Larry A. Boggs

Director and Senior Counsel

Government Affairs Corporate Env'l Programs

General Electric Company 1299 Pennsylvania Avenue, NW Washington, DC 20004-2407

USA

T 202 637 4126

F 202 637 4017 larry.boggs@ge.com

June 25, 2012

Via Electronic Filing and Email

Mr. Christian Fellner and Dr. Nick Hutson Energy Strategies Group Sector Policies and Programs Division (D243–01)

U.S. Environmental Protection Agency Research Triangle Park, NC 27711 fellner.christian@epa.gov hutson.nick@epa.gov

Attention: Docket ID No. EPA-HQ-OAR-2011-0660

Re: Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units , 77 Fed. Reg. 22,392 (Apr. 13, 2012)

Dear Mr. Fellner and Dr. Hutson:

The General Electric Company (GE) appreciates the opportunity to comment on the proposed Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units. We look forward to working with the Agency as it moves toward promulgation of a final rule.

Please contact me at larry.boggs@ge.com or (202) 637-4126 with any questions regarding these comments.

Sincerely,

/s/

Larry A. Boggs

## COMMENTS OF THE GENERAL ELECTRIC COMPANY

PROPOSED STANDARDS OF PERFORMANCE FOR

GREENHOUSE GAS EMISSIONS FOR

NEW STATIONARY SOURCES:

ELECTRIC UTILITY GENERATING UNITS

77 Federal Register 22,392 (April 13, 2012)

SUBMITTED ON JUNE 25, 2012TABLE OF CONTENTS Page

INTRODUCTION AND EXECUTIVE SUMMARY

............................................................. 1

THE PROPOSAL APPROPRIATELY RECOGNIZES THE IMPORTANCE

OF GAS BUT ALSO MUST PROVIDE A ROLE FOR CLEAN COAL

............................... 2

THE FINAL RULE MUST PROVIDE CERTAINTY TO ALLOW FOR

INVESTMENT IN CLEANER FU ELS AND TECHNOLOGIES

......................................... 3

I. THE PROPOSED RULE APPROPRIATELY RECOGNIZES

THE INCREASE ROLE OF NATURAL GAS IN U.S. ELECTRICITY

PRODUCTION

...................................................................................................... 4

II. NATURAL GAS TURBINES PLAY A VITAL ROLE IN U.S.

ELECTRICITY PRODUCTION

.............................................................................. 5

A. Natural Gas Turbines Provide Critical Operational Flexibility to Today’s Electricity Generation and Distribution Systems, While Allowing More Efficient Response to Demand Fluctuations

............ 5

B. Natural Gas Turbines Are Uniquely Able to Support Renewable

Generation

................................................................................................ 6

C. By Facilitating the Use of Renewable Generation, Gas Turbine Technologies Reduce System-Wide Emissions

........................................ 6

III. STANDARD OF NO LESS THAN 1,100 lb/MWh IS NECESSARY TO

ACCOUNT FOR ACTUAL OPERATING CONDITIONS AND

SITE-TO-SITE VARIATIONS

................................................................................ 7

A. Section 111 of the Act Requires EPA to Take Into Account the Expected Operating Performance in Actual Conditions Over the

Life of the Unit

........................................................................................... 7

B. EPA’s 5% Allowance to Address Partial Load Situations is Insufficient and Not supported by the Record

........................................... 9

C. Failure to Establish an Achievable Standard will Lead to Higher Overall GHG Emissions

............................................................... 12

D. If a 1,000 lb/MWh Standard Is Issued, Alternative Compliance

111’s Requirements

................................................................................ 12

IV. THE PROPOSED SIMPLE CYCLE COMBUSTION TURBINE EXEMPTION, WHICH IS BOTH REASONABLE AND NECESSARY TO ENSURE RELIABILITY OF THE ELECTRICAL GRID, MUST BE

MAINTAINED IN THE FINAL RULE

................................................................... 13

A. GE Supports Issuance of a Specific Simple Cycle Turbine Definition and Exemption

........................................................................ 13

B. Simple Cycle Gas Turbines Are an Essential Part of the Power Generation Portfolio in That They Provide: Highly Flexible Power Generation, the Ability to Manage Contingencies in the Electrical Grid, and Necessary Backup Power

....................................................... 14TABLE OF CONTENTS (cont’d)

Page

C. NGCC Installations, while Flexible, Cannot Substitute for Simple Cycle

...................................................................................... 14

D. The Importance of Maintaining the Broad Simple Cycle Exclusion from the Rule is Underscored by the Fact that the Proposed EGU Definition Exempting Units that Supply Less than 2,900 Hours to the Grid is Insufficient to Address Simple Cycle Units

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

E. The Proposed Range of 950 to 1,100 lb/MWh Does Not Reflect BSER for Simple Cycle Turbines

............................................................ 16

F. The Simple Cycle Turbine Exemption Does Not Provide an Incentive to Install Simple Cycle in Place of NGCC

................................ 17

G. The Simple Cycle Exemption Will Not Delay the Installation of the Heat Recovery Steam Generator Portion of NGCC

.......................... 18

H. NGCC Plants with a By-Pass Stack Must Not be Subject to the Standard When Operated in Simple Cycle Mode

.............................. 18

V. WHILE CARBON CAPTURE IS ACHIEVABLE NOW, EPA SHOULD

PROVIDE FLEXIBLE COMPLIANCE PERIODS TO REDUCE
UNCERTAINTIES RELATED TO SEQUESTRATION THAT MAY

PREVENT INVESTMENT AND TE CHNOLOGY ADVANCEMENT

.................... 19

VI. EPA SHOULD AMEND THE KEY PROVISIONS OF THE RULE TO

ENSURE THAT IGCC CAN BE USED UNDER THE

ALTERNATIVE COMPLIANCE OPTION

............................................................ 20

A. EPA Should Clarify the Definition of Integrated Gasification Combined Cycle Electric Generating Unit to Include the Heat Recovery Steam Generator

..................................................................... 20

B. EPA Should Also Amend the Applicability Requirements for the Alternative Compliance Option Under Proposed § 60.5220(b) to Specifically Allow IGCC Units as They are Defined in the Rule

to Qualify

................................................................................................. 21

VII. THE FINAL RULE SHOULD INCLUDE A CUMULATIVE

ROLLING SUM THAT WILL ACCURATELY REPRESENT

EMISSIONS AND PROPORTIONATELY WEIGH PERIODS

OF HIGH EMISSIONS AND LOW GENERATION

.............................................. 22

VIII. A GROSS OUTPUT STANDARD SHOULD BE ADOPTED

OVER A NET OUTPUT STANDARD

................................................................. . 23

IX. BECAUSE FUEL MONITORING MEETS CLEAN AIR ACT
COMPLIANCE REQUIREMENTS AND DOES NOT INVOLVE THE

MEASUREMENT UNCERTAINTIES AND COSTS OF CONTINUOUS EMISSION MONITORS, THE RULE SHOULD ADOPT FUEL

SAMPLING AS AN INDEPENDENT COMPLIANCE METHOD

.......................... 23

-ii

-TABLE OF CONTENTS (cont’d)

Page

X. EPA SHOULD ADOPT AN EXEMPTION FOR COMBUSTION

OF WASTE FUELS SUCH AS BLAST FURNACE GAS AND

REFINERY FUEL GAS ....................................................................................... 25

XI. EPA SHOULD PROVIDE FOR COMPLIANCE CALCULATED

AS AN AVERAGE OF ALL NEW ELECTRIC GENERATING

UNITS AT A SINGLE PLANT ............................................................................. 26

XII. COMBINED HEAT AND POWER FACILITIES WHERE USEFUL

THERMAL OUTPUT ACCOUNTS FO R 20 PERCENT OF THE TOTAL

USEFUL OUTPUT SHOULD BE EXCLUDED FROM THIS RULE .................... 26

XIII. THE POLLUTION CONTROL PROJECT EXCLUSION SHOULD

NOT BE ELIMINATED ........................................................................................ 26

XIV. THE PROPOSED RULE SHOULD BE REVISED TO INCLUDE

LANGUAGE CLARIFYING THAT THE FINAL STANDARD

INCLUDED IN THIS RULE FOR NGCC DOES NOT APPLY TO

PSD PERMITS FOR SIMPLE CYCLE UNITS .................................................... 27

XV. EPA SHOULD INCLUDE EXPLICIT REGULATORY LANGUAGE

IN PART 52 PSD REGUATIONS TO CLARIFY THAT

REGULATION OF CO2 UNDER SECTION 111 TRIGGERS

THE TAILORING RULE GHG EMISSION THRESHOLDS................................ .27

CONCLUSION................................................................................................................ 28

-iii

-Introduction and Executive Summary

General Electric Company (GE) s ubmits the following comments on the Proposed Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Gener ating Units, 77 Fed. Reg. 22,392 (April 13, 2012). GE is a diversified servic es, technology, and manufacturing company with a commitment to achieving custom er success, innovation, and worldwide leadership in each of its businesses. GE operates in more than 100 countries and employs more than 300, 000 people worldwide.

The proposed rule would r egulate products manufactured by GE, such as gas turbines, and services that it offe rs, such as methods for improving the efficiency of electricity generation. In addition, GE both invests in and operates power plants in the United States.

GE supports EPA’s overall efforts to move the country towards more efficient power generation us ing natural gas and where it can meet appropriate standards, coal. GE manufactures products that are designed to meet stringent

emissions standards and that are extremely efficient. We are able to deploy these products quickly to provide reliable power to the nation. Our detailed comments provide a series of reco mmendations aimed at promoting the proposed rule’s goals of efficient and re liable power generati on, including the following:

 EPA should promote use of natu ral gas-fired power, which is both efficient and reliable;

 The standard should be set to allow natural gas combined cycle (NGCC) turbines to meet the standard during the full range of operating conditions and environment s and to play a vital role in supporting deployment of renewabl e energy sources like wind and solar power; this standard should be no lower than 1,100 lb/MWh based on a 12 month rolling sum;

 EPA should maintain the propos ed exclusion of simple cycle gas turbines for several reason s, including, among others, the critical role they play in deliver y of electricity across the country;

 EPA should recognize that integrated gasification combined cycle (IGCC) is a proven tec hnology and that the carbon capture aspect of carbon captur e and sequestration (CCS) is available now, but EPA should al so provide flexible compliance periods to reduce uncertainties related to sequestration;

 EPA should adopt a gross output standard over a net output

standard.

GE’s Products and Services Ar e Reliable and Promote Energy Efficiency: GE’s wide array of service and product offerings are designed to meet world demand for abundant, reliable, and efficient energy. GE’s powergeneration equipment is among the most environmentally clean equipment available in the marketplace. GE Ener gy manufactures gas turbines ranging in

size from 5 MW up to some 300 MW. These cl ean-running combustion turbines

are the most efficient m eans of generating electr icity from fossil fuels commercially available. GE Energy provides solutions—from air-cooled heat exchangers to wind turbines—that address utilities’ and industrial facilities’ toughest challenges. In addition, GE conducts extensive research and development to produce technological advanc es in energy efficiency, reliability, and other key operatio nal parameters.

GE Energy is the only company in t he world that develops and deploys a full portfolio of energy technologies and so lutions to ensure efficient and reliable power generation, transmi ssion, distribution, and utili zation regardless of fuel

choice and customer location. GE’s Power Generation business develops and deploys highly efficient power generation systems capable of meeting extremely aggressive environmental per formance standards. These products include gas and steam turbines for multiple applicat ions, generators, coal-powered IGCC systems with precombustion CO 2 capture capability, reciprocating gas engines and aeroderivative gas turbines for natural gas and alternative fuels, wind, solar and nuclear power.

With more than 100,000 employees in over 100 countries, GE Energy’s diverse portfolio of product and service solutions and deep industry expertise help customers solve their challenges loca lly. We serve the energy sector with technologies in such areas as natural gas, oil, coal and nuclear energy; wind, solar, biogas and water processi ng; energy management; and gridmodernization. We also offer integrated solutions to serve energy- and waterintensive industries such as mining, metals, marine, petrochemical, food and beverage and unconvent ional fuels.

GE Energy Financial Services (EFS) invests globally across the capital spectrum in essential, long-lived, and capi tal-intensive energy assets that meet the world’s energy needs. In the Unit ed States, GE EFS owns a controlling interest in five power plants (four nat ural gas-fired plants and one coal-fired plant), and has invested pref erred equity, lease equity or debt in over 100 other power plants, including fossil-fuel-fir ed plants and renewable energy plants. Based in Stamford, Connecticut, GE EF S helps its customers and GE grow through new investments, st rong partnerships and optimiz ation of its $20 billion portfolio of energy assets. EFS has inve stment commitments totaling over $8

billion in renewable energy projects, including wind, solar, hydroelectric, landfill gas, and other renewable energy technologies. 1

The Proposal Appropriately Rec ognizes the Importance of Gas But

Also Must Provide a Role for Clean Coal: The proposed rule appropriately recognizes the increasing role that natural gas will play in the nation’s electricity

1 For more information on GE EF S, vi sit www.geenergyfinanc ialservices.com

.

Page 2 of 28production. Not only is natural gas a re liable, versatile, economical, and clean source of energy, but it is also in abundant supply, helping to assure long-term price stability. The full array of natural gas-fired generation technologies that exists also helps promote competitive pr ice levels for power from all available

fuels. The environmental benefits of gas, including lower greenhouse gas (GHG) and criteria pollutant emissions and reduced solid waste generation combined with the factors above, make it a natural selection for the next generation of power equipment installations.

At the same time, it is important for EPA to recognize that coal remains an abundant natural resource, and it can be utilized in an environmentally acceptable manner. For example, GE has invested in bringing IGCC to commercial reality. IGCC is well suited to carbon capture as has been proven in 19 commercial facilities that are using GE gasification technology to capture carbon generated from coal and petroleum coke. With res pect to this rule, GE is ready to offer IGCC commercially at carbon capture efficiencies that will meet the proposed standard today. Cleaner coal te chnologies are being refined not only

to reduce or store CO 2 but also to use it beneficially. CO 2 is being increasingly recognized as a valuable byproduct of fo ssil fuel consumption, and coal will serve as the primary source to obtain adequate supplies for carbon capture utilization and storage (CCUS). The primary application of CO 2 utilization is enhanced oil recovery. This rule—if crafted to provide flexibility, certaint y, and stability that permits the beneficial use of coal—can ca talyze the continued development and deployment of CCUS. Coal can thus se rve as an option for a diverse energy

infrastructure that is tolerant to future upsets in supply and pr ice fluctuations in both coal and gas.

The Final Rule Must Provide Cert ainty to Allow for Investment in Cleaner Fuels and Technologies: Notwithstanding the benefits of lower emitting fuels and technologies, investment in new equipment by utilities requires a stable regulatory environment—one in which the regulations provide an

achievable level of emissions control and are simultaneously not significantly vulnerable to legal challe nge in the courts. The over arching objective of any CO 2 regulation must be the most effici ent generation and use of energy while maintaining a stable regulatory framework such that market participants believe investments will result in a reasonable pa yback period and not risk the possibility of unknown control requirements at the time of investment.

Accordingly, as EPA is considering its options for this rulemaking, the Agency should take into account the si gnificant comments filed and try to

accommodate the commenters’ concerns the extent to which doing so will prevent perpetuation of uncertainty. Indeed, incr easing certainty is critical because uncertainty tends to limit investm ent in new technologies. Specifically, EPA should consider ways in which the rule can be written to minimize the risks of litigation while also meeting stat utory requirements and promoting use of natural gas, consistent with current trends towards increased natural gas usage

Page 3 of 28for power generation. Prom oting certainty for the en ergy generating sector will assist EPA in achieving the proposal’s en vironmental objectives. By bolstering the legal analysis supporting this proposed standard, EPA will promote a rule that is more likely to be perceived by regulat ed entities as likely to survive legal challenge, thereby helping to foster invest ment in clean, efficient energy during an appeal period that could last several years.

I. The Proposed Rule Appropriately Recognizes the Increased Role of Natural Gas in U.S. Electricity Production.

The proposed rule correctly predicts that natural gas-fired electric generating units (EGUs) will be the “facilities of choice” for the foreseeable future

due to the low cost of natur al gas, the increase in dom estic natural gas supplies, and the higher cost of coal-fired EGUs. Given recent discoveries of natural gas and new technologies to mine gas more efficiently, the U.S. possesses natural gas supplies sufficient to power electricity production, while continuing to serve manufacturing and residential needs. As illustrated in the figure below, for the past two decades, natural gas turbines have dominated capacity additions in

U.S. electricity production. The abundance of natural gas in the U.S. and the availability of highly efficient, reliable, and operationally flexible natural gas-fired turbines will assure that natural gas-fi red EGUs will be the predominant fossil fuel fired technology for the foreseeable future.

In addition to making economic and energy sense, gas turbines are also a better environmental choice for electricity generation. They produce lower

overall emissions of CO 2, criteria pollutants, and haz ardous air pollutants than other fuels. Compared to the coal-f ired fleet, on average, natural gas-fired combined cycle generation result s in a 50% reduction in CO 2 emissions, about a

Page 4 of 2865% reduction in NOx, and 99% less SO x for the same electricity output 2
Similarly, natural gas combined cycle generation does not produce the metals and other hazardous air pollutants asso ciated with coal-fired generation. Moreover, the solid waste byproducts of coal-fired units are eliminated with natural gas firing.

Natural gas and the wide array of tech nologies developed to put this resource to productive use will also help fu lfill the President’s goal to ensure that by 2050, 80 percent of U.S. electricity will come from a diverse set of clean energy sources, including wi nd, solar, biomass, hydr opower, nuclear, efficient natural gas, and clean coal. 3

II. Natural Gas Turbines Play a Vital Ro le in U.S. Electricity Production.

Because natural gas turbine electric ity production is versatile, dependable, economical, and clean, a wide array of te chnologies has been developed in this area. Gas turbines provide competit ive output and efficiency when compared

with coal and nuclear energy for both intermediate and base-load generation. As discussed further below, they also prov ide the additional benefit of affording significant operational flexib ility to assure electric reliability and support for renewable generation.

A. Natural gas turbines provide critical operational flexibility to today’s electricity generation a nd distribution systems, while allowing for more efficient res ponse to demand fluctuations.

Gas turbine technology plays an important role within the ov erall electricity generation and distribution system. Electr icity demand in any region varies significantly each day and across the seasons. Typical electric demand peaks during the day when a majority of people and industries are most active and reaches a minimum at night. Seasona l peak power demands most commonly occur on hot days with increased air conditioning demand and on cold days in regions with significant electr ic heating. As a result, electricity generation must be modulated across the electrical supply gr id to coincide with this variation in demand. While the highly variable daily and seasonal electrical demand may be generally predictable, cont ingencies and errors in prediction mean that operational flexibility and quick responses in producti on are essential. Such operational flexibility and ra pid response can generally only be achieved with highly flexible gas turbines. As a re sult, gas turbines play a key role in maintaining grid reliability by providing a flexible power supply that can be reliably dispatched when powe r is needed quickly.

2 US EPA, “Clean Energy” web p age, http://www.epa.gov/cleanenergy/energy-and-you/affect/air

emissions.html

. 3 See Standards of Performance for Greenhouse Ga s Emissions for New Stationary Sources: Electric Utility Generating Units; Proposed Rule, 77 Fed. Reg. 22,392, 22,396 (Apr. 13, 2012).

Page 5 of 28B. Natural gas turbines are uniquely able to support renewable generation.

While the need for operational flexibility is already signific ant, it will grow significantly with the increased use of renewable energy. The use of nonhydroelectric renewable g eneration has increased considerably in many states over the past decade. To date, 30 states, plus the Dis trict of Columbia, have

established Renewable Portfolio Standards (RPS) that require a minimum share of electrical generation to be produced from renewable generation. As a result of the increased deployment of renewable g eneration, the short term variability in the electrical supply has also increased. Renewable power, especially from wind and solar, will be expected to fluct uate hourly and even minute-to-minute with changes in wind speed, cloud co ver, and other environmental factors. With this generation mix, electric supp ly must be available to quickly compensate for the combined variability of demand and fluctuat ion in the renewable supply. When this highly variable renewable energy s upply is overlaid on existing alreadyvariable electric demand, the importance of increased operational flexibility for each electric generating unit on the grid becomes apparent.

Gas turbine technology is uniquely capable of providing this operational flexibility, especially w hen compared to nuclear and coal-fired generation technologies. An electric supply grid composed of nuclear, coal, gas turbine and renewable technologies has traditionally relied on nuclear and coal plants to provide relatively steady base load power. The grid , however, will accept all available renewable energy fr om hydro, wind, or sola r generation. Because the energy from these sources is variable, th e grid operator fluctuates generation from gas turbine plants to match the va riations in renewab le generation supply and electrical demand. In response to the increased deployment of renewables, gas turbine installations are now requi red to start and stop more often and with greater speed in order to s upply energy to the grid as quickly as possible to compensate for these rapidly changing loads. In this role, the flexible operating capability of gas turbines has become an in creasingly critical attribute. This capability enables the increas ed deployment of renewab les while maintaining safe and reliable grid operation.

C. By facilitating the use of renewable generation, gas turbine technologies reduce system-wide emissions.

Energy generation from renewable s ources like wind and solar have zero emissions and very low variable cost of generation. However, if flexible generation assets, such as gas turbines , are not available, these renewable technologies will not be deploy ed. In other words, gas turbines are an essential component of renewable energy sources’ ab ility to penetrate the market. Failure of renewable energy source deployment will result in increased CO 2 emissions. Any CO 2 emission limitations that EPA establis hes in this rulemaking, therefore, must consider the important role of gas turbine tec hnologies in reducing systemPage 6 of 28wide emissions. Emission limitations that discourage the use of these technologies will adversely impact relia bility, renewable deployment, and

emissions.

III. A Standard of No Less Than 1,100 lb/MWh Is Necessary to Account for Actual Operating Conditions and Site-to-Site Variations.

EPA proposes a CO 2 emission limit of 1,000 lb/MWh-hr 4 based on the operation of an efficient natural gas combined cycle plant, but requests comments on an emission range fr om 950 to 1,100 lb/MWh-hr. 5 Although the proposed limit may be achievable by new NGCC units at opt imum load under optimal operating conditions, it is unlikel y to be achievable over the full range of operating conditions for the full life of a unit. Ther efore, any standard issued must be set no lower than 1,100 lb/MWh on a 12-month rolling basis. Any lower standard would present technological challenges, particularly given partial load operation, degradation ov er time, startup and shutdown emissions, diversity of location, operating conditions and practices, and geographi cal and other factors. Moreover, to the extent ut ilities perceive compliance risk, they will be less likely to install new NGCC units, thus perpet uating the operation of existing higheremitting units. 6 EPA should design its standard to meet the statutory requirements but also to encourage deployment and ma rket penetration of loweremitting technologies. Otherwise, any emission benefits obtained by a tighter standard will likely be offset by the negativ e impact of reduced investment in new

NGCC which would be unable to meet the standard.

A. Section 111 of the Act requir es EPA to take into account the expected operating performance in actual conditions over the

life of the unit.

While GE’s fleet of gas turbine products when newly installed in a combined cycle plant are c apable of achieving the proposed emission limitation on a standard day in a newly insta lled (not-yet-degraded) condition ( i.e., initial unit performance conditions at original installation prior to any performance degradation due to operating hours or startup and shutdow n cycles), operating scenarios exist for which the combined cycl e plant would not be able to achieve the 1,000 lb/MWh limit. Most notably, during periods of frequent startup and shutdown, periods of low l oad operation, an d periods operated on a backup fuel, emissions can be expect ed to exceed 1,000 lb/MWh. Often plants do not operate consistently at peak load, such as units that are parked at low load overnight to reduce production during times of low demand. Ma ny plants deploy supplemental firing (also referred to as duct firing) to boost steam turbine

4 77 Fed. Reg. at 22,436 (Propos ed Rule 40 C.F.R. § 60.5520(a)).

5 77 Fed. Reg. at 22,414.

6 The proposed emission limit is based on a 12-month rolling average and will encompass all potential operating scenarios including base load operation, start-up and shutdown, range of load operation, and frequent load fluctuation.

Page 7 of 28generation during periods of peak demand. This supplemental firing to provide peak generation often reduces overall plant efficiency with a resulting increase in

CO 2 emissions per megawatt-hour. In addi tion, plants with water restrictions often must implement less efficient cooling technologies to reduce water consumption. These real life operating scenarios must be considered when establishing the emission limit. In addition, any standard must reflect the fact that a NGCC’s performance degrades ov er its useful life.

As stated previously, operational flexib ility is an essential attribute and requirement for gas turbine-based elec trical generating installations. Unfortunately, the proposed emission level of 1,000 lb/MWh would have the unintended consequence of limiting operational flexib ility essential to the continued reliable deployment of renewable electricity g eneration; this will result in additional electric generating units needing to be added to meet existing demand. When plant owner/ operators bid on opportuniti es to provide power generation to grid operators, they must include min-load and max-load levels as well as other various cost components. When a plant owner/operator’s bid is successful, the grid operator will comply with the bid’s minimum and maximum load specifications. If the proposed 1,00 0 lb/MWh limit is promulgated, plant operators will need to bid a narrower range of load to ensure that compliance is maintained. As a result, additional capacit y will need to be built or less efficient capacity will be used that is not subject to the rule because the more efficient capacity is not available due to load rest rictions. The impact will be additional capacity, increased variable elec tricity cost, and higher total CO 2 emissions. Moreover, a critical market for NGCC, supporting renewables will be lost because, at a 1,000 lb/MWh standard, the load restri ctions that would be required will not be workable for NGCC to support renewable installations like

wind and solar.

Section 111(a)(1) defines the term “standard of performance” as:

(1) The term “standard of perfo rmance” means a standard for emissions of air pollutants which reflects the degree of emission

limitation achievable through the application of the best system of emission reduction which ( taking into account the cost of achieving such reduction and any nonair qualit y health and environmental impact and energy requirements ) the Administrator determines has

been adequately demonstrated

. 7

Thus, NSPS must be “achievable” and “adequately demonstrated.” Unfortunately, the proposed standard is not achievable for NGCC when there is significant load fluctuation and several startup and shutdown events unless, as noted above, significant restrictions on the range of l oad operation and starts/stops are imposed. CO 2 emissions during star tup are higher because there are periods of fuel burn while no energy (MW) is being produced or where

7 42 U.S.C. § 7411(a)(1) (empha sis added).

Page 8 of 28a relatively low level of energy is being dispatched to the grid. Start emissions are highly variable depending on the tem perature of the equipment at the initiation of the start. As an example a plant that has shutdown overnight can start in generally less t han an hour because the equi pment is still warm from previous operation. If that same plant has been down for a week, a start may take upwards of 3 hours to allow t he equipment to achieve full operating temperature without inducing si gnificant thermal stresses to the equipment. For each plant start, the facility must operate for 3 to as much as 8 hours at baseload condition to ensure the average value fo r that operating peri od is below a 1,000

lb/MWh limit.

By setting the limit at the upp er end of EPA’s proposed range, i.e., at 1,100 lb/MWh, EPA will not only take into account the demonstrated achievable

limitation for NGCC but wil l also increase the pr obability of overall CO 2 reduction. EPA will further enable the development of zero-emission renewable yet variable energy sources like wind and solar power, since NGCC are utilized to support those applications. NGCC units supporti ng renewable energy generation service require an 1,100 lb/MWh limit, and if EPA finalizes a lower limit, the result that should be expected is that fewer renewable power units will be installed.

In sum, if EPA appropriately takes into account the Section 111 factors, it will adopt a 1,100 lb/MWh limit. EPA must consider the overall impacts in its evaluation of the complete range of NSPS factors in determining the best system

of emission reduction.

B. EPA’s 5% allowance to addr ess partial load situations is insufficient and not supported by the record.

EPA’s efforts at addressing the par tial load situation understate the impacts. The April 2012 Memorandum regarding Design Data for New Combined Cycle Facilities actually a cknowledges that at below 80% load, the actual heat rate increases significantly and concludes that a 5% heat rate increase would be appropriate to account for part-load conditions:

Operational load is one of the primary fact ors in the actual operating efficiency and CO 2 emissions rate of a combined cycle power plant. Combined cycle power pl ants are most efficient when operating at full load. At 80 percent load, the actual heat rate only increases by approximately 1 percent relative to the design basis heat rate. However, below 80 percent load, the heat rate begins to increase at a more significant pace. At 60 percent load, the actual heat rate increases by approximately 10 percent above the design rate. Even though most combined cycle power plants are intended to operate at high loads, part-load operation is inevitable with

Page 9 of 28variable demand. We selected a 5 percent heat rate increase relative to the design rate to account for part-load conditions. 8

The 5% allowance is simply insufficient to accommodate the oper ating realities of NGCC plants.

EPA’s Design Data Memo outlines the methodology by which the proposed CO 2 emission limit was derived based on NGCC. In evaluating the Design Data Memo, GE observes that a number of elements of the analysis clearly indicate that a 5% allowanc e is insufficient and that even the 10% efficiency lapse EPA discusses in the De sign Data Memo may be insufficient to represent NGCC unit performance in real world operating env ironments over the

life of a unit.

The Design Data Memo states that a NGCC plant’s performance (efficiency) will lapse as much as 10% at part load and adjusts the values by 5% to account for the range of annual operation. New generations of the gas turbine fleet are designed to turn down farther in response to customer and electric grid

demands. At these lower turn down rate s, the performanc e lapse would be closer to 15% at those load points. The actual correction factor to account for part load operation is highly dependent on the operating requirements of the plant. The plant will operate in response to grid requirement s, and accordingly the plant operator does not fully control t he plant operational profile. To account for variable and unpredictable operating requ irements, the rule should provide at least a 10% allowance as compared with t he 5% EPA indicates is built into the proposed rule.

While EPA adjusts its pr edicted emissions level by 1% for annual range of ambient temperatures, variation across ambi ent can be as much as 3% in very warm or very cold climates. While the 1% value may well be representative of an annual average for many locations, for others that experience consistent temperature extremes, it is likely too low. 9 In addition, the assumptions in the Design Data Memo for plant operational fa ctors do not account for the range of variability to be expected. The annual emission rate must consider startup/shutdown, supplement al duct firing operation, and ba ck-up fuel operation. While these parameters are difficult to quantify, they are real and must be

considered in the evaluation of annual emissions. A se parate 5% adjustment to account for these operational conditions is needed.

The Design Data Memo also concludes that combined cycle plant efficiencies can be improved by installing more efficient HRSGs and that it is

therefore reasonable to impose a 1,000 lb/MWh stan dard. While the Design

8 Memorandum from OAQPS to Docket, Design Data for New Combined Cycle Facilities , EPA

HQ-OAR-2011-0660-0068 (Design Data Memo).

9 The assumptions of 5% for degradation, and 125 BTU/KWh for SCR/CO Catalyst are

reasonable.

Page 10 of 28Data Memo is unclear on this point, it appears that this stat ement is intended to

indicate a more efficient steam turbi ne bottoming cycle, which includes the steam generation by the HRSG, the steam turbine design, and condenser type. The Design Data Memo incorrectly conclude s that such improvements are readily feasible for most or all plant designs and that “selection of combustion turbine engine designs would not be affected by this standard.” 10 The bottoming cycle is matched to the gas turbine to optimize the overall cycle. While it is true that a triple pressure steam turbine with reheat will be significantly more efficient than a single pressure steam turbine with no rehea t, it is not true that it would be relatively simple to install a more effi cient steam turbine on many of the gas turbine plant designs. The Gas Turbine World performance values would typically include the highest efficiency botto ming cycle that is available for that specific turbine model but would not represent th e range of expected designs

. Certain gas turbine models simply do not have sufficient exhaust thermal energy to gain any advantage by installing a more complex steam turbine. Accordingly, higher efficiency steam turbine bottoming cycle would not be feasible.

Further, using EPA’s calc ulation spread sheet and assumptions , EPA is

correct that 90% of available NGCC de signs can achieve t he proposed emission limit. The problem is that if the assumptions are not sufficiently representative (as we explain above), the achievability of the limit is dramatically affected. Indeed, if the assumptions ar e adjusted by 2% to acc ount for non-optimal site designs, such as the use of a lower wa ter usage condenser technology, like an Air Cooled Condenser (ACC) in arid climates, then less than 50% of the new combined cycle designs woul d be able to satisfy the proposed standard of 1,000 lbs/MWh. Moreover, when an additional 5% is incl uded to account for starts, stops, duct firing, and other factors less than 35% of the turbines can meet the

standard

.

This evaluation further bolsters GE ’s recommendation t hat the emission limit should be increased to 1,100 lb/MWh and compels the conclusion that the 1,000 lb/MWh proposed standard is not achi evable or demonstrated as required under Section 111. It is at the 1,100 lb/M Wh level (not the 1,000 level), that approximately 97% of new combined cycle designs would be able to achieve compliance in light of “real life” plantsi te constraints and operational requirements (all of which the statute r equires the Agency to consider in setting the emissions limit). Gas Turbine World supports this conclusion given that Gas Turbine World performance values represent the best a plant can achieve newly installed and

without degradation. 11 As discussed above, the Design Data Memo’s

10 Id.

11 Gas Turbine World data was used as the performance basis for the plants. For this discussion plant performance is specifically referring to plant efficiency. Plant efficiency, heat rate, and CO 2 emissions in lbs/MWh are proportional to one anot her. While these data are representative of achievable performance for NGCC facilities based on optimal performance configurations, many

facilities have less favorable conf igurations. For example, the Gas Turbine World performance values are based on steam turbine condenser capabi lities with once through cooling. The use of an air cooled condenser in place of once through c ooling (or a cooling tower) significantly reduces

Page 11 of 28supposition that the 1,000 lb/MWh level can be achieved through higher efficiency HRSGs is simply not true. In sum, to account for all of the above factors, the tolerance mu st be increased by 10% to account for site and design requirements in the final rule and the limit raised.

C. Failure to establish an achievabl e standard will lead to higher

overall GHG emissions.

Even if this were a close call, whic h it is not, the Ag ency should strongly consider establishing a work able limit for these units because when they operate at baseload, they provide significant opportunity for emissions improvement as compared with other technolog ies. If the emission lim its are not considered achievable, however, NGCC wi ll not be installed and higher emitting plants will continue in operation. Section 111(a)(1) explicitly pr ovides for the Administrator’s consideration of any nonai r quality health and environ mental impact and energy requirements in establishing a standard of performance and the environmental impact of relying on estab lished, higher emitting generat ion is one that should be

taken into consideration.

D. If a 1,000 lb/MWh standard is issued, alternative compliance options or exemptions must be provided to satisfy section 111’s requirements.

If EPA implements the proposed 1,000 lb/MWh standard it must provide an alternative compliance option for peri ods in which plants operate at part-load conditions. For example, operations on loads of less t han 50% of capacity

should not be included in t he compliance calculations.

We note that historically, NGCC (along with nuclear and coal technologies) provided power to satisf y baseload demand, while simple cycle gas turbines provided the operational flexibility desired in the grid to counter

variations in load foreca sts and contingencies. In light of the increased development of renewables, however, NG CCs–with their preferable efficiency levels–are increasingly used for balancing renewables and providing flexibility. NGCCs also have become more flexible as a result, although a combined cycle is inherently not capable of maintaining t he same extreme level of flexibility as a simple cycle gas turbine, both economically and operationally. EPA should

therefore increase the limit for NGCCs or provide ot her appropriate alternative compliance options to encourage their use in this manner (with the CO 2 reduction benefits they bring) while al so adopting the simple cycle exemption as discussed

in detail below.

water usage in arid climates, at the tradeoff of approximately 1.5% percent degradation in site performance. This degradation varies with ambient and would be higher in hotter climates. Moreover, NGCC plants are moderately less effici ent at higher altitudes. A plant installed in Denver (mile high) would have a performance la pse of approximately 0.5% compared to a plant

located at sea level.

Page 12 of 28IV. The Proposed Simple Cycle Co mbustion Turbine Exemption, Which Is Both Reasonable and Necessary to Ensure Reliability of the Electrical Grid, Must Be Maintained in the Final Rule.

EPA recognizes that because simple cycle turbines do not recover waste heat, have frequent startup and shutdown, frequent parti al load operation, high altitude operation, air (as compared with wa ter) cooling, and degradation, simple cycle turbines cannot meet limits in the proposed range. 12 Accordingly, EPA is not including these units under the proposed standards. It is worth noting that without such a provision, t here would likely have to be several emission limits issued, geared to the different types, cla sses, and sizes of units as required by Section 111 to provide a standard that is adequately demonstrated, higher than 1,100 lb/MWh, and some significantly higher than 1,100 lb/MWh

.

A. GE supports issuance of a specific simple cycle turbine definition and exemption.

The proposed rule includes a spec ific exemption for simple cycle

combustion turbines 13 but seeks comment on whether that exempti on should be maintained. The rule defines simple cycle combustion turbine as follows:

Simple cycle combustion turbine means a stationary combustion

turbine that which [sic] does not recover heat from the combustion turbine exhaust gases for purposes other than enhancing the performance of the combustion turbine itself. 14

Simple cycle combustion turbine installa tions must be excluded as EPA has proposed because, as discuss ed in detail below, the proposed emission limit is not achievable with adequatel y demonstrated technology given the operating modes required for such turbines. Ev en the most efficient simple cycle gas turbine, GE’s LMS100, is only capable of meeting the proposed limit in a newly installed and non-degraded condition and under optimal operating conditions. Requiring simple cycle gas turbines to meet the NG CC-based limits under normal operating conditions w ould inhibit their installa tion and could severely disrupt grid operation and electricity ma rkets. Reduced use of simple cycle

turbines could also lead to curtailment of renewable energy and increase net CO 2 emissions. Indeed, if simple cycle turbines were to be covered by this NSPS, a separate emission limit would need to be es tablished to satisfy Section 111’s requirements for a standard that has been demonstrated to be achievable in practice. A 1,000 lb/MWhr (or GE’s recommended 1,100 lb/MWh) limit does not

meet those statut ory criteria.

12 See 77 Fed. Reg. at 22,411, 2 2,431-32, 22,440.

13 77 Fed. Reg. at 22,437 (Propo sed 40 C.F.R. § 60.5520(d)).

14 77 Fed. Reg. 22,440 (Proposed 40 C.F.R. § 60.5580).

Page 13 of 28Excluding simple cycle turbines is also consistent with the existing regulatory framework. Re ciprocating engines (RICE) are currently regulated under NSPS Subparts IIII and JJJJ. Thus they do not fall under the regulatory framework being used for CO 2 for gas turbines, and this would create an unintended consequence.

B. Simple cycle gas turbines are an essential part of the power generation portfolio in that they provide: highly flexible power generation, the ability to ma nage contingencies in the electrical grid, and n ecessary backup power.

Simple cycle gas turbine installations are an essential technology solution

within the overall electrical generation portfolio. Simple cycle gas turbines have been used for renewable integration and ensur ing grid reliability for several decades. These units are highly flexible and capable of: rapid starts and stops; multiple start and stop cycles per day ; ramping up and down with load to maintain frequency of the electrical grid ; providing voltage regulation service by participating in ancillary serv ices; and providing electricit y to the grid within a few minutes. In addition, these units can be installed in a much shorter timeframe than NGCC units to meet newly aris ing demand increases or replace plant

retirements.

Simple cycle plants operate under a di fferent maintenance philosophy that is highly valued by operators of flexible units. Due to their enhanced flexibility, they are used to maintain grid frequen cy and voltage in addition to providing contingency power when there is loss of generating units. For these reasons, simple cycle gas turbines are widely us ed throughout the country to ensure reliability of the electrical grid.

C. NGCC Installations, while flexibl e, cannot substitute for simple cycle.

While NGCC installations are also capable of rapid start and deployment, they are not nearly as agile as simple cycle units. Because of the added complexity of the associated steam cycle, a combined cycle plant is unable to respond as quickly and flexibly as a simp le cycle turbine. Further, while many simple cycle units are capable of multiple start and stop cycles per day, frequent start and stop cycles of NGCC facilities also induce significant thermal stress and associated operational cost and reliability tradeoffs whic h must be considered in the plant operation.

Simple cycle gas turbines are critical to grid stability by supporting highly volatile, intra-day or minute-to-minute pea king scenarios, resulting from errors in forecasting, integration of an increased amount of ze ro emissions renewables, and unanticipated events result ing from loss in generation or load. In addition, these gas turbines are used to maintain the quality of electricity generation

Page 14 of 28through voltage, frequency regulation, and backup generation which are used to meet stringent North Amer ican Electric Reliability Corporation (NERC) and Independent System Operator (ISO) guidelines. GE has continually invested in technology improvement to reduce the ca rbon footprint by achieving best-in-class efficiencies. Utilization of these simple cyc le gas turbines enhances the reliability of the electric grid, promotes the integration of an increased amount of renewables, and reduces the total amount of CO 2 emissions generated by the replacement of low efficiency assets wit h higher efficiency, natural gas burning gas turbines.

The increased flexibility of simple cycle units in comparison with NGCC units is reflected in the operation of t he power market. NGCC units typically bid in the previous day for generation on the following day, while simple cycle units can bid on the same day—a mere hour ahead of the demand. In contrast, it would be prohibitively expensiv e for traditional NGCC to bid on the same day. In short, NGCC plants are able to respond to grid variability demands, while simple cycle units can provide another layer of flex ibility for rapid starts, stops, and grid

fluctuations on a smaller scale than NGCC can provide. This means that any final rule needs to ensure that simple cycl e turbines can continue to play the vital role they currently play in the power generation portfolio.

In sum, both NGCC and simple cycle gas turbines are essential with simple cycle units being critical to pr ovide grid stability and balancing power to enable the continued deployment of rene wable electric generation. The best technology deployment at specific elec tric generating installations must be dictated by the electric grid requirements for that installation, not by regulatory

limitations that could prove disruptive.

D. The importance of maintaining the broad simple cycle exclusion from the rule is underscored by the fact that the proposed EGU definition exempting units that supply less than 2,900 hours to the grid is insufficient to address simple cycle

units.

The proposed rule exempts any EGU that supplies le ss than one-third of its potential electric output capacit y (2,900 hours) to the grid. 15 EPA requests comment on whether this output requirem ent in the definition would make the simple cycle exemption unnecessary:

The potential electric output requirem ent in the definition of electric generating unit would already excl ude facilities with [a] permit restricting [sic] limiting operation to less than 1 ⁄ 3 of their potential electric output, approximately 2,900 hours of full load operation annually. The peaking season is general ly considered to be less than 2,500 hours annually , and we are requesting comment on if

15 77 Fed. Reg. at 22,439 (Propo sed Electric generating unit definition at 40 C.F.R. § 60.5580).

Page 15 of 28the capacity factor exemption is su fficient such that specifically exempting simple cycle turbine is unnecessary. 16

EPA justifies the simple cycle gas turbi ne exemption in part by stating that most simple cycle turbines operate in a peaking capacity and as a result would not generate power in excess of one-third of its potential el ectric output capacity (less than 2,900 hours in any year). While it is true that a majo rity of simple cycle turbines do not operate in excess of one- third of their annual capacity, there are likely to be specific installations and op erating periods in which a plant would require the flexibility to operate for annual hours in excess of one-third of its potential electric output capacity. Simple cycle units are typically permitted for more hours than the expected operating sc enario in order to address precisely those uncertainties for which they are in stalled. This may be especially true when simple cycle units are increasingly us ed to support renewable generation. As a result, it is likely that utilities wil l simply forgo ordering many simple cycle gas turbines because accepting a permit re striction of 2,900 hours would not fit with operational plans and cost needs. The final rule should include both the simple cycle definition and the specific si mple cycle exemption in order to ensure that new simple cycle units can prov ide the needed operati onal flexibility.

E. The proposed range of 950 to 1,100 lb/MWh does not reflect BSER for simple cycle turbines.

As noted above, the simple cycle ex emption is essential because of the critical role these units pl ay in electric grid reliabi lity. In addition, EPA faces significant legal constrai nts in defining simple cycle units as affected units.

Section 111 of the Clean Air Act r equires EPA to develop a “standard of performance” that reflects the degree of emission lim itation achievable through the application of BSER, taking into account the cost of achieving such reduction and any nonair quality health and envir onmental impact and energy requirements

that the Administrator determines has been “adequately demonstrated”. 17 In developing the standard, EPA reviewed several natural gas- and coal-fired technologies and controls, including NGCC, supercritical coal-fired boilers, and

CCS. 18 EPA did not evaluate, nor has it found that this proposed standard is adequately demonstrated by, simple cycle turbines. 19

16 77 Fed. Reg. at 22,431-32.

17 Clean Air Act §111(a)(1)

18 77 Fed. Reg. at 22,417 -18.

19 One example of a unit that would be adversely affected is a unit being installed to meet anticipated electricity demand growth in Florida. GE EFS Shady Hills is developing a 400 MW expansion project at adjacent to the Shady Hills power plant that will utilize two new GE 7FA.05 simple cycle combustion turbines. EFS Shady H ills was issued a PSD permit on April 6, 2012, and the company is in the process of applying to EPA Region IV for a GHG BACT determination. EFS Shady Hills expects to receive a GHG BACT det ermination by Q2 2013 or sooner, and could potentially start construction on the expansion project as early as Q4 2013.

Page 16 of 28Although the proposed standard may be ac hievable by some of the most efficient simple cycle turbines under optim um load and ISO conditions, a variety of real world operating fa ctors make the standard unac hievable. Simple cycle turbines critical role as peak and back up power units mean t hey often operate at reduced loads and are called upon to quickly ramp up and down production. Operation at reduced loads is less efficient for any unit. For example, while a full load can achieve 43 percent efficiency, operation at 50 percent load can reduce efficiency to 39 percent and increase carbon emissions by 10 percent. Similarly, load cycling can also lead to inefficienc ies. The performance of simple cycle units is also decreased when they oper ate on backup oil during times when natural gas is unavailable.

If EPA were to remove the simple cycle turbine exemption or impose an operating hour restriction, EPA would be required to establish a separate standard for simple cycle units that reflec ts day-to-day in-use performance of an array of simple cycle units.

F. The simple cycle turbine exemption does not provide an incentive to install simple cycle in place of NGCC.

The proposal also requests comment on whether the simple cycle exemption would provide a “perverse incentive” to build simple cycle units in lieu

of NGCC:

We are also requesting comment on whether the exemption would provide a perverse incentive to bu ild less efficient simple cycle

combustion turbines in order to avoid applicability with the proposed rule. While few existing simple cycle turbines presently generate greater than 1 ⁄ 3 of their potential electric output for sale, we are requesting comment on whet her the exemption for simple cycle turbines would result in t he greater use of simple cycle turbines for intermediate load appl ications when more efficient combined cycle facilities would have otherwise been built. 20

There is no reasonable basis to concl ude that the exem ption for simple cycle turbines would incentivize parties to install simple cycle turbines in place of NGCC. Grid demands and energy mark et needs will dictate the technology choice. There are a range of factors that influence specific gas turbine technology choice, including, but certainl y not limited to, ov erall energy demand, demand load profile, demand variability (s easonal, daily, and instantaneous variability), renewable penetrations, fuel av ailability, transmission constraints, and siting constraints. NGCC units ar e more efficient and will remain the technology of choice for intermediate and base load applications. In contrast, simple cycle units used to support r enewable and to provide needed operational flexibility to the grid will fu lfill an important ro le that cannot be cost-effectively met

20 77 Fed. Reg. at 22,432.

Page 17 of 28with NGCC. As a result, a reasonable and achievable emission requirement for NGCC will not provide a disincentive for NGCC plant installation or an incentive for simple cycle installation. 21

G. The simple cycle exemption will not delay the installation of the heat recovery steam generator portion of NGCC.

The proposed rule also seeks comm ent on whether ex empting simple cycle units will encourage plant owners to delay installing the heat recovery generator to their NGCC units:

In addition, it is our understanding that combined cycle facilities are sometimes built in stages with the combustion turbine engine installation occurring first and th e heat recovery steam generator being installed in later years as electricity demand increases. We are requesting comment on w hether the exemption would potentially delay the installati on of the heat recovery steam generator portion of new combined cycle facilities. 22

The simple cycle exemption should not delay the installation of the heat recovery generator. The real value of NGCC is the fuel savi ngs and efficiency realized when compared to electricity produced from simple cycle units. In the daily operation of electric generati ng plants, this is a sufficiently significant incentive to

ensure use of NGCC whenever a fuel savings and hi gher efficiency can be realized in electricity production. Giv en the significant adv antages of NGCC in saving fuel and lowering costs, the simp le cycle exemption wi ll not delay the installation of the heat recovery steam genera tor. This is especially true if EPA sets a appropriate emission level for NGCC units of 1,100 lbs/MWh that reflects the daily operational conditions of NG CC units. A tighter standard may have the perverse effect of encouraging greater use of simple cycle which would increase

CO 2 emissions overall.

H. NGCC plants with a by-pass stack must not be subject to the standard when operated in simple cycle mode.

The proposal defines simple cycle and combined cycle units but does not recognize that units may be installed with bypass stacks that are capable of operating in either simple or combined cycle mode. Operation in simple cycle mode may be dictated by electric gener ation demands for flexible power generation or to allow gas turbine operation during periods while the steam

21 For today’s combined cycle with a bypass st ack, simple cycle operation is much less economical to operate in steady state mode and facilities tend to operate in combined cycle mode with the simple cycle mode as an option fo r increased flexibility when demanded and increased reliability in the event the steam cycle is not av ailable Permitting scenarios are unlikely to permit unlimited operation of a combined cycle unit in simple cycle mode ( e.g., the same amount of fuel would be required to generate 120 MW in simp le cycle mode that c ould generate 180 MW).

22 77 Fed. Reg. at 22,432.

Page 18 of 28turbine bottoming cycle is unable to operate, such as during maintenance operations. Periods in which a plant wit h a bypass stack operat es in simple cycle mode (when the gas turbine exhaust gas bypasses the heat recovery steam generator), must be treated as simple cycle operation and be exempt from the

emission standard. EPA coul d implement this recomme ndation by amending the definition of “simple cycle turbine” as follows:

Simple cycle combustion turbine means a stationary combustion

turbine that which [sic] does not recover heat from the combustion turbine exhaust gases for purposes other than enhancing the performance of the combustion turb ine itself. A combined cycle turbine shall be considered a simple cycle turbine when operating in simple cycle mode by bypassing the heat recovery steam generated through use of a bypass stack.

V. While Carbon Capture Is Achievable Now, EPA Should Provide Flexible Compliance Periods to Re duce Uncertainties Related to Sequestration That May Prevent Investment and Technology

Advancement.

As carbon sequestration technologies are being developed, flexibility in the annual compliance period should be provided to assi st units in dealing with

fluctuations in market demand for CO 2 . The proposed rule provides a 30-year compliance period for sources which will ut ilize a CCS system. These units must meet an average of 1,800 lb s/MWh each year for the first ten years from issuance of the rule and an average of 600 lbs/MWh each year for the remaining 20 years of the 30-year co mpliance period. The unit must meet 1,000 lbs/MWh over the 30-year averaging period. 23

Current CO 2 sequestration and utilization technologies have an uneven demand that prevents a carbon capture plant from achieving a predictable schedule of geologic dispositio n of its captured carbon. For example, the CO 2 demand and capacity at enhanced oil recovery production facilities is likely to vary over the period of recovery oper ations. An oil field’s demand for CO 2 from a

dedicated CO 2 capture plant will be highest during the early years of operation

and fall off as CO 2 emerges and the recycling of CO 2 increases. Enhanced oil recovery operations also will typi cally alternate usage of water and CO 2 to optimize recovery and CO 2 storage capacity. Absent the option for an extended compliance averaging period, EGUs or combined heat and power (CHP) EGUs will not have flexibility to continue revenue-generating operation while remaining in compliance.

Because of these practical, real worl d constraints, EPA should provide the option for flexible compliance periods that are:

23 77 Fed. Reg. at 22,436 (Propo s ed Rule 40 C.F.R. § 60.5520(b)).

Page 19 of 281) based on multi-year commerc ial arrangements between the CO 2 producer and offtaker; and 2) will meet the lb/MWh r emission standard over t he contract period.

For example, such approval should allow for an EGU to operate at a CO 2 emissions intensity lower than proposed 1,0 00 lb/MWh for an initial portion of the compliance period followed by potential periods of operation at an annual intensity that may exceed 1,000 lb/MWh. This woul d recognize the injection profiles for enhanced oil recovery projec ts that exhibit reduced demand as CO 2 recycling increases. For compliance/cont ractual periods that are less than 30 years, an EGU woul d be required to enter in to additional sequential CO 2 offtake

contracts. As new contra ctual obligations are entered into for the offtake of CO 2 , the compliance period will be extended until the end of the 30-year period is

reached.

VI. EPA Should Amend the Key Provis ions of the Rule to Ensure that IGCC Can Be Used Under the Alternative Compliance Option.

A. EPA should clarify the defini tion of integrated gasification combined cycle electric generating unit to include the heat recovery steam generator.

The proposed rule defines an IGCC EGU as:

Integrated gasification combined cycle electric utility means a An electric utility combined cycle ga s turbine combined cycle that is designed to burn fuels containi ng 50 percent (by heat input) or more solid-derived fuel not meeting the definition of natural gas. The Administrator may waive t he 50 percent solid-derived fuel requirement during periods of th e gasification system construction or repair. No solid fuel is di rectly burned in the unit during operation. 24

This definition may be read to refer only to the gas turbine and not the integrated HRSG and steam turbine. Excluding the steam turbine’s power output from IGCC output calculations wo uld reduce gross output of the unit by approximately 35 percent resulting in an increased rate of CO 2 emissions in lb/MWh without increasing actual CO 2 emissions. This would result in artificially low efficiency numbers for IGCC gas turbines units that share a common steam turbine. The

definition of IGCC should be corrected to read:

Integrated gasification combined cycle electric utility means an electric utility combined cycle gas turbine combined cycle that is designed to burn fuels containi ng 50 percent (by heat input) or more solid-derived fuel not meeting the definition of natural gas.

24 77 Fed. Reg. at 22,440 (Propo s ed Rule 40 C.F.R. § 60.5580).

Page 20 of 28The Administrator may waive the 50 percent solid-derived fuel requirement is waived during periods of the gasification system
startup, construction

, or repair and during periods when the transport and storage systems for captured CO 2 are not available

. No solid fuel is directly burned in the unit during operation.

Gas turbines employed in IGCC plants have dual fuel capabilit y. This means they are able to fire on either 100% coal-derived synthesis gas (syngas) or natural gas, or combinatio ns thereof (co-firing) from 10% to 100% of either natural gas or syngas. With respect to startup, IGCC turbines require that only natural gas be used up to approximately 30% of full load before commencement of firing on syngas. This operational rest riction is necessary to prevent damage

from combustor flashback and flame-hol ding at the combustor head that can occur due to the hydrogen in syngas.

The capability of IGCC turbines to us e 100% natural gas also provides a unique ability for an IGCC plant to contin ue power generation in the event that disposition of its captured CO 2 to either sequestration or enhanced oil recovery facilities is either signific antly curtailed or interrupted. When operating on natural gas, the IGCC combined cycle is able to achieve the CO 2 standard for conventional natural gas co mbined cycle units. Including this as an acceptable mode of operation in the rule will help to mitigate some of the risks of CCS that are external to the IGCC plant itself wh ile assuring compliance with the rule's performance standard.

The IGCC definition may al so be read to refer to only one turbine. IGCC turbines, similar to NGCC units, are co mmonly configured to have multiple gas turbines sharing a common steam turbine. Under Subpart KKKK, emissions from multiple gas turbines sharing a co mmon steam turbine are combined for compliance determinations. The proposed rule should contain a similar provision

for IGCC and NGCC units. A section shou ld be added to 40 C.F.R. § 60.5520 stating:

Multiple gas turbines with separate exhaust stacks sharing a

common steam turbine shall determine compliance with the standard by measuring the combined emissions from their stacks, or fuel usage.

B. EPA should also amend the applicability requirements for the alternative compliance option under proposed § 60.5520(b) to specifically allow IGCC units as they are defined in the rule to qualify.

As currently drafted, the alter native 30-year compliance option under proposed § 60.5520(b) would make IGCC units, as proposed to be defined, ineligible for this alternative compliance option. IGCC is defin ed under proposed

Page 21 of 28§ 60.5575 as a unit "designed to burn fuels containing 50 percent or more solid

derived fuel not meeting the definition of natural gas." The preamble refers to IGCC as an option that may be used to meet the standard for the first ten years of the 30 year compliance perio d that use solid derived fuel or that burn natural gas along with coal a nd solid derived fuels. 25 This statement, however, is not consistent with the provisio ns in the proposed rule gover ning the 30-year option. Specifically, the alternative comp liance option provided under proposed § 60.5520(b) would only allow IGCC utiliz ing CCS if the affected EGU uses “ coal or petroleum coke for fuel and is designed to allow installation of a CCS system."

As noted above, this appl icability requirement conf licts with the definition of IGCC as a unit that is “designed to bur n fuels containing 50 percent or more solid derived fuel not meeting the definition of natural gas.” As a result, many

IGCC units that burn some nat ural gas or solid derived fuels would seem to be ineligible for the 30-year alternative compliance option. Proposed § 60.5520(b)

should therefore be revised to allow IGCC units that burn solid derived fuel and allow for the use of up to 50 percent natural gas.

VII. The Final Rule Should Include a Cumulative Rolling Sum That Will Accurately Represent Emissions a nd Proportionately Weigh Periods of High Emissions and Low Generation.

The proposed rule requires so urces to sum the hourly CO 2 emissions for the operating month and divide by the total hourly gross energy output for that

month. A more accurate representation of the CO 2 emission performance of an EGU is calculated through a rolling 12 mo nth sum that measures compliance at the end of each month by summ ing all emissions (lbs CO 2 emitted) over the prior 12 months, and dividing by t he total generation (MWh) ov er the same period. This calculation method will provi de a true representation of the annual performance of an EGU by appropriately we ighting periods of lower generation
output.

As proposed, the monthly qu otient is added to t he previous 11 operating month quotients and divid ed by 12 to determine a 12 month rolling average. 26
This proposed calculation will weig ht each monthly average evenly and potentially result in significant distorti ons to the emissions performance of the EGU by giving disproportionat e weight to high emission /low generation periods. For example, a plant may run for onl y 2 hours in a given month with a CO 2 emission level of 1200 lb/MWh CO 2 and the following mont h run continuously each day for a total of 720 hours of oper ation and have an emission level of 950 lb/MWh. Under the proposed rule, this woul d result in an inaccurate average of 1075 lb/MWh for that 2 month period. If the average were calculated by adding

the total lbs of CO 2 and dividing by the total MWh ov er the two month period, the

emission rate would be 951 lb/MWh. This value represents the true average of

25 77 Fed. Reg. at 22,406.

26 77 Fed. Reg. at 22,438 (Propos ed Rule 40 C.F.R. § 60.5540).

Page 22 of 28this operating period. The 12 monthly rolling CO 2 average must be revised to be

calculated based on the total CO 2 emissions divided by the total MW-hrs of generation calculated on a monthly basis.

VIII. A Gross Output Standard Shoul d Be Adopted Over a Net Output

Standard.

EPA proposes the use of a gross output based emissi on standard, but solicits comments on a net output bas ed standard. EPA should adopt a gross output standard over a net output standard for several reasons: With respect to reducing regulatory reporting burden, a net basis would be inconsistent with the gross output reporting requirements for CO 2 under 40 C.F.R Part 75. Also, at this stage of CCS developm ent preceding first-of-a-ki nd deployment of integrated carbon capture in coal plants, ther e are many candidate technologies and process configurations that will have varyin g net-to-gross output ra tios. If it were to adopt a net output standard and not j eopardize the advancement of CCS, EPA

would need to accommodate the various capture technologies, types of coal, types of coal plants and other environm ental factors that determine net output.

Given that there are no c oal plants in operation with integrated carbon capture, there is no data to fully va lidate net-to-gross corrections or especially how these will change over time.

Differences in basic technology and pr ocess configurations will require either a burdensome case-by-case det ermination of net-to-gross output corrections to derive appropriate net-bas ed standard levels, or alternatively, identifying and segregating auxiliary loads between those that are, or are not, used to generate additional output or enha nce performance. An example of the latter would be the apportionment of ox ygen separation load to a Claus unit producing sulfur or sulfuric acid as a useful byproduct in an IGCC plant. Difficulty in apportionment will be co mpounded in cases where IG CC is configured as a poly-generation unit producing a saleable fuel or chemic al product in addition to providing electrical output to the grid. Moreover, the gross methodology does not factor into the emissions rate added pa rasitic loads from emissions control

retrofits. In addition to avoiding the complexity and cost of installing and maintaining remote power metering equi pment, gross output is conveniently measured, monitored and cons istent with reducing regulatory reporting burden.

IX. Because Fuel Monitoring M eets Clean Air Act Compliance Requirements and Does Not Involve the Measurement Uncertainties

and Costs of Continuous Emission M onitors, the Rule Should Adopt Fuel Sampling as an Indepe ndent Compliance Method.

Proposed § 60.5540 provides two opti ons for demonstrating compliance and determining excess emissions with the CO 2 emissions limit. Under proposed § 60.5540(a) a facility may use a CO 2 continuous emissions monitoring system (CEMS) and under proposed § 60. 5540(b), a facility may use “fuel sampling” to

Page 23 of 28demonstrate compliance using a monthly F fa ctor and monthly fuel consumption.

EPA seeks comment on w hether the use of CO 2 continue emission monitoring systems (CEMS) including stack gas flow rate monitoring shou ld be required for all new affected facilities, including those burning exclusively natural gas and/or

distillate oil. 27

The fuel sampling approach should be ma intained as an option in the final rule. Fuel sampling is an a ccurate alternative to CEMs and should be adopted.

In its Mandatory Reporting of Greenhouse Gases rulemaking, EPA found that CEMS were not required to provide sufficien tly accurate data, stating that the rule provided a “relatively high degree of certai nty” while also ta king “advantage of existing practices at facilities.” 28 Thus, not requiring CEMS for all units subject to

this rule would be consistent with EPA ’s practice under other regulations. Moreover, the determination of CO 2 emissions through monitoring of fuel combustion and periodic fuel sampling is actually far superior to CEMS for

several reasons. The calculation of CO 2 emissions through the measurement of fuel consumption is far more accurate than corresponding measurements using a CEMs system because it measures fuel fl ow and assumes all carbon in the fuel

is oxidized to CO 2 . The calculation of CO 2 emissions is a stoichiometric

calculation of each carbon enter ing the equipment in the f uel will be emitted from

the stack as CO 2 . In addition, plant owners and operators have a strong incentive for accuracy in measuring f uel because plants are charged for fuel consumption.

In contrast, with CEMs there are i nherent calculation uncertainties, especially during periods of transient operation ( i.e., starts, shutdowns, and rapid load changes). To develop an accurate mass emission rate estimate, CEMs

must measure CO 2 concentration and volumetric flow rate of the gas in the exhaust stack. Most commercially av ailable CEMS systems generate data on a one-minute average basis, and under current EPA CEMS Performance Specifications, only one va lid reading is required ev ery fifteen minutes. Plant operational parameters, especia lly for NGCC plants, vary significantly within a 15 minute, or even 1 minute period, dat a generated during these events will be highly suspect and could have significan t, and unquantifiable, uncertainty. Use

of CO 2 CEMS also adds another monitoring system which results in additional cost and equipment to main tain and routinely certify. The measurement of CO 2 based on fuel flow is simpler and inheren tly more accurate because there are less sources of uncertainty.

We also note that proposed § 60.5535(c) needs clarification. It reads:

If you determine the your affected EGU’s CO 2 mass emissions rate by monitoring fuel combusted in t he affected EGU and periodic fuel

27 77 Fed. Reg. 22,430.

28 Mandatory Reporting of Greenhouse Gases, Proposed Rule, 74 Fed. Reg. 16,448, 16,475 (Apr. 9, 2010).

Page 24 of 28sampling as allowed under § 60. 5525(c)(2), you must use the procedures specified in 40 CFR part 75, appendix G. 29

Although this section seems to allow fuel consumption monitoring, for authority it refers to § 60.5525(c)(2) which does not exist in the proposed rule. EPA should clarify this section of the rule to confirm that fuel consumption monitoring is an acceptable approach.

X. EPA Should Adopt an Exempti on for Combustion of Waste Fuels

Such as Blast Furnace Gas a nd Refinery Fuel Gas.

Included in the definition of “gaseous fuel” are refi nery fuel gas, process gas, and coke oven gas. 30 Given the extensive programs the agency has adopted to encourage the recovery of such gases and use for power generation, it would be inappropriate for EPA to subjec t these fuels to the requirements of this rule. EPA should adopt an exclusion for any process byproduct gases that are not produced for the purpose of electr ical generation, including, but not limited to refinery fuel gas, process gas, bl ast furnace gas, landfill gas, and cokeoven gas.

These “waste” gases are generated as par t of industrial processes or from natural decomposition in landfills and, if not combusted for energy, would be alternately disposed of in some m anner—most likely through flaring. The utilization of this same fuel in a gas turbine to generate electricity would result in

the same CO 2 emissions as alternate combus tion but instead provides the benefit of utilizing this the rmal capacity produce energy. Further, this generation would displace the need for other thermal electric generation resulting in a net

reduction in CO 2 emissions. 31

We note that process gases are co mmonly co-fired with natural gas.

Installations in which there is not a sufficient supply of process gas, or, where the process gas alone does not have sufficient energy density. Alternately, a process gas may be fired in supplem ental duct burners to enhance steam production. EPA could allow for the exem ption of process gas during co-firing and provide for compliance demonstration th rough fuel sampling. Compliance of

CO 2 emissions during co-firi ng should be based solely on the natural gas usage and could be readily demonstr ated through natural gas fuel consumption. As noted, such an approach woul d promote beneficial us e of an otherwise waste fuel, consistent with historic EPA’s policies on waste fuels.

29 77 Fed. Reg. at 22,437 (Propos ed Rule 40 C.F.R. § 60.5535(c)).

30 77 Fed. Reg. at 22,439 (Proposed Rule § 60.5580).

31 Fuels specifically created from a process for the purpose of gener ating electricity, such as in the case of IGCC, would be included.

Page 25 of 28XI. EPA Should Provide for Compliance Calculated as an Average of All New Electric Generating Un its at a Single Plant.

GE recommends the emission limitation be applied as an average of all electric generating units at a single in stallation. The av erage emission limit across units would provide additional compli ance flexibility. A unit average will also simplify the determination for combi ned cycle installations in which multiple gas turbines with their associated heat re covery boilers supply steam to a single steam turbine. For these installations, the total site electrical output would be the combined output from each ga s turbine and the steam tu rbine. The limit must apply to the average of all gas turbine st acks to simplify the allocation of the steam turbine output in determining a per unit emission compliance value.

XII. CHP Facilities Where Useful The rmal Output Accounts for 20 Percent of the Total Useful Output S hould Be Excluded from This Rule.

The proposed exemption of CHP units would recognize the environmental

benefits of CHP. CHP units are environm entally beneficial and this exemption would encourage new units wit hout adversely affecting CO 2 emissions. CHP plants operate in a similar manner to the NGCC units. The thermal energy from CHP plants can be diverted to either energy production (kWh) or to thermal loads (heating and cooling). The regulatory challenge of quantifying the equivalence of the thermal energy used in terms of kWh to determine compliance with the proposed NSPS would be immens e and impractical. Because of that complexity, CHP and cogeneration facilit ies should be exempt.

XIII. The Pollution Control Project Exclusion Should Not Be Eliminated.

EPA solicits comment on eliminating t he pollution control project exclusion under the NSPS, 77 Fed. Reg. at 22,421, in light of a D.C. Circuit decision under

the New Source Revi ew/PSD programs, New York v. EPA , 413 F.3d 3, 40 (D.C. Cir. 2005). EPA should not elim inate this exclusion for NSPS purposes. As the Supreme Court has noted, the purposes of the NSPS and NSR/PSD programs are different from one another, Environmental Defense v. Duke Energy Corp

., 549 U.S. 561, 576-81 (2007), and the term modification can be defined differently in these programs. The exclusion ensur es that changes that reduce emissions and provide significant environmental benef its are not discour aged because of a minor collateral increase in another pollutant.

The New York case did not indicate that t he Court there even considered the NSPS program and its purposes and no one challenged the exclusion in the

Part 60 General Provisions or in numer ous NSPS rules. Such challenges needed to be brought within 60 days from prom ulgation or from the date that new grounds arose. No one brought such a cha llenge and industry has relied on this exclusion for many years. Because this provision exclusion remains sound both from a policy and from a legal pers pective. It should not be changed.

Page 26 of 28XIV. The Proposed Rule should be Revised to Include Language Clarifying that the Final Standard Included in this Rule for NGCC Does Not Apply to PSD Permits for Simple Cycle Units.

NSPS standards are generally consider ed the “floor” for PSD permits. EPA should include language in the rule to ensure that the regional permitting authorities are not interpre ting the standard as a limit for simple cycle turbines. The comments regarding simple cycle turb ines have created ambiguity in the marketplace, leading to uncertainty about what standards will apply for simple cycle. EPA needs to state clearly that simple cycle turbines are excluded from

this rule.

XV. EPA Should Include Explicit Regulatory Language in Part 52 PSD Regulations to Clarify that Regulation of CO 2 Under Section 111 Triggers the Tailoring Rule GHG Emission Thresholds.

The proposed rule regulates GHG fo r the first time under CAA § 111. Under EPA’s current interpretation of the CAA, this action triggers the applicability of PSD to GHG emissions and potentially canc els the increased GHG applicability thresholds enacted under the Tailoring Rule. PSD regulations define the term “major stati onary source” as a “stationary source of air pollutants which emits, or has the potential to emit, 100 [or 250] tons per year or more of any regulated NSR pollutant.” 32 The regulatory definition of NSR pollutant contains four triggers: 1) any pollu tant or precursor with a NAAQS; 2) any pollutant subject to a standard promulgated under § 111 ; 3) any Class I or II substance under Title VI; and 4) any pollutant subject to regulation

. 33 Only the fourth trigger incorporates the Tailori ng Rule “subject to regulation” language raising the GHG threshold to 100,000/75,000 tpy of GHG.

EPA believes that a statement included in the preamble to the Tailoring Rule extends the increased GHG thresholds to the § 111 trigger. This statement explains that the Tailoring Rule thre sholds apply to all “major stationary source[s]” not just the fourth pr ong of the NSR pol lutant definition. 34 While EPA proposes to revise the NSPS regulations to confirm this in terpretation, these regulations were not included in the proposed GHG NSPS standard. 35 EPA advises states with approved GHG SIPs to take the position that their current SIP incorporates EPA’s Tailoring Rule interpretation. Just in case, EPA expects to proceed with a separate rulemaking to narro w approval of SIPs to exclude GHGs below the 100,000/75,000 tpy threshold. 36

32 40 C.F.R. 51.166(b)(1)(i)(a).

33 40 C.F.R. 51.666(b)(49).

34 77 Fed. Reg. at 22,429 (Citing Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule, 75 Fed. Reg. 31,514, 31582 (Jun. 3, 2010)).

35 Id. at 22,429.

36 Id.

Page 27 of 28To remove any legal uncertainty regar ding the application of the Tailoring Rule, EPA should include regulatory l anguage in the Part 52 PSD regulations that the Tailoring Rule threshol ds apply to the regulation of CO 2 triggered by CAA § 111.

CONCLUSION

GE appreciates the opportunity to provide these comments and seeks to work with the Agency to achieve a final ru le that promotes efficient electric generation using advanced technologies that meet the full range of the country’s electric generation needs. Please contact Larry Boggs at larry.boggs@ge.com or 202.637.4126 with any questions regarding these comments.

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