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September 14, 2012
GHG allocation for CHP

The use of an off-site combined heat and power (CHP) configuration to provide thermal energy to a planned ethanol production plant in North Dakota has presented the EPA with a unique challenge in determining lifecycle GHG emissions as required by the federal renewable fuels standard (RFS).  The Agency recently announced that it is considering use of the work potential approach to allocate GHG emissions to the imported energy.  The Agency is now requesting comments on the potential for applying the same approach to similar CHP configurations under the RFS program.
Imported steam
In the project, Dakota Spirit AGEnergy is proposing to build a dry-mill corn ethanol plant in Spiritwood, North Dakota.  To qualify as a renewable fuel under the RFS, the lifecycle carbon intensity of the fuel must be 20 percent less than the carbon intensity of a 2005 petroleum-based fuel. The company plans to meet this requirement by importing steam from the adjacent Spiritwood Station coal-fired power plant, which would operate in a CHP mode. 
In the 2010 RFS rule, the EPA evaluated a corn ethanol biorefinery that utilized an on-site CHP system as part of the ethanol production process.  However, the EPA says it has not previously considered the treatment of steam from an off-site CHP plant in a lifecycle emissions accounting analysis under the RFS program. 
To determine the emissions associated with the extracted steam, the total emissions of the Spiritwood power plant must be allocated to the power plant’s power production and to the steam extracted for use at the biorefinery.  However, EPA’s review of research into GHG allocations for a CHP plant performed by several organizations (e.g., the World Business Council for Sustainable Development and the Western Climate Initiative) indicated that there is currently no one recommended 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 methodology for a CHP system is dependent on the type of CHP configuration in use, as well as the primary use of the system’s electrical and thermal outputs.
Work potential approach
Based on the plant configuration proposed by Dakota Spirit, the EPA says the work potential approach to allocating emissions appears most appropriate.  The approach is summarized in three steps:

  • Calculate the GHG emissions factor for the Spiritwood power plant without any steam extracted.
  • Determine the amount of electricity that is not generated because of the extraction of steam for the Dakota plant.
  • Apply the Spiritwood emissions factor to the amount of electricity not generated because of steam extraction and calculate the associated emissions.

According to an example provided by Dakota Spirit, the Spiritwood plant generates 92 megawatts (MW) of electric power in power-only mode, but produces only 82 MW of electric power in CHP mode as a result of the steam extraction.  Using the work potential allocation method, the extracted steam is allocated 11 percent of the total emissions from the Spiritwood plant, whereas the remaining 89 percent of emissions are allocated to electricity production.  Using this example, the EPA found that the process steam has an emissions factor of 53,175 grams CO2-equivalent per 1 million Btu steam.
               EPA’s notice describes the work allocation method in more detail and also requests comment on other allocation approaches that are summarized.
               The Agency’s request for comment was published in the September 11, 2012, FR.

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