15

- i CHAPTER 15. EMISSIONS ANALYSIS

TABLE OF CONTENTS

15.1 INTRODUCTION

................................ ................................ ................................ ......... 15

- 1 15.2 AIR EMISSIONS DESCRI PTIONS AND REGULATIO N

................................ ......... 15

- 1 15.2.1 Carbon Dioxide

................................ ................................ ................................ .............. 15

- 1 15.2.2 S ulfur Dioxide

................................ ................................ ................................ ................ 15

- 2 15.2.3 Nitrogen Oxides

................................ ................................ ................................ ............. 15

- 2 15.2.4 Mercury

................................ ................................ ................................ .......................... 15

- 3 15.2.5 Particula te Matter

................................ ................................ ................................ ........... 15

- 315

- 1 CHAPTER 15. EMISSIONS ANALYSIS

15.1 INTRODUCTION
The U.S. Department of Energy (DOE) will conduct an emissions analysis as part of the notice of proposed rulemaking for furnace fans . To assess the impacts of proposed energy conservation standards on certain environmental indicators, DOE will use a varian t of the Energy Information Administration (EIA)’s National Energy Modeling System (NEMS). a EIA uses NEMS to produce the Annual Energy Outlook (AEO)

. 1 DOE will use a variant known as NEMS

BT to provide key inputs to the analysis, based on the latest version of the Annual Energy Outlook

.

In the emissions analysis, DOE us es NEMS

- BT to estimate the reduction in power sector emissions of carbon dioxide (CO 2 ), nitrogen oxides (NO X ), and mercury (Hg) that may result from new energy conservation standards for furnace fans . NEMS

- BT is run similarly to the AEO NEMS, except that furnace fan energy use is reduced by the amount of energy saved (by fuel type) due to each considered standard level. The inputs of national energy savings come from the NIA spreadsheet model, while the output is the forecasted physical emissions. The net benefit of each considered standard level is the difference between the forecasted em issions estimated by NEMS

- BT at that level and the AEO

15.2 AIR EMISSIONS DESCRIPTIONS AND REG ULATION Reference Case. DOE conduct s the emissions analysis as a policy deviation from the most recent AEO
, which is likely to be AEO 2012

. The results of the emissions analysis include changes in NO X , mercury, and CO 2 emissions in 5

- year forecasted increments for each trial standard level.

Below are descriptions of the air emissions that DOE will consider in the emissions analysis , and the regulations that affec t these emissions. Each version of NEMS

- BT reflects the estimated impacts of all regulations that had been promulgated by a specific date

.

15.2.1 Carbon Dioxide
In the absence of any Federal emissions control regulation of power plant emissions of CO 2 , a DOE stan dard is likely to result in reductions of these emissions. The CO 2 emission reductions likely to result from a standard will be estimated using NEMS

- BT and national energy savings estimates drawn from the NIA spreadsheet model. The net benefit of the stand ard is the

a For more information on NEMS, refer to the U.S. Department of Energy, Energy Information Administration documentation. A useful summary is National Energy Modeling System: An Overview 2003 , DOE/EIA

- 0581(2003). March 2003. EIA approves use of the name NEMS only to describe an official version of the model without any modification to code or data. Because this analysis entails some minor code modifications, and the model is run under policy scenarios that are vari ations on EIA assumptions, DOE refers to the model as NEMS

- BT (BT is DOE’s Building Technologies Program). NEMS

- BT was previously called NEMS

- BRS.15

- 2 difference between emissions estimated by NEMS

- BT at each standard level considered and the AEO Reference Case. NEMS

- BT tracks CO 2 emissions using a detailed module that provides results with broad coverage of all sectors and inclusion of intera ctive effects.

15.2.2 Sulfur Dioxide

SO 2 emissions from affected electric generating units (EGUs) are subject to nationwide and regional emissions cap and trading programs, and DOE has preliminarily determined that these programs create uncertainty about the pote ntial standards’ impact on SO 2 emissions. Title IV of the Clean Air Act sets an annual emissions cap on SO 2 for affected EGUs in the 48 contiguous states and the District of Columbia (D.C.). SO 2 emissions from 28 eastern states and D.C. were also limited under the Clean Air Interstate Rule (CAIR, 70 Fed. Reg. 25162 (May 12, 2005)), which created an allowance

- based trading program. Although CAIR has been remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Ci rcuit), see North Carolina v. EPA , 550 F.3d 1176 (D.C. Cir. 2008), it remains in effect temporarily, consistent with the D.C. Circuit’s earlier opinion in North Carolina v. EPA , 531 F.3d 896 (D.C. Cir. 2008). O n July 6, 2011, EPA promulgated a replacement for C AIR, entitled “ Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals,” but commonly referred to as the Cross

- State Air Pollution Rule or the Transport Rule. 76 FR 48208 (Aug. 8, 2011)

. On December 30, 2011, however, the D.C. Circuit stay ed the new rules while a panel of judges reviews them, and told EPA to continue enforcing CAIR (see EME Homer City Generation v. EPA
, No. 11

- 1302, Order at *2 (D.C. Cir. Dec. 30, 2011)).

The attainment of emissions caps is typically flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Under existing EPA regulations, any excess SO 2 emissions allowances resulting from the lower electricity demand caused by the imposition of an efficiency standard could be used to permit offsetting increases in SO 2 emissions by any regulated EGU. However, if the standard resulted in a permanent increase in the quantity of unused emissions allowances, there would be an overall red uction in SO 2 emissions from the standards. While there remains some uncertainty about the ultimate effects of efficiency standards on SO 2 emissions covered by the existing cap and trade system, the NEMS

BT modeling system that DOE uses to forecast emissio ns reductions currently indicates that no physical reductions in power sector emissions would occur for SO 2
.

15.2.3 Nitrogen Oxides
Under CAIR, there is a cap on NO X emissions in 28 eastern states and the District of Columbia. All these States and D.C. have ele cted to reduce their NO X emissions by participating in cap

- and

- trade programs for EGUs. Therefore, energy conservation standards for electric
motors may have little or no physical effect on these emissions in the 28 eastern states and the D.C. for the sam e reasons that they may have little or no physical effect on NO X emissions. DOE is using the NEMS

- BT to estimate NO X emissions reductions from possible standards in the States where emissions are not capped.15

- 3 15.2.4 Mercury
In the absence of caps, a DOE energy conservation standard could reduce Hg emissions and DOE plans to use NEMS

- BT to estimate these emission reductions. On December 21, 2011, EPA announ c ed national emissions standards for hazardous air pollutants (NESHAPs) for mercury and certain other pollut ants emitted from coal and oil

- fired EGUs. 76 FR 24976 . The NESHAPs do not include a trading program and, as such, DOE’s energy conservation standards would likely reduce Hg emissions. For the emissions analysis for this rulemaking, DOE plans to estimate m ercury emissions reductions using NEMS

- BT based on AEO2011 , which does not incorporate the NESHAPs. DOE expects that future versions of the NEMS

- BT model will reflect the implementation of the NESHAPs

.

15.2.5 Particulate Matter
DOE acknowledges that particulate matter (PM) exposure can impact human health. Power plant emissions can have either direct or indirect impacts on PM. A portion of the pollutants emitted by a power plant are in the form of particulates as they leave the smoke stack. These are direct, or p rimary, PM emissions. However, the great majority of PM emissions associated with power plants are in the form of secondary sulfates, which are produced at a significant distance from power plants by complex atmospheric chemical reactions that often involv e the gaseous (non

- particulate) emissions of power plants, mainly SO 2 and NO X . The quantity of the secondary sulfates produced is determined by a very complex set of factors including the atmospheric quantities of SO 2 and NO X , and other atmospheric constit uents and conditions. Because these highly complex chemical reactions produce PM comprised of different constituents from different sources, EPA does not distinguish direct PM emissions from power plants from the secondary sulfate particulates in its ambie nt air quality requirements, PM monitoring of ambient air quality, or PM emissions inventories. For these reasons, it is not currently possible to determine how the amended standard impacts either direct or indirect PM emissions. Therefore, DOE is not plan ning to assess the impact of these standards on PM emissions. Further, as described previously, it is uncertain whether efficiency standards will result in a net decrease in power plant emissions of SO 2 , which are now largely regulated by cap and trade sy stems.15

- 4 REFERENCES

1 Energy Information Administration (April 2011)

, Annual Energy Outlook 201 1 with Projections to 2035
, Washington, DC. Report No. DOE/EIA

- 0383(201 1). http://www.eia.doe.gov/oiaf/aeo/