1. The document discusses how emergency backup generators can participate in demand response programs to generate income while providing grid reliability. 2. It outlines the applicable air regulations for emergency generators and explains how generators can meet emission requirements to participate in demand response legally. 3. Recent court rulings have removed exemptions that allowed emergency generators to participate in demand response while still being classified as emergency, so generators may need to meet non-emergency emission standards to participate.

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. Emergency Backup Engines
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20152

3. Backup Engines and Sustainability
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 20153

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. 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. 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. 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. 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. 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. 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. Engine Subcategories
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201511

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Colorado Interruptible Service
Option Credit (ISOC)
• ISOC Program Event History:
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201522

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. 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. Rollercoaster of Engine Regulations
Generating Cash From Your Backup Generator - I2SL Conference, Session F3, September 22, 201525

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. 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. 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. 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