2 |January 26, 2010 ICAPCD RULE 400.1 APPENDIX A was installed with a Selective Catalytic Reduction (SCR) and is able to comply with a NOx

emission limit of 9 ppmv when operating with natural gas and 13 ppmv when operating

under diesel fuel. In addition, in 2008, the IID, Niland Generation Station, installe d two

stationary gas turbines. These units are equipped with SCR and are able to comply with

a NOx emission limit of 2.5 ppmv. These turbines are only authorized to burn natural gas.

Without the installation of additional technology, these emission units are currently in

compliance with Rule 400.1 emission limits. Therefore, no substantial change in the

emissions inventory for these facilities due to implementation of this rule is anticipated.

The IID, Brawley Generation Station, operates two turbines that were installed in 1962

and do not have installed NOx emission control equipment. These units will be exempted

from compliance with Rule 400.1 NOx emissions limits by restricting operation to no more

than 400 hours per calendar year.

The IID, Rockw ood Generation Station, operates two turbines that were installed in 1979

and have installed water injection for NOx emission control. These units are able to

comply with Rule 400.1 NOx emissions limits of 42 ppmv for natural gas and 65 ppmv for

diesel fu el. An analysis will be conducted in this Appendix to evaluate cost effectiveness

for installation of SCR equipment to further reduce NOx emissions to 9 ppmv for natural

gas and 15 ppmv for diesel fuel on these units.

There is no federal policy that est ablishes maximum cost effectiveness values for NOx

RACT. The San Joaquin Valley Air Pollution Control District (SJVAPCD) uses a BARCT

threshold of $9,700.00

. (California Air Resources Board, Report to the Legislature,

Implications of Future Oxides of Nit rogen Controls from Seasonal Sources in the San

Joaquin Valley, January 2002, Table 9, Comparison of BARCT Cost Effectiveness

Thresholds). Therefore, for the purpose of this evaluation, the APCD will use a RACT

cost effectiveness value of $8,000

- $10,000/ ton of NOx. The cost of control equipment is

highly dependent on the size of the unit and the type of control selected.

The total initial cost (capital cost and installation) for retrofitting the Rockwood turbines

with a SCR system is approximately $4,400,000. In addition, the estimated annual

operating cost for each turbine is $276,803. Therefore, the estimated cost effec tiveness

for Unit 1 when burning natural gas is $61,731 per ton of NOx reduced, while the

estimated cost effectiveness for both units when burning diesel fuel is $44,839 per ton of

NOx reduced. This evaluation indicates that the cost effectiveness to retr ofit the

Rockwood turbines with a SCR system is way higher than the recommended RACT cost

effectiveness value of $8,000

- $10,000/ton of NOx. Therefore, these units will not be

required to install more efficient technology to reduce NOx emission.

II. COST EFFEC TIVENESS EVALUATION

A. Selective Catalytic Reduction System

The cost effectiveness analysis contained in this report was based upon cost estimates

and methodology contained in the staff report for the SJVAPCD Rule 4703, Stationary

Gas Turbines, Appendix C, as proposed August, 16, 2007.3 |January 26, 2010 ICAPCD RULE 400.1 APPENDIX A The cost of retrofitting units to comply with the proposed rule varies with the size of the

unit and the type of controls used. ICAPCD staff analyzed the cost effectiv eness of Rule

400.1 which was based on the installation and operation of a SCR system on Rockwood

Unit 1 and Unit 2 gas turbines. The Unit 1 and Unit 2 turbines currently have installed

water injection as NOx control s and both turbines are restricted to op erate a maximum of

1000 hours per calendar year (Authority to Construct and Title V permit conditions). Unit

1 has the capability to burn natural gas and diesel and Unit 2 has the capability to burn

diesel only. Both turbines are identical with a 22MW c apacity, 308.6 MMBtu/hr when

burning natural gas and 280.5 MMBtu/hr when burning diesel fuel.

1. Estimated Annual NOx Emissions Reduction

– Equations

The estimated Current and Potential Annual NOx Emissions were calculated using the

following equation and assumptions:

NOx = LF x MMBtu/hr x HR x EF / 2,000 lb/ton

Where:

NOx = Current Annual NOx Emissions or Potential Annual NOx

Emissions

LF = turbine load factor

MMBtu/hr = heat input rating

HR = annual hours of operation

EF = NOx emission factor in pounds per MMBtu

Estimated Annual NOx Emissions Reduction = Current Annual NOx Emissions

– Potential Annual NOx Emissions

a) Unit 1 Estimated Potential Annual NOx Emissions when burning Natural Gas.

A. Current Annual NOx Emissions

– 42 ppm

Unit 1

- Parameters:

LF = 0.75 capacity factor

MMBtu/hr = 308.6 MMBtu/hr

– Natural Gas

HR = 1,000 hour of operation per year

EF = NOx emission Factor in ppm x 0.00366 lb/MMBtu per ppm NOx

NOx = 0.75 x 308.6 MMBtu/hr x 1,000 hr x (42 ppm x 0.0036 lb/MMBtu/p pm) / 2000 lb/ton

NOx = 17.50 tons

B. Potential Annual NOx Emissions

– 9 ppm

NOx = 0.75 x 308.6 MMBtu/hr x 1,000 hr x (9 ppm x 0.0036 lb/MMBtu/ppm) / 2000 lb/ton4 |January 26, 2010 ICAPCD RULE 400.1 APPENDIX A NOx = 3.75 tons

C. Estimated Annual NOx Emissions Reductions

The estimated Annual NOx Em issions Reduction was calculated using the following

equation:

NOx Emissions Reduction = Current Annual NOx Emissions

– Potential Annual NOx

Emissions.

NOx Emissions Reduction = 17.50

– 3.75 = 13.75 tons

b) Unit 1 and Unit 2 Estimated Potential Annual NOx Emissions when burning Diesel.

A

. Current Annual NOx Emissions

– 65 ppm

Units 1 and 2

- Parameters:

LF = 0.75 capacity factor

MMBtu/hr = 280.5 MMBtu/hr

– Diesel

HR = 1,000 hour of operation per ye ar

EF = NOx emission Factor in ppm x 0.00366 lb/MMBtu per ppm NOx

NOx = 0.75 x 280.5 MMBtu/hr x 1,000 hr x (65 ppm x 0.0036 lb/MMBtu/ppm) / 2000 lb/ton

NOx = 24.61 tons

B. Potential Annual NOx Emissions

– 15 ppm

NOx = 0.75 x 280.5 MMBtu/hr x 1,000 hr x (15 ppm x 0.0036 lb/MMBtu/ppm) / 2000 lb/ton

NOx = 5.68 tons

C. Estimated Annual NOx Emissions Reductions

The estimated Annual NOx Emissions Reduction was calculated using the following

equation:

NOx Emissions Reduction = Current Annual NOx Emissions

– Potential Annual NOx

Emissions.

NOx Emissions Reduction = 24.61

– 5.68 = 18.93 tons5 |January 26, 2010 ICAPCD RULE 400.1 APPENDIX A 2. Calculation of SCR Annual Costs

As stated earlier, t o estimate cost effectiveness, IC APCD staff used cost information

contained in the staff report for the SJVAPCD Rule 4703, Stationary Gas Turbines,

Appendix C

. The IC APCD staff estimated the cost of retrofitting for the installation and

operation of a SCR system of the Rockwood turbines. As per SJVAPCD report

, a low

cost estimate of $200/KW for retrofitting was assumed . This method also assumes a 10%

interest rate and a useful life for the control equipment of 15 years. Table 2 provides a

summary of cost to control NOx emissions, including direct capital cost and direct a nd

indirect costs for operation.

Table 2

. SCR Annual Cost

ITEM SOURCE COST

Turbine Rating 22 MW

SCR Cost/KW

- Retrofitting $ 200 .00/KW

Operating Hours 1000

Direct Capital Cost

Total Capital Investment

(TCI) $4,400,000

Direct Annual Cost

Operating Costs

Operator 0.5 hr/shift, $25.00/hr OAQPS $16,859

Supervisor 15% of Operator $ 2,859

Maintenance Cost

Labor 0.5 hr/shift, $25.00/hr OAQPS $16,859

Material 100% of labor cost OAQPS $16,859

Utility Cost

Electricity Cost Variable $5,747

Cat. Replacement MHIA $5,621

Cat. Disposal OAQPS $ 211

Ammonia Variable $1,008

NH3 Inject Skid MHIA $2,916

Indirect Annual Cost

Overhead 60% of O and M OAQPS $31,864

Administrative 0.02 xTCI OAQPS $88,000

Insurance 0.01xTCI OAQPS $44,000

Property Tax 0.01xTCI OAQPS $44,000

Total Annual Costs $ 276,8036 |January 26, 2010 ICAPCD RULE 400.1 APPENDIX A Table 3 summarizes the results of the cost effectiveness calculations for retrofitting of the

Rockwood turbines . Cost effectiveness. The analysis includes t wo scenarios, the first

analyzes cost effectiveness for Unit 1 while operating under natural gas , and a second

includes an analysis for Units 1 and 2 while operating under diesel fuel

.

Table 3 Cost Effectiveness for R etrofitting Rockwood T urbines

Item Unit 1

Natural Gas Units 1 and 2

Diesel

MW 22 22

MMBtu/hr 308.6 280.5

NOx Reductions

(tons/year) 13.75 18.93

SCR Cost/MW $200 $200

Cost Installed Control

Equipment $4,400,000 $4,400,000

Annualized

Equipment Cost $572,000 $572,000

Annual Operation

Cost $276,803 $276,803

Total Annual Cost $848,803 $848,803

Cost Effectiveness

($/ton) $61,731 $44,839