Greenhouse Gas Emissions: Trouble Brewing or a Golden Opportunity? Texas Association of Clean Water Agencies April 3, 2009

Transcription

1 Greenhouse Gas Emissions: Trouble Brewing or a Golden Opportunity? Texas Association of Clean Water Agencies April 3, 2009

2 Agenda 1. Climate change and greenhouse gas emissions a. What it s all about b. Why we care 2. What does this mean for utilities? 3. Cap-and-trade programs 4. The opportunity 5. How to reduce GHG emissions

3 Climate Change and Greenhouse Gases

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5 GHG Global Warming Potentials (GWPs) are relative to CO 2 Comparison of 100-Year GWP Estimates Gas CO 2 equivalents (CO 2 e) Carbon Dioxide (CO 2 ) 1 Methane (CH 4 ) 21 Nitrous Oxide (N 2 O) 310 Hydrofluorocarbons (HFCs) ,700 Perfluorocarbons (PFCs) 6,500-9,200 Sulfur Hexafluoride (SF 6 ) 23,900 (1) Intergovernmental Panel for Climate Change (IPCC) Second (1996) Assessment Report

6 Direct Impacts of Increasing Temperature 1. Average surface water temperature is increasing 2. Land ice is melting 3. Snowpack is receding

7 Indirect Impacts of Increasing Temperature 1. Precipitation / drought patterns changing 2. Sea level rise 3. Development of new regulations and initiatives Surface Melt on the Greenland Ice Sheet Descending into a Moulin

8 National Perspective: Proposed EPA GHG Reporting Rule 1. Draft released March 10, Final rule expected Summer GHG reporting is mandatory for all sectors of the economy with GHG emissions above 25,000 metric tons of CO 2 e a. Most domestic water / wastewater utilities are NOT required to report

9 National Perspective: U.S. Mayors Climate Protection Agreement 1. Under this agreement, cities pledge to: a. Reduce emissions to 7% below 1990 levels by 2012 b. Meet or beat Kyoto Protocol targets in their own communities c. Urge Congress to pass GHG reduction legislation

10 Local Perspective: 25 Texas City Mayors have signed the U.S. Mayors Climate Protection Agreement Arlington Austin Carrollton College Station Coppell Corsicana Dallas Denton Edinburg El Paso Euless Fairview Fort Worth Frisco Garland Hurst Hutto Laredo McKinney Plano Richardson San Antonio Shavano Park Sugar Land Westlake

11 What Does This Mean for Utilities?

12 Treatment Processes Require a Tremendous Amount of Energy Pumping Mixing Aeration Disinfection

13 Impact on Utilities 1. POTWs may be asked to report GHG emissions 2. POTWs may be required to reduce GHG emissions 3. Presents an opportunity to participate in cap-and-trade programs

14 Cap-and-Trade

15 What is Cap-and-Trade? 1. Carbon trading program used as an incentive to reduce GHG emissions a. Uses mass emissions cap b. Uses targets and market mechanisms 2. Provides financial opportunity for uncapped entities that can reduce GHG emissions

16 Drivers for Cap-and-Trade 1. Regulatory a. Mandatory compliance to reduce GHG emissions 2. Political a. Voluntary agreements to reduce GHG emissions 3. Economic Ex. Mayors Climate Protection Agreement a. Opportunity for new revenue source b. Opportunity for new CIP funding source

17 Cap-and-Trade Elements 1. Cap a. Total allowable number of annual CO2e emissions (tons) b. Cap decreases over time 2. Allowance a. Permit to emit a ton of CO 2 e emissions 3. Offset a. Purchased by capped sources from non-capped sources b. Generated when an eligible project reduces CO 2 e emissions 4. Compliance obligation a. Allowance + Offset

18 Capped vs. Uncapped Sectors Capped Sector a. Report emissions for: Power generation On-site combustion Industrial processes b. Offsets Purchase is limited Cannot generate offset projects Uncapped Sector a. Reporting emissions is optional (but recommended) b. Offsets Unlimited purchase Can generate offset projects Once capped, always capped.

19 Carbon Market Offset Credit $$$ Offset Credit $$$ Contracts Uncapped Sector: Reduction in GHGs below compliance provides an opportunity to create and sell carbon offset credits. Capped Sector: Industries unable to meet their emissions cap can purchase carbon offsets to meet their maximum emissions limit.

20 The Opportunity

21 Most POTWs Are Not Included Under Proposed EPA GHG Regulations 1. Utilities are not capped 2. Utilities are eligible to participate in carbon market by generating Offsets 3. POTWs may have an advantage over other entities in carbon market a. Methane and N 2 O have a higher GWP than CO 2 itself b. Provides greater return on investment

22 Why Participate in the Carbon Market? 1. Participation in the carbon market can result in a new revenue source 2. By implementing a project to reduce GHG emissions, the opportunity exists to: a. Generate carbon Offset credits b. Profit from sale of Offset credits

23 Why Participate in the Carbon Market? (cont d). 1. Participation in the carbon market can result in a new funding source 2. By identifying projects which will reduce GHG emissions, the opportunity exists to: a. Receive funding from outside entities to implement a CIP to reduce GHG emissions

24 Potential Offsets at Uncapped WWTPs Capture and combustion of methane Reduction in fleet vehicle emissions Use of alternative energy sources Reduction of N 2 O process emissions Gas to energy production

25 How to Reduce Your GHG Emissions

26 Prepare for the Future: Develop a GHG Reduction Plan 1. Inventory existing GHG emissions 2. Identify and categorize key sources of GHG emissions 3. Generate a strategic reduction plan a. Identify GHG reduction projects b. Prioritize GHG reduction projects

27 Prepare a GHG Inventory

28 Identify Priority Capital Projects for GHG Reduction 45% 2007 Total Metric Tons of CO 2 e Emissions at WWTP Biogenic Anthropogenic 55% 2007 Anthropogenic Electrical and Process Metric Tons CO 2 e Emissions 86% 13% 1% Process Emissions Purchased Electricity Diesel - Stationary Combustion 2007 Anthropogenic Metric Tons of CO 2 e Emissions* 3% 11% 3% 3% Auxiliary Boiler 1 Auxiliary Boiler 2 8% 2% Cogeneration Fleet Multiple Hearth Furnace 1 Multiple Hearth Furnace 2 Elec & Process Emissions 70% *Those sources contributing <1% of total metric tons of carbon dioxide equivalent emissions are not included in the figure.

29 Examples of GHG Reduction Projects

30 Austin Selects Alternative Re-carbonation Process Results in 19% reduction in CO 2 emissions Daily CO2 Emissions % CO2 emissions (lbs) Series Traditional system (gas feed) Pressurized solution feed

31 San Antonio Water System Reduces Energy Consumption 1. High efficiency aeration blowers result in a decrease in energy consumption at Leon Creek Water Recycling Center

32 Digestion of HSO Waste in Waco 1. Reduction in influent BOD reduced aeration demand by 30% a. Diverted HSO from sewage 2. Feeding HSO directly to digesters has increased gas production by 25% 3. Next Step: a. Identify other energy sources that can be reduced at the Central WWTP (such as food waste, FOG)

33 Accepting Food Waste into Digesters Reduces GHG Emissions and Disposal Quantities at Landfills 1 ton 1 ton 21 tons GHG 0.8 tons of GHG 1 MW of Power

34 Summary 1. Proposed EPA reporting rule is not applicable for most Utilities a. Only those with on-site combustion > 25,000 metric tons CO 2 e 2. Utilities are part of the uncapped sector 3. Utilities can participate in Cap and Trade programs by generating Offset projects a. Potential revenue source from sale of verified Offset credits b. Potential funding source from other entities for GHG-reducing capital projects

35 Questions