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Generating Cash From Your
Backup Generator
I2SL 2015 Conference
September 22, 2015
Sergio A...
Emergency Backup Engines
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20152
Backup Engines and Sustainability
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, ...
Outline
1. Emergency backup generators and applicable
air regulations.
2. Lucrative way to be socially and
environmentally...
Emergency Backup Generators
and Applicable Air Regulations
Generating Cash From Your Backup Generator - I2SL Conference, S...
General Requirements
• Emergency engines have less strict emission
requirements than non-emergency ones.
• State and/or lo...
Emergency Engine Compliance
Existing engine:
• Change oil/filter & inspect hoses/ belts every 500 hours or annually;
inspe...
Engine Air Regulations
• National Emission Standards for Hazardous Air
Pollutants (NESHAP) for Stationary Reciprocating
In...
Overview of RICE NESHAP & NSPS
• RICE NESHAP regulates HAP emissions from stationary RICE at
both major and area sources o...
RICE NESHAP
• Public comment submitted in response to RICE NESHAP:
“40 CFR Part 63 Subpart ZZZZ . . . is the most complica...
Engine Subcategories
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201511
Useful Definitions in RICE NESHAP
• Regulates HAP emissions from stationary RICE
at both major and area sources of HAP
– M...
Useful Definitions in RICE NESHAP
• Emergency Engine:
“. . . operated to provide electrical power or mechanical work
durin...
Useful Definitions in RICE NESHAP
Engines >500 Horsepower (HP) at major source of HAP:
• Existing engines if constructed b...
Emergency Engine Operational
Limitations
• Unlimited use for emergencies (e.g., power outage, fire, flood)
• 100 hr/yr for...
Lucrative Way to be Socially and
Environmentally Responsible
• Make your engine work for you
• Help provide grid reliabili...
What are Demand Response
Programs?
• Demand response (DR) programs are designed to
reduce electricity demand when power re...
Why DR Programs?
• Provide grid reliability when supply is compromised
by:
– Higher demand for electricity, or
– Storms or...
Why Diesel-Powered Emergency
Generators?
• According to EPA, there are about 1.5 million
stationary engines in the US and ...
DR Programs for Backup Generators
• Program are organized through power company to
provides businesses significant saving ...
DR Programs for Backup Generators
• Usually need at least 300kW of interruptible
demand.
• Options to limit interruptions ...
Colorado Interruptible Service
Option Credit (ISOC)
• ISOC Program Event History:
Generating Cash From Your Backup Generat...
Engine Emissions of Concern
• Mainly NOx and VOC emissions (ozone
precursors).
• High ozone tends to also occur during
hot...
Use of Backup Engines during DR
Events
• On July 22, 2011, PJM 7-hour
event backup diesel
generator participation
emission...
Rollercoaster of Engine Regulations
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22...
New Developments
• On May 1, 2015 the US Court of Appeals for
the DC Circuit remanded the 100-hour
“exemption” for Recipro...
Consequence of Court Ruling
• Emergency engines are not “emergency” if
participating in DR Programs.
• Make sure emergency...
Summary
1. All engines need permits.
2. Emergency engines can help
stabilize grid, save money
and protect environment.
3. ...
Sergio A. Guerra, PhD
sguerra@cppwind.com
Direct: + 970 360 6020
CPP, Inc.
2400 Midpoint Drive, Suite 190
Fort Collins, CO...
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Generating Cash From Your Backup Generator

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Diesel backup generators are commonly installed in hospitals, data centers, universities, hotels, and other businesses for use in the event of power disruptions. These engines have quick response times that provide an unmatched reliable source of emergency backup power. Facilities that have these backup engines can also benefit from enrolling in demand response (DR) programs that offer economic incentives to participants who volunteer the use of their backup generators to supply electricity to the grid during certain periods of high electricity demand. In recent years, there has been an increase in the number of backup engines that have enrolled in DR programs in exchange for economic incentives. DR programs provide grid reliability, especially during periods of high electricity demand. Therefore, this is a win-win situation for backup engine owners and power utility companies offering these incentives. Generally, a backup generator with a capacity of 500 kilowatt (kW) or more is necessary to participate in DR programs. Participants in these DR programs agree with the local power company to use their backup engines when directed; usually during periods of peak electricity demand or power disruption. However, recent air quality regulations that apply to backup generators can be challenging to meet when participating in a DR program. That is the case because the applicable requirements for backup engine depend on whether the use is strictly for emergency purposes or for DR (considered non-emergency). Purely emergency use engines are subject to work practice standards while non-emergency engines are subject to emission limits that may require emission controls. Additionally, non-emergency engines may be subject to dispersion modeling requirements to show compliance with the national ambient air quality standards (NAAQS). At the moment the dispersion model used in permitting evaluations is extremely conservative and can show compliance issues. In conclusion, DR programs can be a profitable way to get additional cash for owners and operators of backup engines. However, the permitting implications should be considered thoroughly before enrolling in such a program to avoid any unintended adverse consequences.

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Generating Cash From Your Backup Generator

  1. 1. www.cppwind.comwww.cppwind.com Generating Cash From Your Backup Generator I2SL 2015 Conference September 22, 2015 Sergio A. Guerra, Ph.D. – CPP Inc.
  2. 2. Emergency Backup Engines Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20152
  3. 3. Backup Engines and Sustainability Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20153
  4. 4. Outline 1. Emergency backup generators and applicable air regulations. 2. Lucrative way to be socially and environmentally responsible. 3. Rollercoaster of Engine Regulations. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20154
  5. 5. Emergency Backup Generators and Applicable Air Regulations Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20155 Does it need a permit?
  6. 6. General Requirements • Emergency engines have less strict emission requirements than non-emergency ones. • State and/or local agencies may have more stringent requirements. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20156
  7. 7. Emergency Engine Compliance Existing engine: • Change oil/filter & inspect hoses/ belts every 500 hours or annually; inspect air cleaner (CI) or spark plugs (SI) every 1,000 hours or annually – May use oil analysis program • Operate/maintain per manufacturer’s instructions or owner-developed maintenance plan • Minimize startup/idle • Non-resettable hour meter • Records of hours of operation and maintenance • Initial notifications NOT required New engine: • Meet Stationary Engine NSPS – part 60 subpart IIII if CI; part 60 subpart JJJJ if SI Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20157
  8. 8. Engine Air Regulations • National Emission Standards for Hazardous Air Pollutants (NESHAP) for Stationary Reciprocating Internal Combustion Engines (RICE) – 40 CFR part 63 subpart ZZZZ • New Source Performance Standards (NSPS) for Stationary Compression Ignition (CI) Internal Combustion Engines (ICE) – 40 CFR part 60 subpart IIII • NSPS for Stationary Spark Ignition (SI) ICE – 40 CFR part 60 subpart JJJJ Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20158
  9. 9. Overview of RICE NESHAP & NSPS • RICE NESHAP regulates HAP emissions from stationary RICE at both major and area sources of HAP. – All sizes of CI and SI engines are covered, – Both new & existing RICE are covered, – Defers to NSPS for certain engines. • RICE NSPS standards regulate new, modified, and reconstructed sources, not existing; control is for criteria pollutants. • NSPS covers different types of RICE beginning in 2005. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20159
  10. 10. RICE NESHAP • Public comment submitted in response to RICE NESHAP: “40 CFR Part 63 Subpart ZZZZ . . . is the most complicated and confusing regulation in the entire suite of EPA NSPS and NESHAPS regulations, bar none. We seriously believe that a viable defense could be mounted against an EPA enforcement action with the simple but true statement: 'Your honor, we honestly could not discern our obligation under the rule in a timely manner.” • EPA’s navigation tools: http://www.epa.gov/ttn/atw/rice/output/quiz.html • http://www.epa.gov/region1/rice/ Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201510
  11. 11. Engine Subcategories Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201511
  12. 12. Useful Definitions in RICE NESHAP • Regulates HAP emissions from stationary RICE at both major and area sources of HAP – Major Source: ≥10 tons/year single HAP or ≥25 tons/year of combined HAP. – Area Source: not major. • Type of Engine: – Compressor Ignition(CI): Diesel. – Spark Ignition (SI): gasoline, landfill gas, natural gas, propane). Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201512
  13. 13. Useful Definitions in RICE NESHAP • Emergency Engine: “. . . operated to provide electrical power or mechanical work during an emergency situation. Examples include stationary RICE used to produce power for critical networks or equipment . . .when electric power from the local utility . . . is interrupted, or stationary RICE used to pump water in the case of fire or flood, etc.” • Commenced construction date: when owner/operator has entered a contractual obligation. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201513
  14. 14. Useful Definitions in RICE NESHAP Engines >500 Horsepower (HP) at major source of HAP: • Existing engines if constructed before December 19, 2002 • New engines if constructed on or after December 19, 2002 Engines ≤500 HP located at major source of HAP and engines of all horsepower located at an area source of HAP: • Existing engines if constructed before June 12, 2006 • New engines if constructed on or after June 12, 2006 Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201514
  15. 15. Emergency Engine Operational Limitations • Unlimited use for emergencies (e.g., power outage, fire, flood) • 100 hr/yr for: – maintenance/testing – emergency demand response (EDR) when Energy Emergency Alert Level 2 has been declared by Reliability Coordinator – voltage or frequency deviates by 5% or more below standard • 50 hr/yr of the 100 hr/yr allocation can be used for: – non-emergency situations if no financial arrangement – local reliability as part of a financial arrangement with another entity if: • existing RICE at area source • engine is dispatched by local transmission/distribution system operator • dispatch intended to mitigate local transmission and/or distribution limitations so as to avert potential voltage collapse or line overloads • dispatch follows reliability, emergency operation, or similar protocols that follow specific NERC, regional, state, public utility commission, or local standards or guidelines • power provided only to facility or to support local distribution system • owner/operator identifies and records dispatch and standard that is being followed – peak shaving in local system operator program until May 3, 2014 if existing RICE at area source Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201515
  16. 16. Lucrative Way to be Socially and Environmentally Responsible • Make your engine work for you • Help provide grid reliability • Protecting Environment Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201516
  17. 17. What are Demand Response Programs? • Demand response (DR) programs are designed to reduce electricity demand when power reliability or capacity is compromised. • DR programs can also include economic demand response triggered when electricity prices are high. • DR programs include: – Reducing electricity use, – Relying on alternative fuel capabilities, – Tapping into on-site generation (i.e., emergency diesel engine[s]) Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201517
  18. 18. Why DR Programs? • Provide grid reliability when supply is compromised by: – Higher demand for electricity, or – Storms or natural disasters. • Alternative supply to replace power generated by retired power plants (i.e., older coal plants). • Scarcity of new power generation facilities due to an expensive and lengthy process. • Participants receive economic incentives. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201518
  19. 19. Why Diesel-Powered Emergency Generators? • According to EPA, there are about 1.5 million stationary engines in the US and about 900,000 of these are used for emergency power generation. • Present in laboratories, hospitals, data centers, universities, hotels, and other businesses. • Reliable and underutilized equipment. • Quick response time: within 10 s. of power failure. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201519
  20. 20. DR Programs for Backup Generators • Program are organized through power company to provides businesses significant saving opportunities. • Businesses can participate in these programs to help meet electric requirements at critical times. • Participants receive monthly credit based on: – Load that agree to control – Number of hours – 1-hour or 10-minute notice – Winter or summer. • Based on a per kW monthly credit. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201520
  21. 21. DR Programs for Backup Generators • Usually need at least 300kW of interruptible demand. • Options to limit interruptions to maximum of 4 hours in a 24-hour period. • During an interruption period, need to reduce your electricity use down to the firm demand chosen in your program agreement. • Interruption events are triggered as a result of capacity, contingency and/or economic constraints. • Economic interruptions are the only interruptions that offer a buy-through option. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201521
  22. 22. Colorado Interruptible Service Option Credit (ISOC) • ISOC Program Event History: Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201522
  23. 23. Engine Emissions of Concern • Mainly NOx and VOC emissions (ozone precursors). • High ozone tends to also occur during hot/sunny days. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201523
  24. 24. Use of Backup Engines during DR Events • On July 22, 2011, PJM 7-hour event backup diesel generator participation emission estimates of – 109 tons of NOx in the region – 3 tons of PM in the region • For the region, July 21 and July 22 also coincided with the highest ozone readings that month. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201524
  25. 25. Rollercoaster of Engine Regulations Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201525
  26. 26. New Developments • On May 1, 2015 the US Court of Appeals for the DC Circuit remanded the 100-hour “exemption” for Reciprocating Internal Combustion Engines (RICE). • This exemption allowed owners/operators of an emergency RICE to provide backup power for DR Programs while still being classified as an emergency engine under rule. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201526
  27. 27. Consequence of Court Ruling • Emergency engines are not “emergency” if participating in DR Programs. • Make sure emergency engines meet non- emergency standards. • Tier IV Engines may already meet these regulations. • Court rulings is not settled. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201527
  28. 28. Summary 1. All engines need permits. 2. Emergency engines can help stabilize grid, save money and protect environment. 3. Regulations are ever changing, get proper advise to get your permit or before enrolling in DR programs. Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201528
  29. 29. Sergio A. Guerra, PhD sguerra@cppwind.com Direct: + 970 360 6020 CPP, Inc. 2400 Midpoint Drive, Suite 190 Fort Collins, CO 80525 + 970 221 3371 @SergioAGuerra Thank You! www.cppwind.com

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