The potential cost savings of implementing an inter-utility NO{sub x} trading program

Conference · Sun Dec 31 04:00:00 EST 1995

OSTI ID:271872

Siegel, S; Kalagnanam, J ^[1]

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1. 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 Reasonably Available Control Technology 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, the authors have used a combinatorial optimization approach to identify boiler retrofits and operating parameters which yield efficient (i.e., the most cost effective) NO{sub x} abatement. In the 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. The authors 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. The authors 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: 271872
• Report Number(s): CONF-950196--
• Country of Publication: United States
• Language: English

Related Subjects

20 FOSSIL-FUELED POWER PLANTS
29 ENERGY PLANNING, POLICY, AND ECONOMY
AIR POLLUTION ABATEMENT
BOILERS
CLEAN AIR ACTS
ELECTRIC UTILITIES
IMPLEMENTATION
NITROGEN OXIDES
TECHNOLOGY ASSESSMENT
WASTE MANAGEMENT