The potential cost savings of implementing an inter-utility NO{sub x} trading program
- Carnegie Mellon Univ., Pittsburgh, PA (United States). Dept. of Engineering and Public Policy
Technology based standards such as RACT, which require the installation of a (R)easonably (A)vailable (C)ontrol (T)echnology on a boiler by boiler basis have been the dominant factor driving electric utility NO{sub x} compliance plans. In this paper, the authors examine the cost savings of implementing NO{sub x} trading, an alternative market based strategy for reducing the emissions of nitrogen oxides (NO{sub x}) to achieve NO{sub x} reduction goals set under Title IV of the 1990 Clean Air Act. In order to estimate the potential cost savings of inter-utility NO{sub x} trading, they use a combinatorial optimization approach to identify boiler retrofits and operating parameters which yield efficient (i.e., the most cost effective) NO{sub x} abatement strategies. In their formulation, annual emissions at individual boilers which are expensive to abate may exceed RACT levels by up to a factor of two thus allowing for trades with boilers which can abate in a more cost effective manner. They constrain total emissions in a trading region to be at or below the level obtained had all the boilers adopted RACT. Increasing the flexibility with which trades can occur has two main effects: (1) the cost effectiveness of meeting an aggregate reduction goal increases and (2) the spatial distribution of emissions shift relative to what it would have been under a strict RACT based compliance strategy. They estimate the magnitude of these effects for two Eastern electric utilities making intra- and inter-utility NO{sub x} trades. Results indicate that the cost effectiveness of meeting RACT level reduction can be increased by as much as 38% under certain trading regimes.
- OSTI ID:
- 103792
- Report Number(s):
- CONF-950414-; TRN: 95:020064
- Resource Relation:
- Conference: 57. annual American power conference, Chicago, IL (United States), 18-20 Apr 1995; Other Information: PBD: 1995; Related Information: Is Part Of American Power Conference: Proceedings. Volume 57-II; PB: 914 p.
- Country of Publication:
- United States
- Language:
- English
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