The Impact of Air Quality Regulations on Distributed ... - NREL

Most <strong>of</strong> these issues were identified in state
“minor source” permitting in nonattainment
areas. While nonattainment areas constitute a
small geographic fraction <strong>of</strong> the United
States, they comprise major markets for DG.
Moreover, the importance <strong>of</strong> these permitting
practices is expected to expand for at least
two reasons:
• <strong>The</strong> areas <strong>of</strong> nonattainment will be
expanded to cover more <strong>of</strong> the nation
over the coming years with the
implementation <strong>of</strong> the new 8-hour
ozone and fine particulate matter
standards.
• With the expected dramatic increase in
the use <strong>of</strong> DG, environmental
regulators have already confirmed
their increasing concern for
developing new or additional
approaches to the environmental
regulation <strong>of</strong> DG. 7
All these issues are discussed in the following
chapters.
1.4 Key DG Applications and
Technologies
This analysis identified three DG
applications/technologies for which air
quality regulation is particularly ineffective in
recognizing the environmental benefits and
unique characteristics <strong>of</strong> DG. <strong>The</strong> treatment
<strong>of</strong> these applications and technologies is the
primary focus <strong>of</strong> this report.
• CHP applications—CHP is perhaps
the most readily available and costeffective
means <strong>of</strong> reducing emissions
and energy consumption through
increased energy efficiency (see
Section 2.2). However, because CHP
involves multiple energy applications
and displaces multiple conventional
7 “Proceedings Energy & the Environment: <strong>The</strong> Second
National Conference <strong>of</strong> Policy Makers Working Together.”
September 24-27, 2000, St. Louis, MO. See
http://www.naseo.org/events/other/stlouis/
3
energy generating sources,
conventional air quality permitting
does not recognize the environmental
benefits that CHP provides. Ensuring
that air quality permitting recognizes
and encourages CHP is an important
policy goal.
• Applications that use waste or byproduct
fuels—Many DG technologies
use waste or by-product fuels that are
available at the point <strong>of</strong> use. Using
waste fuels is valuable from an energy
perspective. In addition, using waste
and by-product fuels to produce useful
output through DG <strong>of</strong>ten replaces
waste incineration that produces air
emissions with no useful output. <strong>Air</strong>
quality regulations <strong>of</strong>ten do not give
credit for this emission displacement
and thus do not accurately reflect the
benefits <strong>of</strong> using these fuels for DG
technologies.
• Technologies with inherently low
emissions—<strong>The</strong>re is widespread
agreement that it is economically and
environmentally preferable to avoid
creating emissions (pollution
prevention) rather than cleaning them
up after they are created. Most DG
technologies are designed to be
inherently low emitting because the
cost and complexity <strong>of</strong> add-on
controls makes them impractical or
uneconomical. However, many air
quality regulations have traditionally
focused on add-on emission control
technologies and do not yet recognize
inherently low-emitting technologies.
This approach is counterproductive
and at odds with stated national
policies regarding energy efficiency
and pollution prevention. Recognizing
the value <strong>of</strong> inherently low-emitting
technologies is an important policy
goal and is important to the economic
viability <strong>of</strong> DG technologies.