stay of the 22-State SIP call and a recent remand of regulations creating a new 8-hour ozone standard by the same Court has not diminished the urgency of the OTC’s work. New emissions control approaches must be developed and new technology encouraged whether the goal is attaining the new eight-hour ozone standard or maintaining progress with respect to the one-hour standard.
In response to remaining ozone challenges, the OTC is pursuing options to promote new technologies and facilitate faster implementation of existing effective technologies. Priority will be given to technologies that can reduce multiple pollutants simultaneously, thereby addressing both ozone and other regional pollutants, such as fine particulate matter and regional haze, which are linked to ozone.
As part of that effort, the OTC, in conjunction with the Carnegie Mellon University, co-sponsored the Clean Air Technologies 2000 conference, which took place on May 26-27, 1999, at the University in Pittsburgh, Pennsylvania.
This report summarizes the conference, and identifies for the OTC barriers to introduction of beneficial environmental technologies and recommendations on what could be done to facilitate their development and ultimate success in the market. The report is organized along the same topical lines as the conference itself. Barriers and recommendations are compiled at the end.
The report begins with a short scenario, or story, which captures many of the aspirations of conference speakers and participants. This scenario provides an opportunity to compare an "ideal" state experience, based on recommendations presented at the Clean Air Technology 2000 Conference, with actual state experience.
II. SCENARIO – The Perfect State
Chemical maker, EthylMethyl Corporation (EMC), plans a major expansion at its facility in the State of Perfection. The State is in a severe nonattainment area for ozone, PM10, and has a voluntary "no regrets" greenhouse gas reduction program.
EMC and its consultant have become aware of a relatively new package of technology and process changes developed by a Scranton, Pennsylvania firm which they believe will exceed NOx and PM emissions requirements, and will provide a substantial reduction in methane and CO2 emissions as well. The technology appears tailor-made for the facility’s manufacturing process, and has been successfully and affordably demonstrated at a few facilities in Europe and Asia.
Buoyed by this knowledge, EMC and its consultant approach the Air Quality Management Office at the Department of Environmental Protection (DEP). After explaining their expansion plans and anticipated emissions, they mention the "new" emissions-reduction technology to the permitting official seated before them. The response: a blank look and an admission that she had never heard of the technology.
But, a quick look at the international environmental technology database revealed to her that the technology had been verified in the State of South Dakota, and by reciprocal agreement through a 50-State/EPA MOU, data collected on the technology’s performance was accepted across the country.
"I’ll have to review the data and ensure that the equipment will permit you to meet our program requirements," replied the permit writer. "If so, I don’t foresee any particular problems. In fact, based on this data, it looks like you may be able to bank some credits and offset the cost of using the technology. There are several companies who haven’t found such good technology for their processes and are looking for credits.
"The more I look at this, the more I see possible applications for some of our other industries, including electrical generators. Since you would be the first application in our State, would you be willing to participate in our Environmental Technology Demonstration Project? We have coordinated regulations with several other state and federal agencies and the Public Utility Commission to offset some of the risk of testing these new technologies.
"The project will enable us to ensure the technology works as promised in a real-world application and is effective in meeting air program requirements. We will also evaluate impacts on other environmental media to document its effect on other environmental objectives. We will feed the results back into the database to assist other states with their technology evaluations, and to help the Scranton manufacturer make improvements for both domestic and overseas markets."
The road from current practice to this ideal vision of a technology "friendly" state is strewn with a host of challenges related to society’s inherent skepticism of innovations, as well as regulatory and investment burdens. This conference was designed to take a careful look at the state of the art of clean air technologies and to identify those barriers that complicate the introduction of these much-needed technologies. Recommendations for appropriate action arising from the conference will be forwarded to the full OTC for its consideration and approval.
Following is a brief summation of speakers’ comments during the conference. This summary will reflect presentations on the status and trends of various technologies, as well as any barriers and opportunities related to the development and commercialization of technologies.
James M. Seif, Secretary, Pennsylvania Department of Environmental Protection
Cliff I. Davidson, Director, Environmental Institute, Carnegie Mellon University
Bruce Carhart, Executive Director, Ozone Transport Commission
Secretary Jim Seif of the Pennsylvania Department of Environmental Protection offered
welcoming remarks on behalf of the Ozone Transport Commission, the sponsor of the
conference. Secretary Seif highlighted the goal of the conference: to provide the Ozone
Transport Commission (OTC) with potential actions for promoting the introduction and use
of technologies to meet clean air objectives.
Cliff Davidson welcomed speakers and attendees on behalf of Carnegie Mellon University, which hosted the event.
Bruce Carhart provided an overview of the agenda, and indicated a report encompassing the findings of the conference would be forwarded to the OTC for its meeting on June 16, 1999.
Moderator: Christophe A. G. Tulou, Christophe Tulou Associates
Speakers:
James M. Seif, Secretary, Pennsylvania Department of Environmental Protection
Michael Winka, Administrator, Office of Innovative Technology and Marketing Development, New Jersey Department of Environmental Protection
Session One focused on the experiences of two states that are implementing creative
mechanisms for adding new technologies to their environmental toolkits.
1.
James M. Seif, Pennsylvania Department of Environmental Protection
At the beginning of Secretary Seif’s career as an attorney, environmental enforcement was a "gotcha" game. In 1971, he recalled, there was no EPA and none of the permit programs we rely on today. The NPDES regulations of 1973 were typical of the evolving system: establish a standard and blow away anyone who violated it. The process was arduous, inefficient and adversarial. To comply exactly with all regulatory requirements was to lose flexibility and the ability to operate facilities as they were designed to function, Seif asserted.
More recently, environmental management systems (like ISO 14000), market approaches including the acid rain program, the Agricultural Extension Service, and novel non-point source programs are moving industry beyond compliance while allowing improved operations and efficiency.
Technologies have evolved in response to regulatory pressures, abetting a "Buck Rogers" faith in technology to save the day. Unfortunately, these technologies have not proved to be the silver bullet, Seif said. While innovative technologies, like smokestack scrubbers, dramatically reduced air emissions, the sludges they produced created a new waste disposal problem.
We must rely on technology as one of many tools, he said. We must be nimble, and be able to determine where regulation and the application of technology are appropriate. Doing so with fifty states and EPA in a complex system is tough.
Fortunately, there are a growing number of examples where government is testing new approaches. Among the examples provided by Secretary Seif were:
2. Michael
Winka, New Jersey Department of Environmental Protection
According to Michael Winka, current barriers to technology include regulations that were written to capture the bad apples. Now, regulators are writing rules to let the good apples go. One example of shifting regulatory approaches is the National Environmental Performance Partnership Program (NEPPS), instituted by EPA and the states to shift the regulatory focus from "bean-counting" to environmental results.
Mr. Winka admitted that past efforts have resulted in cleaner air – regulations have forced the technology. We are not out of the woods, he said; we still have not met the ozone standard in our part of the country.
And the prospects for technological rescue appear to be dimming: venture capital available for investment in environmental technology is dropping, resulting in less verified data, which in turn lessens investor confidence – resulting in a spiraling decline in the use of innovative environmental technologies.
Mr. Winka identified several barriers to the use of new technologies, including:
One solution to these problems, he suggested, is investment to evaluate and verify technologies. Such efforts would build confidence among venture capitalists. The State of New Jersey, through the Department of Environmental Protection, is partnering with the New Jersey Corporation for Advanced Technology (NJCAT) – a public-private, non-profit organization – to evaluate new technologies and to integrate them into permitting approval processes.
New Jersey is also a participant in the Six-State Memorandum of Understanding along with California, Massachusetts, New York, Illinois and Pennsylvania. Mr. Winka indicated these states are designing a process for reciprocal evaluation, acceptance and approval of environmental technologies. They are also developing a guidance document for use by technology developers, vendors, users and investors. The ultimate goal is a nationwide system for technology approval and deployment.
Mr. Winka emphasized that reciprocity involves providing evaluation results – based on agreed-upon testing protocols – to others. It serves to streamline, not replace the current system. It is not a "rubber stamp" of technology acceptance for all permitting programs.
A key to success for such a verification system would be a shared database to serve as a clearinghouse of evaluation data, he said.
New Jersey has also made the development and implementation of innovative technologies an integral part of its Greenhouse Gas (GHG) Action Plan – a voluntary, "no regrets" program with a goal to reduce GHG emissions 3.5% below 1990 levels by 2005. Among the technologies New Jersey hopes to inspire to achieve this goal are fuel cell and hybrid vehicles, biofuels, photovoltaics, solar hot water, cogeneration, and geothermal heating and cooling systems. Aside from GHG emissions reductions, this plan integrates a suite of energy and other resource conservation initiatives that will provide significant environmental and economic benefits.
In response to a question about how long it will take for the Six-State MOU to achieve its objectives, Mr. Winka indicated that the group is developing protocols and a database, and hopes to complete those efforts within six months. He emphasized the group’s interest in expanding the MOU to all states and all technologies.
Mr. Winka also explained that the GHG program in New Jersey was the product of much stakeholder – including industry – participation, and serves as an excellent way to connect air, water, waste and other environmental programs – with many resulting efficiencies and environmental benefits. Secretary Seif credited Bob Shinn, New Jersey DEP Commissioner, with the leadership to make it happen. He added that not all industry is supportive of efforts to reduce GHG, but given the focus on overall environmental benefit and operational efficiency in the New Jersey program, there may be incentive to participate nonetheless.
One questioner wondered what incentives states were willing to provide to facilitate the introduction of expensive new environmental technologies. Secretary Seif acknowledged that regulations will continue to push technology – perhaps less forcefully and differently than previously. He also pointed to such incentives as the Green Government Executive Order in Pennsylvania, the sustainable technologies fund associated with the electricity deregulation statute (in Pennsylvania and New Jersey), potential use of tax incentives, and environmental trust funds/State Revolving Funds which could be targeted to water and air-related issues. Even Pennsylvania’s Land Recycling Program has clean air benefits.
Mr. Winka was asked whether the NJCAT helped with credibility issues associated with environmental technologies. He replied that it did, providing a sort of "Good Housekeeping" stamp to the technologies.
In response to a request to elaborate on the permit exemption New Jersey provides for fuel cells, Mr. Winka explained that the exemption applies only under certain circumstances, for example when the fuel cell is powered by hydrogen. He mentioned that New Jersey is working with California, Massachusetts and Canada to extend the exemption to other fuel cell systems.
Secretary Seif acknowledged in response to a question that states outside the Six-State MOU may have issues with the process: situations in each state are so different that a standardized verification process may not be entirely attractive. Also, the staff effort to get up to speed may not be worthwhile. Nonetheless, he believed there were compelling overall benefits of this type of agreement.
A comment was also made that the states involved in the MOU share many similar environmental challenges and that the OTC should make an effort to reach out to states with differing circumstances – for example, overwhelmingly agricultural economies. Secretary Seif suggested the OTC may indeed wish to do that.
In response to the question of how to get permit writers to more readily accept new technologies, Secretary Seif responded there are several realistic options:
One audience member asked how to distinguish state and federal verification programs. Secretary Seif suggested the goal was to make those differences fewer and fewer – the overall goal being verification. Unfortunately, one would expect that certain states may reject certain technologies for various reasons.
Given the diversity in state needs and programs, how does one get through the process without discouraging technologies, the final questioner asked. That is the question before this conference, Secretary Seif responded, closing Session One.
Moderator: Cliff I. Davidson, Carnegie Mellon University
a) Fuel Cell
Technology
Speakers:
Status
and Future Prospects
Larry Berg, Ballard Generation Systems
Gary Mittleman, President and CEO, Plug Power
Motor Vehicles
Kelly Brown, Ford Motor Company
Session Two focused on those evolving technologies that might have a beneficial impact on
future air quality problems.
1. Larry Berg, Ballard
Generation Systems
Mr. Berg discussed some of the history of fuel cells and the rapid evolution of the Ballard company. In recent years, Ballard has attracted many partners and is developing fuel cells for stationary, mobile, portable and marine applications. In keeping with this partnership theme, Mr. Berg emphasized the need for demonstration programs in the states.
Emissions are minimal, and life cycle efficiencies are very high for fuel cell systems, he said. The company is using its experience with mobile systems – through work with Ford and DaimlerChrysler – to benefit its development of stationary systems. It hopes to have a commercial, natural gas-fueled 250 kW product available around 2002. Mr. Berg noted that its prototype has achieved 74% overall efficiency. Ballard is also developing products for the low-power market – under 10 kW capacity.
Ballard fuel cells are based on the Proton Exchange
Membrane technology that is versatile and flexible. The company has over
300 current and pending patents, according to Mr. Berg.
2. Chris Forbes,
Siemens-Westinghouse Power Corporation
Mr. Forbes described a unique fuel cell niche for his company. Siemens-Westinghouse is developing Solid Oxide fuel cell (SOFC) technology, focusing on the stationary, distributed power market. Its units will be natural gas-fueled.
The SOFCs operate at 1800o F – the highest temperature of any fuel cell technology. In tests, the cells have demonstrated high reliability, excellent shelf life, and an ability to recover from fuel sulfur "poisoning," according to Mr. Forbes. Electrical efficiency on a 100 kW demonstration unit reached 47%, and with heat utilization, efficiencies around 80% could be achieved. Combined cycle, pressurized systems could yield electrical efficiencies of 60-70%, he said.
Mr. Forbes shared his company’s plans for a 300 kW "straight" system – where customers can utilize heat cogeneration opportunities – and a 1 MW combined cycle, pressurized system. The company anticipates very low NOx, SO2 and CO2 emissions.
He suggested states can help get this technology on the street by providing moral support, demonstration opportunities, funding, education and public awareness efforts, and assistance with utilities and federal agencies.
3. Gary Mittleman, President
and CEO, Plug Power
As President and CEO of Plug Power, Mr. Mittleman described his company’s efforts to develop a dishwasher-sized unit, fueled by natural gas to provide full residential power as well as heat and hot water. The units will provide improved power reliability, no power outages, and will run for years, he said.
Mr. Mittleman said fuel cell costs are expected to run about $500-1000/kW a few years after commercialization. In contrast, conventional power costs $1000/kW with an additional distribution cost of $400/kW.
Fuel cell efficiencies compare favorably with more conventional electricity sources. He indicated that coal plants run at about 35% efficiency, while gas facilities operate at 40-60% efficiency. Line losses take away about 5-8% of that efficiency. Fuel cells operate at an electrical efficiency of about 40%, with no line losses. If heat produced by the fuel cell is captured and used, efficiencies could reach 70-90%.
According to Mr. Mittleman, the chief barrier to market penetration today is the relatively high cost of production resulting from too few units being produced. Historically, the high cost of platinum – a key fuel cell material – has restricted fuel cell use to exotic applications like spacecraft. Now, the material costs have dropped dramatically, but the lack of mass manufacturing is still keeping costs high, he said. Nonetheless, the potential market for residential fuel cells worldwide is huge.
Plug Power has partnered with General Electric to distribute its fuel cells and provide installation and servicing. The company is also working on mobile fuel cell applications.
For states to be most helpful, according to Mr. Mittleman, they would need to invest substantial dollars in the industry.
4. Kelly Brown, Ford Motor Company
Ford has invested $420 million in a joint venture with Ballard and DaimlerChrysler for the development of mobile fuel cell technology, said Mr. Brown, Director of Vehicle Environmental Engineering for the company. Ford has also joined with Mobil to explore hydrogen fuel options.
Fuel cells are also one of the technologies being investigated as part of the Partnership for a New Generation of Vehicles (PNGV), a public/private-sector program to develop higher efficiency vehicles. As part of the PNGV effort, Ford has produced its P2000 vehicle, powered by a Ballard fuel cell and fueled with hydrogen. Mr. Brown explained that well-to-wheel efficiency of the hydrogen fuel cell vehicle is about 29%, compared to 16% for the current generation of internal combustion cars, 22% for methanol-fueled fuel cell vehicles, and 21% for a fuel cell vehicle with gasoline fuel.
He mentioned a mix of benefits and negatives associated with hydrogen, methanol and gasoline as potential fuels for these cars. For example, gasoline benefits from an existing fueling infrastructure, but suffers from the need for heavy and costly on-board reformers required to convert the gasoline to hydrogen. With gasoline in the tank, some emissions will occur. Though hydrogen is absolutely "clean," it is impossible to store in sufficient quantities to provide desired range and leave room for passengers and storage, he said.
Among the challenges facing the technology are development of effective and cost-efficient on-board fuel reformers to convert methanol and gasoline into hydrogen for use by the fuel cells, slow start-up times, engine response, methanol and gasoline conversion efficiency, cost, cold-temperature performance, and fuel quality. On the positive side are high fuel efficiency, low emissions, high tech image and fuel flexibility. In addition to the challenges facing the technology, Brown indicated that consumers will likely be concerned or confused about hydrogen safety, limited refueling opportunities, unfamiliar technology and the continued attractiveness of ever-cleaner internal combustion technologies.
He also mentioned that Ford has joined Ballard, DaimlerChrysler, Texaco, Mobil and the State of California in a demonstration project to test fuel cell vehicles in "real world" conditions through 2003. Ford’s target is to commercialize the vehicles in MY 2004.
Ford is also continuing its efforts on battery-powered and hybrid electric vehicles.
How can states help? Here are a few of Mr. Brown’s suggestions:
In response to a question about the impact of residential fuel cells on the power grid, Mr. Mittleman admitted that it could be a nightmare for utilities – forced to provide peak power and obliged to buy back at low-power times. He advocated working with states to provide fuel cell users the option to disconnect from the grid and to significantly reduce or eliminate charges for disconnection.
The audience was reminded to keep in mind the length of time to reach commercialization and full use of this technology. There will be plenty of time for utilities to adjust. Even if one million residential units were sold each year, it would only equal about 7% of new generation capacity worldwide.
A question about the safety of residential fuel cells was raised. Mr. Mittleman responded that these units are as safe or safer than furnaces now in use.
Mr. Brown explained that Ford is not ruling out any fuel options for fuel cell vehicles at this point. A great deal of work is being done on several types of on-board fuel reformers to allow use of alternative fuels.
b) Geothermal Energy Sources
Speaker: Conn Abnee,
Geothermal Heat Pump Consortium
Mr. Abnee explained that geothermal heat pump systems – or GeoExchange systems – use the constant temperature in the ground and in water to condition air. They are 30% or more efficient.
The Consortium’s goals are to have 400,000 units installed per year by 2005, and to have 2 million in place by that time. That many units in operation would reduce carbon emissions by 1.5 million metric tons. Emissions of NOx and SO2 are also significantly less than more conventional energy sources, he said.
Mr. Abnee pointed to a 1993 EPA report which claimed that geothermal heat pump systems have the highest performance and lowest operating costs in heating and cooling mode among emerging residential HVAC technologies.
GeoExchange systems are in place in over 500 schools, 30 federal facilities and over 400,000 homes and businesses. According to Mr. Abnee, the potential market in all these sectors is substantial.
He said the main barrier to broader application of this technology is cost – currently running at about a $3,500 premium. The key to success will be increased public awareness.
Speaker: Dana O’Hara, U.S. Department of Energy
Mr. O’Hara’s presentation focused on getting alternative fuel and advanced technology vehicles onto the road – a broader discussion than just energy storage systems, such as batteries for electric vehicles. Mr. O’Hara pointed out there are a variety of such vehicles already available or in the works, including hybrid electric, fuel cell, battery electric, and several alternatively fueled vehicles.
With about 185 million vehicles on the road, advanced technology vehicles represent an insignificant proportion at 300-400,000, he said. Battery electric vehicles are not yet a force, with about 1,200-1,300 per year being leased.
According to Mr. O’Hara, the key barriers to getting these vehicles into the marketplace include:
Each technology has its relative strengths and weaknesses in terms of fuel efficiency, technology development, fueling infrastructure, emissions, costs, reliability and a host of other factors.
Mr. O’Hara noted that bringing viable technologies into the market will involve a host of efforts, including:
Moderator: Michael Winka, New Jersey Department of Environmental Protection
a) Connecting
Energy and Environmental Issues Through Technology
Speaker: John Hanger, Citizens for Pennsylvania’s Future
Session Three focused on new technologies that are available to help meet today’s air
quality challenges.
John Hanger, Citizens
for Pennsylvania’s Future
It is important to understand the energy industry when dealing with environmental regulation, Mr. Hanger asserted as he began his remarks. And, it is important to understand environmental needs when dealing with energy policy.
His conclusion: monopoly regulation has failed consumers. Utility rates are higher than they need to be; consumers have paid for bad decisions. Under the monopoly system, he claimed, the rate of technological improvement has been slow, with resulting negative impacts on the environment. There has been no incentive to innovate – any benefits and cost reductions have gone to the customers, not to the utility; therefore, there has been no profit motive. Distributed power generation has often been resisted. He suggested that legal barriers to distributed generation be identified and repealed.
According to Mr. Hanger, power generators, with weak incentives to operate efficiently, have operated at about a 33% efficiency for the past 40 years even though technologies enabling 60-80% efficiencies are now available. As a result, CO2 emissions are high, and reduction of other emissions has been slowed. He said energy efficiency standards should be set for all power plants. States should also establish output-based emissions standards for power plants, which will provide efficiency incentives as well as environmental benefits.
Competition alone, he claims, will increase efficiencies and increase the diffusion of new technologies. The "myth" of the natural monopoly in the utility industry, prevalent in the 1970s and 1980s with the construction of huge and very expensive 1000 MW plants, has been undercut by the experiences in the 1990s with the deregulated wholesale electricity market. Under the competitive wholesale market, the optimal plant size has been in the more affordable 200 MW and smaller range. This experience was one of the drivers for deregulation at the retail level.
Deregulation policies in Pennsylvania allow utilities to recover stranded costs – the so-called competitive transition charges. These costs are applied even to distributed generators, and according to Mr. Hanger, are a significant barrier to the introduction of new technology, and should be limited to the maximum extent possible.
Under a monopoly, customers do not particularly care where their electricity is coming from. However, customer knowledge of the linkages between environment and energy in a deregulated environment can create a competitive advantage for more efficient and renewable energy resources, he said.
In Mr. Hanger’s view, government can help this transition by:
b) On-Site Power Generation
Speakers:
John Trocciola, ONSI
Marc Roper, AstroPower
According to Mr. Trocciola, fuel cells are not right around the corner. In fact, while the products are ready, because of deregulation, there are not a whole lot of them out there, Mr. Trocciola asserted.
Admittedly, the technology is promising with electrical efficiencies around 40% and overall efficiencies up to 80% with heat reuse. Emissions are very low. Yet, with all these benefits, Mr. Trocciola indicated that ONSI is selling only about 25 of its 250 kW units per year.
What are the problems? According to Mr. Trocciola they include:
What are some of the incentives that would help get fuel cell technology into the market? Among the possibilities he mentioned are:
The major problems facing the industry today, he claims, are low volume sales and resulting high costs of production. Government can help by removing power-grid interconnection and exit barriers created by electricity deregulation transition policies and by providing appropriate incentives.
Mr. Roper began his presentation with a brief description of how photovoltaic (PV) systems work. This technology utilizes solid-state materials that turn light into electricity, he said. It has no moving parts and is, therefore, very reliable. The industry is in the early stages of commercialization, and costs are dropping rapidly. The PV industry has about a 180 MW capacity today, and has produced about 500 MW of capacity since its inception, roughly equivalent to one conventional power plant.
Today’s market is characterized by customer-sited PV systems connected to the grid. The industry intends to provide grid support in the near future, starting with areas of overload and eventually providing peaking power.
He mentioned the following advantages of customer-sited, grid-connected systems:
The PV industry is targeting a cost of about $2-3/watt, which Mr. Roper asserts should open great market opportunities. The current cost is running about $6/watt; in 1993, the cost was $10/watt.
According to Mr. Roper, some of the barriers facing the PV industry include:
Mr. Roper pointed to some ways that state policies could promote the introduction of PV technology. Among his suggestions were:
Among the criteria he suggests government should use for developing policies are the following:
In reference to a question about the effectiveness of output-based standards for power generators, Mr. Hanger indicated they would not only help reduce emissions, but would also push more efficient technologies such as combined heat and power plants.
Mr. Trocciola concluded the question and answer session with the admission that deregulation efforts, so far, have hurt the stationary fuel cell market. Cost is a more important consideration in the more open market, which hurts fuel cells and other new technologies right now. Without assistance, these new technologies will not survive.
[Editor’s note: Mr. Trocciolo and Mr. Hanger differed in their assessment of the benefits of a deregulated electricity market on the introduction of new technologies, such as fuel cell power units. Mr. Hanger said that deregulation should help promote the development and application of innovative technologies, although he noted that transition policies such as stranded cost recovery were, at least temporarily, an impediment to new technology.]
c) Green Architecture
Speaker:
3
We need to focus on the next generation to make its members better consumers. With that introduction, Ms. Flora began her discussion of the variety of ways to make buildings more efficient and environmentally friendly. In order to do so, we must include and pay all costs associated with our building choices.
Ms. Flora described a broad scope of activities for injecting "green" concepts into building – planning and design, materials and construction, operations and maintenance, site considerations, as well as community and regional issues.
Planning and design should be geared to make the building shell energy- and resource-efficient, she said. For example, artificial lighting accounts for 40-50% of a typical building’s energy costs. She suggests that architects and builders use the most efficient systems, materials and layouts, and maximize the use of natural assets such as daylight and ventilation. And, build for the long-term – 100 years as opposed to 20 years, and create space that can adapt to market changes.
According to Ms. Flora, EPA estimates that health costs associated with indoor air pollution run about $150 million per day, resulting in $15 billion of lost productivity per year. For this reason, low-volatile organic compound (VOC) materials with high recycled content should be used. Existing buildings and materials should be reused, and on-site construction waste should be reused and recycled.
She also indicated that poorly designed and built buildings waste an estimated $42 billion of energy annually. The use of energy-efficient, properly sized mechanical systems would offset these losses. Green purchasing and maintenance practices coupled with the use of non-toxic cleaners would yield additional environmental and health benefits.
Preserving on-site trees and other plants and orienting the building to maximize sunlight, ventilation and aesthetic values could provide other savings, she asserted. Trees, for example, can reduce residential energy costs by 20-25%. Minimizing non-pervious surfaces would reduce non-point water pollution.
Ms. Flora noted that community benefits could be maximized by encouraging mixed-use development and shared parking. New development should also be located close to existing infrastructure. By educating the community and empowering citizens, decision-makers would be more likely to make appropriate land use decisions.
She indicated that benefits can be expanded regionally by encouraging the use of workers and businesses that implement green principles, providing incentives to reuse previously developed land, and by recognizing the impact of uncontrolled growth.
The Green Building Alliance pursues these objectives through:
Ms. Flora then pointed to the benefits of green building, which include:
d) Landfill Methane Recovery
Speaker: Mike McGuigan, SCS Engineers
Mr. McGuigan noted that landfill gas is comprised of 40-60% methane, 30-50% CO2, less than 1% O2 and a trace of VOCs. This gas is produced over a 10- to 20-year period in a landfill and is explosive, can migrate offsite, and can cause fires and odors if not contained. He also pointed out that methane is a potent greenhouse gas, with a 21:1 greenhouse gas potential.
On the other hand, he lauded landfill gas as an energy resource. Landfills are the number one manmade source of methane in the U.S., and over 270 landfill gas recovery projects are in place – 83 in OTC states. According to Mr. McGuigan, the average project eliminates the emission of over 200,000 tons per year of CO2 greenhouse equivalent. The technology is proven, and the market is still large; there are at least 80 more potential landfill gas recovery options in OTC states. Growth in the industry to date was largely attributable to §29 tax credits that expired last year. Unless more incentives are established, he predicts the market will plateau.
Some landfill gas is directed to flares where it is destroyed at 98-99% efficiency. About 70% of the landfill gas utilization projects use gas for power generation and 25% is sold as a boiler fuel directly to users such as power plants and kilns at pipeline distances up to eight miles from the landfill, says Mr. McGuigan. There are about 650 MW of landfill gas-powered capacity on line with individual plants ranging from 500 kW up to 50 MW. At a cost of $800-1200/MW, incentives such as tax credits are necessary to make landfill gas competitive.
Mr. McGuigan also pointed out that the industry is exploring other uses for the gas, including vehicle fuel, fuel for fuel cells, and greenhouse applications. In order to meet existing and potential demand, landfill gas quality must be assured, and technologies are being explored to separate out CO2 and other undesirable components.
Landfill gas utilization projects could represent about 7% of the U.S. greenhouse gas reduction target under the Kyoto agreement. According to Mr. McGuigan, landfill gas projects now in place represent about 2.6% of the target reduction.
Some of the potential incentives for landfill gas recovery he identified include:
Regulatory barriers include the application of New Source Performance Standards to the use of landfill gas in electrical generation. There are also permitting problems associated with the trade-off between VOC reductions and NOx increases associated with landfill gas use. In response to these and other problems faced by the industry, Mr. McGuigan suggested the following possible OTC actions:
E. Session Four
Moderator: Jim Seif, Pennsylvania Department of Environmental Protection
Speakers:
Marian Chertow, School of Forestry and Environmental Studies, Yale University
David Berg, U.S. Department of Energy
Penny Hansen, EPA Environmental Technology Verification Program
Praveen Amar, NESCAUM
Geoff Keith, MJ Bradley & Associates
Session Four focused on those actions states could take to enhance the development and
introduction of promising clean air technologies.
1.
Marian Chertow, School of Forestry and Environmental Studies, Yale University
"The private sector is the most important actor in technology innovation," Ms. Chertow declared to kick off the final session of the conference.
The old rules for government regulators were to point fingers and find the "bad" guy, she added. The new rules call for partners and solutions.
In the private sector, the motto is "innovate or die." Getting new products into the market was the key issue. On the other hand, she noted, government was slow and cautious, especially with new technologies. The motto seemed to be: "innovate and die"!
Among the barriers Ms. Chertow sees to technology introduction are:
Nonetheless, she sees positive developments, including moves toward:
Ms. Chertow finished by urging the adoption of industrial ecology as a management principle, focusing not on specific environmental media, but on the entire system in which technology will work.
2. David Berg, U.S. Department of
Energy
According to Mr. Berg, the market for environmental technology has been hampered by the prevailing view that the environment is a free good. It has been further compromised by over-reliance on command-and-control regulations as a technology driver. Technology is an after-thought at best, he claimed. Environmental and business decisions have been decoupled. As a result, environmental costs are higher than necessary, and U.S. competitiveness is hampered.
The timelines for investment, technology development and regulatory action are completely out of synch with one another, he asserts. The regulatory timeline is long and unpredictable, and is a significant disincentive for technology investment. Lengthy and unpredictable permitting processes create a level of risk few technology developers can tolerate. As a result, most innovative technologies are lost in this "Valley of Death," thus locking in old technologies by eliminating incentives to produce better ones.
The results of this broken system, he said, have been failure of the U.S. to meet many environmental goals, job drain, loss of innovation and a weakened environmental industry.
His proposed solutions?
3.
Penny Hansen, EPA Environmental Technology Verification Program
Ms. Hansen began by noting that the basic aim of the Environmental Technology Verification program at EPA is to make basic information available to the market and key decision-makers. As Director of the program, her aspirations are to:
The role of states in this process is critical. EPA is looking for suggestions to improve the program, she added.
A key barrier to new environmental technologies is the lack of cost and environmental performance information, according to Mr. Amar. Typically, estimated costs for environmental pollution control are substantially higher than is realized in practice. Among the reasons: a general tendency to make overly conservative estimates, market competition, technological innovation, market-based approaches, and regulatory trends against mandating specific technologies.
Unfortunately, he asserted, cost overestimates have resulted in lower environmental protection than is reasonably affordable. Some examples of technology cost overestimates include reformulated gasoline, low-emission vehicles (LEV), SO2 reductions as part of the acid rain program, and NOx controls.
Case studies on operating experience and technology costs would allow a careful review of the history of technology use and educate future projections. Mr. Amar also suggested that standardized methods, clearly distinguishing between operating and capital costs, should be developed to estimate costs in order to allow fair comparisons.
Reliable information will lead to good projections and good decisions, he concluded.
5. Geoff Keith, MJ Bradley
& Associates
Mr. Keith reinforced the message that there is a great need for collaboration between energy and environmental regulators. He indicated that a comprehensive energy policy in a deregulated electricity market should, and most likely will, include all or most of the following elements:
A model environmental policy, on the other hand, would include the following provisions:
In response to questions, Session Four speakers emphasized many of the points they made in their remarks, including the need to establish criteria, standards and protocols for verification, develop a single resting place for standardized and regularly updated information, increase data availability, and promote market approaches.
Mr. Keith and Ms. Hansen suggested that states should look for and eliminate regulatory and common-practice impediments to the use of good technologies.
Mr. Amar also introduced the need for risk-sharing to promote the development and introduction of new technologies.
The value of demonstration and pilot projects was re-emphasized by several of the speakers with special mention of the need to involve the right players and to get government involved earlier to ensure success. To further enhance success, government agencies must make significant resource and staff commitments.
Conference speakers and the audience provided a wealth of information on the status and trends of several technologies that could play a significant role in reducing emissions of harmful air pollutants. These participants also shared their successes and frustrations in moving good ideas from creative minds to fruitful applications. The OTC will consider this report, particularly the recommendations for smoothing the way for promising clean air technologies. From that consideration will flow actions to help ensure that efforts to reduce regional air pollution problems are aided by the best available and conceivable technology.
VI. Barriers and Recommendations
Below is a compilation of barriers identified and recommendations made by speakers and audience members during the course of the Clean Air Technologies 2000 conference.
Barriers |
Recommendations |
| A. Institutional/Regulatory -- Environmental | |
| Permit-writer inexperience with technologies – risk-averse | Evaluate and verify technologies;
integrate them into permitting approval processes. Develop a nationwide/international system for technology approval and deployment, with a clearinghouse of evaluation data. Partner on demonstrations and pilot projects |
| Lack of incentives to exceed minimum environmental requirements | Appropriately employ regulations to push technology. Promote credit/allowance trading. Employ market-driven regulatory approaches. Develop performance-based regulations. |
| Permitting is long, slow, detailed and different in each state | Evaluate and verify technologies; integrate them into permitting approval processes. Keep program participation simple. Ensure uniformity. Involve industry in the formulation of the policies. Make long-term commitments. Employ market-driven regulatory approaches. Develop performance-based regulations. |
| New environmental management philosophies and processes have not taken root. The transition from the first generation of environmental management will be slow. | Establish output-based emissions standards for power plants. Promote credit/allowance trading. Employ market-driven regulatory approaches. Develop performance-based regulations. Organize on the basis of industrial ecology (an integrated, systems approach). |
| Too little time for technology testing and implementation | Evaluate and verify technologies. Develop a nationwide/international system for technology approval and deployment with a clearinghouse of evaluation data. Partner on demonstrations and pilot projects. |
| Lack of credible data and acceptance of new technologies | Evaluate and verify technologies. Develop a nationwide/international system for technology approval and deployment with a clearinghouse of evaluation data. Partner on demonstrations and pilot projects. |
| Institutional barriers such as permits, fire marshal requirements and building codes | Keep program participation simple. Ensure uniformity. Involve industry in the formulation of the policies. Make long-term commitments. |
| New Source Performance Standards | Treat landfills as essential public services, thus reducing offsets required for projects. Only require offsets geared to emissions levels from landfill flares. Include a revised New Source Review that uses a "potential to emit" standard rather than a heat-input trigger which needlessly captures non-polluting fuel cell units. |
| Permitting problems associated with the trade-off between VOC reductions and NOx increases with landfill gas use | Treat landfills as essential public services, thus reducing offsets required for projects. Allow inter-pollutant trading. Only require offsets geared to emissions levels from landfill flares. |
| Technology standards and pollution limits lock in old technologies | Establish output-based emissions standards for power plants. Promote credit/allowance trading programs. Develop performance-based regulations. Organize on the basis of industrial ecology (an integrated, systems approach). |
| B. Energy Policy/Regulatory | |
| No incentive to innovate. Slow technology growth | Set energy efficiency standards for all power plants. Establish output-based emissions standards for power plants. Deregulate electricity markets to increase efficiencies and increase the diffusion of new technologies. Require agencies to buy a certain percentage (perhaps 5%) of their electricity from green-electricity providers. Set appropriate portfolio standards requiring use of clean renewable energy sources. Permit electrical transmission companies to use fuel cell units to provide power in lieu of more expensive upgrades to transmission infrastructure. Allow net metering for small generators. Promote credit/allowance trading programs. Develop performance-based regulations. Share risks between the private and public sectors to promote new environmental technology. |
| No profit motive | Deregulate the retail electricity market. Promote credit/allowance trading programs. |
| Onerous/tedious grid connection processes | Develop uniform connection policies to reduce delays and costs that inhibit distributed power generators. |
| Exit fees/stranded costs | Significantly reduce or eliminate exit fees for innovative, environmentally protective distributed power generators. |
| Backup charges | Assess standard, fair and consistent backup charges. Significantly reduce or eliminate these charges for innovative, low-polluting, renewable distributed generators. |
| C. Financial/Market | |
| High cost of new technology | Establish sustainable technology funds. Set up environmental trust funds. Provide research and development grants and other direct financial support. |
| Lack of incentives and subsidies | Establish sustainable technology funds. Set up environmental trust funds. Provide dedicated HOV lanes and preferred parking for advanced technology/very low emissions vehicles. Require government agencies to lead by example by buying and using green products. Share risks between the private and public sectors to promote new environmental technology. |
| High cost of financing | Provide low- or no-interest loans. Provide research and development grants and other direct financial support. Establish sustainable technology funds. |
| Taxes | Enact sales and property tax exemptions. Expand §45 wind tax credits to include landfill gas. |
| Lack of cost and environmental performance information | Partner on demonstrations and pilot projects. Conduct case studies on operating experience and technology costs using standardized methods. |
| Cost overestimates have resulted in lower environmental protection than is reasonably affordable | Conduct case studies on operating experience and technology costs using standardized methods. |
| Declining levels of venture capital investment in environmental technology | Evaluate and verify technologies. Develop a nationwide/international system for technology approval and deployment with a clearinghouse of evaluation data. Partner on demonstrations and pilot projects. Provide for quality assurance. Share risks between the private and public sectors to promote new environmental technology. |
| D. Technical | |
| Technology – will it work? | Partner on demonstrations and pilot projects |
| Lack of trained installers/maintenance experts | Institute training and certification programs. License trained experts. Provide technical assistance – facilitate implementation of good technologies and processes. |
| E. Cultural/Public Acceptance | |
| Public concern about new technology | Get the public comfortable with
the technology through public awareness. Get all the players on the podium together (partnerships) to give comfort to potential buyers. Help with citizen education. Provide for quality assurance. Focus on the next generation to make its members better consumers. |
| Lack of user information | Develop a nationwide/international system for technology approval and deployment with a clearinghouse of evaluation data. Partner on demonstrations and pilot projects. Help with citizen education. Focus on the next generation to make its members better consumers. Provide technical assistance – facilitate implementation of good technologies and processes. |
| Restrictive codes and covenants | Eliminate restrictive codes and covenants. |
| F. Other Barriers/Recommendations | |
| Compile an inventory of regulatory requirements that inhibit green technology and take appropriate remedial action. Include in this effort the full complement of agencies whose regulations affect technology. Include other states – as appropriate – in whatever initiatives the OTC undertakes. |