The U.S. Environmental Protection Agency is evaluating a petition by Dakota Spirit AgEnergy for approval of a “fuel pathway,” which is basically how to account for the greenhouse gas emissions related to its corn ethanol plant under the Renewable Fuels Standard (RFS) program.
The corn ethanol plant, located in North Dakota, would import process steam from a combined heat and power (CHP) system located offsite. EPA said in a Sept. 11 Federal Register notice that it is inviting comment until Oct. 11 on the application of a certain methodology for allocating greenhouse gas (GHG) emissions for the steam and on the feasibility and appropriateness of using this allocation methodology for other similar CHP configurations under the RFS program.
As part of changes to the RFS program adopted in March 2010, EPA specified the types of renewable fuels eligible to participate in the RFS program through approved fuel pathways. A table in the RFS regulations lists three critical components of an approved fuel pathway: fuel type; feedstock; and production process. Each specific combination of the three components, or fuel pathway, is assigned a renewable fuel category for use of the fuel in the RFS program. EPA may also independently approve additional fuel pathways not currently listed in the table for participation in the RFS program, or a third party may petition for EPA to evaluate a new fuel pathway.
EPA received a petition in October 2011 from Dakota Spirit AgEnergy requesting that EPA evaluate a new fuel pathway’s lifecycle GHG reduction and provide a decision on the renewable fuel category for which the new pathway may be eligible. Dakota is proposing to build a dry-mill corn ethanol plant in Spiritwood, N.D., with a nameplate capacity of 65 million gallons of ethanol per year.
Dakota’s proposed process is unlike those used in pathways modeled for the 2010 RFS rule in that it plans to import steam from the adjacent Spiritwood Station coal-fired power plant, operating in a CHP mode. EPA noted that it has not previously considered the treatment of steam from an offsite CHP plant in a lifecycle emissions accounting analysis under the RFS program. EPA said it is not aware of a previous regulatory context where an allocation approach has been applied to determine emissions associated with steam from an offsite facility.
In the 2010 RFS rule, EPA evaluated a corn ethanol biorefinery that utilized an onsite CHP system as part of the ethanol production process. Dakota’s proposed approach is different in that it plans to import process steam from the adjacent Spiritwood Station.
Spiritwood combusts coal in a circulating fluidized-bed boiler that generates steam at high temperature and pressure. This high pressure steam will be sent through a high-pressure steam turbine (HPST) to produce electricity. The steam will exit the HPST at lower pressure and temperature, at which point some of it will be diverted to the Dakota biorefinery. The remaining steam will be sent through a low-pressure steam turbine (LPST) to produce additional electricity. The steam diverted for use at the ethanol plant will result in less power generated by the power plant, EPA noted. Although the amount of electricity generated is reduced, the total fuel consumed and resulting GHG emissions of the power plant remain unchanged.
EPA prefers ‘work potential’ allocation method
EPA found that currently there is no one recommended allocation method for allocating emissions to the energy outputs (electrical and thermal) from a CHP system. EPA’s review also indicated that the most appropriate allocation method for a CHP system will be dependent on the type of CHP configuration in use, as well as the primary use of the system’s electrical and thermal outputs. Based on the plant configuration presented in the Dakota petition, EPA said it is considering using the “work potential” allocation approach to allocate emissions.
EPA considers the work potential approach to be most appropriate for CHP systems that use heat to primarily produce mechanical work or power, such as at the Spiritwood plant. The work potential approach allocates emissions based on the useful energy represented by electric power and heat. For the configuration presented by Dakota, the method allocates emissions to the extracted steam based on the amount of electricity that the steam would have produced had the steam not been diverted for use at the biorefinery.
“The Spiritwood power plant is designed for the primary function of generating electricity,” EPA noted. “The total emissions at the Spiritwood plant are constant, whether steam is diverted or not. When steam is diverted to the Dakota biorefinery, the emissions associated with the diverted steam and the resulting loss in electricity production is evaluated via the work potential method. We can determine an emission factor for the power plant when it is just generating electricity and not diverting steam to the Dakota biorefinery (i.e., operating in a ‘power only’ mode). The GHG emissions attributed to the extracted steam is determined by estimating the amount of power not generated by the power plant because the steam was diverted from the turbine, and applying the power plant’s ‘power only’ emissions factor to that value. The emission factor is unchanged since the total emissions at the Spiritwood plant are unchanged and only a small portion of the steam energy generated at the power plant is diverted to the biorefinery.”
Under the work allocation approach, the steps are:
- calculate the GHG emission factor for the Spiritwood power plant without any steam extracted;
- determine the amount of electricity that is not generated due to the extraction of steam for the Dakota plant; and
- apply the Spiritwood emissions factor to the amount of electricity not generated due to steam extraction and calculate the associated emissions.
In Dakota’s petition, the company presented an example where the Spiritwood plant generates 92 MW of electric power in power-only mode, but only produces 82 MW of electric power in CHP mode due to the steam extraction. Thus, the steam extraction displaces about 11% of the total power production. Using the work potential allocation method, the extracted steam is allocated 11% of the total emissions from the Spiritwood plant, whereas the remaining 89% of emissions are allocated to electricity production.
EPA said it reviewed other allocation approaches, with the other two most common methods being:
- Efficiency Allocation Method—This method allocates GHG emissions based on the amount of fuel used to produce each final energy stream. Emissions are allocated based on the efficiencies of thermal energy and electricity production, and the emission allocation will vary based on how the electrical and thermal efficiencies are defined. The actual efficiencies of heat and power production are often not clearly defined for CHP systems, and assumed default values are typically used.
- Conversion or Energy Content Method—This variation allocates emissions based on the relative amounts of power and thermal energy output. It makes no allowance for the relative value of the outputs or the relative efficiencies of generation and simply allocates emissions based on the relative energy content of each output.
EPA finds no consensus on the approach to take
The efficiency and energy content allocation approaches are both based on assumptions, either of the efficiencies with which steam and electricity are generated, or on the relative values of energy outputs, EPA wrote. Under these approaches, the emissions allocated to the remaining electricity generation (in terms of lbs/ MWh) at the Spiritwood plant in CHP mode would be lower than the original emissions factor for electricity generated by Spiritwood operating in power-only mode, indicating an over-allocation of emissions to the extraction steam.
“Since CHP system design and operating characteristics vary so widely, leading organizations in this field have not developed a consensus on one preferred allocation method,” EPA pointed out. “The California Air Resources Board issued a technical document as part of its Climate Change Reporting Requirements that reviewed several allocation methods but did not recommend any one allocation method in particular. The Climate Registry (TCR), the former EPA Climate Leaders program, and the GHG Protocol recommend the efficiency method, and that CHP facilities identify actual thermal energy and electricity production efficiencies. In the absence of actual emissions, default efficiencies of 35% for electricity (grid generation efficiency) and 80% for steam (stand alone boiler efficiency) are suggested. Neither the default nor calculated efficiencies appear representative of the Spiritwood operations. However, as stated above, the GHG Protocol also recommends the use of the work potential method if the thermal output of the CHP system is going to be used for mechanical power.”
Spiritwood plant hit by economic downturn
Great River Energy controls the Spiritwood plant and noted on its website that the plant was built late last decade, but a downturn in power demand during construction means it is currently a marginal power source and it does not run. “Great River Energy’s members will again need more baseload electricity in the future, and that will help make Spiritwood Station a valuable long-term investment,” the website added. “This will occur as demand and electricity prices increase via a turnaround in the economy, and as additional markets develop for the available process steam from the plant.”
The website added about the Dakota project, which would help underpin the plant’s long-term operation: “Great River Energy is working to develop Dakota Spirit AgEnergy biorefinery to be located adjacent to Spiritwood Station combined heat & power plant near Jamestown, North Dakota. The biorefinery would utilize steam from Spiritwood Station. The biorefinery is planned in two phases. Phase I would consist of a 65 million gallon per year (MGY) conventional dry mill ethanol plant that uses corn to produce ethanol, corn oil and distillers grains. Phase II would be a 10 MGY cellulosic bolt-on facility that would convert biomass (corn stover and wheat straw) into a variety of higher value energy products including cellulosic ethanol, molasses and lignin pellets.”
The website also noted that the use of biomass as a fuel at Spiritwood has been studied. The plant was originally designed to run on low-Btu North Dakota lignite coal that would be dried and refined using waste heat at Great River Energy’s existing Coal Creek power plant.