The effect of NO/sub x/ regulations on emissions dispatch: a probabilistic production costing analysis

The effect of NO/sub x/ emission restrictions on the cost of power generation is shown using the Bloom-Gallant model for production costing simulation. For this case study, it is found that tonnage caps provide a more cost-effective way to meet emission goals than lb/MBtu rate limiting policies. The inefficiency of rate limits is due to its encouragement of fuel use ("Btu dilution") and to a reduction of cost-effective energy transactions. Emissions dispatch is confirmed as an economical technique for NO/sub x/ compliance. However, the cost-effective range of emissions dispatch is significantly reduced under lb/MBtu regulation, especially when the power system has large opportunities for trading energy.