Reducing the Impact of the Power Sector on Ozone Pollution: An Evaluation of Spatial and Temporal Differentiated Prices for Nitrogen Oxide Emissions
Open Access
- Author:
- Stines, Zachary O'cain
- Graduate Program:
- Energy and Mineral Engineering
- Degree:
- Master of Science
- Document Type:
- Master Thesis
- Date of Defense:
- March 28, 2016
- Committee Members:
- Mort D Webster, Thesis Advisor/Co-Advisor
- Keywords:
- Ozone
NOx
Electricity
Differentiated
Emissions
Spatial - Abstract:
- Nitrogen oxide (NOx) is a common air pollutant that has impacts on human health and is a precursor to the formation of tropospheric (ground-level) ozone. The U.S. Environmental Protection Agency therefore regulates the emissions of nitrogen oxides through the Clean Air Act and the National Ambient Air Quality Standards (NAAQS). Approximately 14% of all NOx emissions are produced by the electric power sector and as a result, regulations are often applied directly to the sector. However despite the success of regulations at reducing the amount of NOx emissions over the last several decades, areas not meeting the ozone NAAQS still persist. Further reductions of emissions using current approaches result in rapidly increasing marginal costs. As a product, new research is needed to design and evaluate the effectiveness of alternative regulatory designs in reducing ground-level ozone. This thesis seeks to evaluate and compare three regulatory designs: undifferentiated pricing, time differentiated pricing, and time and space differentiated pricing. Undifferentiated pricing is used to represent the current Cross-state Air Pollution Rule with constant emissions prices. Time differentiated pricing sets a higher emission price on days designated as having increased ozone formation. Time and space differentiated pricing would operate similarly to time differentiated pricing, except that different emission prices are applied to different regions. A unit commitment model is used to simulate the different regulatory designs for a study region based on the Electric Reliability Council of Texas (ERCOT) and to evaluate the cost and emissions impacts on the system. The short-term impacts result from the redispatching of resources to lower emitting generators and to generators not located within a region marked by higher permit prices. The results show that of the scenarios analyzed, time and space differentiated pricing is cost effective at reducing NOx emission prices in the nonattainment region on high ozone days, while time differentiation was the most cost-effective method at reducing system-wide emissions on high ozone days. The study also demonstrates the importance of the relative price differential between the emission prices of regions when utilizing time and space differentiated pricing. In particular, smaller differentials result in the greatest reduction in both the nonattainment and system-wide emissions. Very large differentials induce a shift of lower emitting gas generation in nonattainment regions to higher emitting coal generation in attainment regions, which increases the net NOx emissions for the system as a whole.