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Since the late 1980s, ICF International has worked side-by-side
with governments and industry to develop and evaluate major
air emission regulations. Our analyses have helped power
companies save billions of dollars in pollution control
investments.
Our experience, models, and analyses continue
to break new ground in international environmental policy,
from the U.S. sulfur dioxide (SO2), nitrous
oxide (NOx), and mercury (Hg) rules to Europe's
greenhouse gas (GHG) emissions trading regimes.
Multi-Pollutant Compliance Strategy and Planning
Multi-Pollutant
Compliance Plan. ICF International worked as an integral
part of the compliance planning team to identify the optimal
multi-pollutant compliance plan for a Midwest power company.
ICF International also provided expert testimony in support
of the Public Utility Commission review of the companies
compliance plan. Using ICF International's Integrated Planning Model (IPM®), we
generated power price projections, fuel prices, SO2,
NOx, and
mercury allowance prices, as well as the optimal compliance
decisions for the power company’s
entire generation portfolio.
NOx Compliance Planning Study for a U.S.
Midwest Utility. ICF International conducted NOx compliance
planning and an environmentally focused electric market
assessment for a large U.S. Midwest utility. We performed
unit specific assessments of compliance options accounting
for electric, fuel, and allowance market dynamics under
a host of potential future air regulatory outcomes. The
compliance options specifically modeled include:
- selective
catalytic reduction (SCR)
- selective non-catalytic NOx Reduction (SNCR)
- fuel lean gas reburn (FLGR)
- Amine Enhanced Fuel Lean Gas Reburn (AEFLGR)
- National Greenhouse Response (NGR)
- repowering
- fuel switching
ICF International analyzed
the potential for boom/bust cycles in the future State
Implementation Plan (SIP) Call NOx
Allowance Market and determined the effect
of these cycles on the utility's optimal compliance strategy.
Short-Term NOx Price Forecasts
for Electric Generation Owner. For a U.S. mid-Atlantic electric generation
owner, ICF International evaluated the U.S. Northeast Ozone
Transport Region (OTR) NOx, allowance market.
The project included an assessment of the likely impact of
nuclear plant outages and extreme weather conditions on the
demand for NOx
allowances. ICF International correctly predicted that, based
on market fundamentals, NOx allowance prices would
fall dramatically during the summer of 1999.
NOx Compliance Planning
Study for a Major Independent Power Producer. In
light of air regulatory uncertainty, ICF International evaluated
the client's NOx compliance strategy
to maximize the value of its existing asset base. We analyzed
potential regulatory outcomes, including potential changes
in timing, scope, stringency of NOx regulations,
and potential carbon, SO2, and mercury regulations.
This analysis provided a comprehensive picture of the fuel,
electric, and emission market implications of these policies.
The analysis evaluated key unit characteristics driving compliance
decisions (heat rates, NOx rate, region, boiler
type, scrubbed status, size, etc.) to determine the "robust"
compliance decisions for particular unit classes.
Fuel and Emission Markets Outlook. For
more than two decades, ICF International combines the most sophisticated
analytical tools in the business with unsurpassed market
intelligence to produce the most definitive analyses of the
air emissions allowance markets. These studies provide an
engineering-economics fundamental view of the uncertainties
surrounding the future prices of NOx and
SO2 emission allowance values.
We take an integrated approach, using our proprietary Integrated
Planning Model (IPM®) that has
a proven track record for accurately forecasting market turning
points in emission, power, and fuel markets. The studies
also explore the potential impacts of multipollutant legislation
on carbon CO2 and other GHGs. In recent
years the ICF International market outlooks also forecast Renewable
Energy Credit (REC) prices and renewable capacity additions
nationwide. In addition, recent studies cover the potential
mercury (Hg) emission allowance market and prices. Uncertainties
examined include technological advances in pollution control
equipment, financing, proposed energy legislation, demand
growth, and natural gas and coal pricing. The results of
the analyses are summarized in presentation-style briefing
books that contain assessments of recent and planned pollution
control installations, allowance market trends, regulatory
developments, impacts of uncertainty drivers on allowance
prices, and probability distributions for future allowance
prices. ICF International’s approach produces
superior forecasts that have consistently played out year
in and year out.
Environment Canada Multi-Pollutant
Emissions Reduction Analysis (MERS). ICF International is currently engaged in using ICF International's Integrated Planning Model (IPM®) to analyze the effects of instituting a
multi-pollutant emissions reduction strategy in the electricity
generation industry across Canada. The analysis is information-driven.
Gathering the information involves a literature review
of available control technologies and subsequent modeling
of the technologies and their reduction potential. Additionally,
both current and potential generation and generation characteristics
require extensive liaising between the individual utilities
and the client. The actual model of the MERS will test
the response to various scenarios such as caps, minimum
use of alternative power sources, and carbon market prices.
Multi-pollutant Emission Reduction
Strategy Analysis Foundation Report for the Concrete Sector
for Environment Canada. ICF International analyzed the effects and implications of a multi-pollutant
reduction strategy for the concrete sector in Canada. The
analysis was composed of 3 parts: an industry profile, quantification
of emissions and suggestions of the best-available technology.
First, a gap analysis of the current particulate matter (PM),
greenhouse gas (GHG), SO2, and NOx inventories
for the concrete sector in the Environment Canada’s
database was performed. Based on the projection of
concrete production and the assumptions on the adoption of
control equipment, the various emissions for the sector were
forecasted from 2000 to 2020.
TransCanada Multi-Pollutant Emissions
Reduction Strategy Overview Presentation. ICF International presented an overview of multi-pollutant
emissions strategy and current developments in the U.S.
Canadian information on Ontario and Alberta was included
to demonstrate potential impacts.
Asset Valuation and Due Diligence
Air Regulatory Risk Assessment. ICF International
performed air quality computer analyses on a fast response
basis for an industrial facility with its own electric generating
capacity. The analysis involved evaluation of EPA control
strategy development based on a rollback model for SO2 in
Ohio, and on the development of an alternative modeling approach.
We improved the emissions inventory, obtained local wind
observations, and modified Gaussian dispersion models to
account for terrain elevations. The modifications created
strong correspondence between predicted and observed concentrations.
In this case, emissions inventory errors nearly led to imposition
of unnecessary controls at a potential cost of tens of millions
of dollars.
Predivestiture Assessment of Oil and Gas Properties. ICF International provided an independent opinion regarding the
environmental liabilities that may be present on the oil
and gas production properties of a company deciding to divest
a portion of its energy business. In just a week, we conducted
site environmental assessments of 20 of the client's key
well-sites, compressor stations, gas treatment plants and
crude oil storage batteries, in all covering 700,000 acres
of production property. Our ability to quickly deploy five
teams of environmental professionals from around the world
was essential to our ability to meet the client's schedule.
Site work was completed within two weeks. Our report, which
was used to support our client's representation of substantial
compliance with environmental regulations in the transaction,
was delivered within two weeks of fieldwork completion.
Impact Assessment and Litigation Support
for an Electric Company. For a major electric company, ICF International evaluated
the air emissions impact of a proposed transmission line
in support
of litigation. We performed detailed modeling
to assess emissions before and after the line is built. We
also projected the changing regional transmission flows and
unit dispatch to estimate emissions impacts.
Due Diligence Review of an Oil Company. ICF International identified and estimated potential environmental
liabilities associated with past and present company operations
as part of a due
diligence review for an independent oil company. Because
the acquisition involved a stock swap, management was concerned
that significant environmental liabilities could affect the
desirability of the offer. Working under an extremely tight
deadline, our staff assembled publicly available information
on more than four dozen North American, European, and Latin
American current and past operations and then identified
likely liabilities.
Air Regulation Compliance Due Diligence. ICF International developed a bid for an electric power company
for existing electric generation assets that included an
optimal air regulation compliance strategy that minimized
investment costs and preserved option values to future
air regulatory uncertainties, such as President Bush’s
Clear Skies Initiative.
Estimation of Costs for Corrective
Action. ICF International
conducted a review of a potential acquisition for a Fortune
50 chemical and specialty products company with six manufacturing
plants in France, Spain, England, and the United States.
This project involved assessing each facility's environmental,
health, and safety (EHS) status, conducting on-site
sampling and analyses to characterize potential contamination,
developing technical solutions, and preparing budget quality
cost estimates for implementation.
Baseline Assessment and Review. ICF International
developed a rapid baseline environmental assessment of operations
for an established electric utility faced with new management.
We directed a review of the operation to provide the new
team due diligence on
the status of current operations. We also developed a plan
to help manage and eliminate the utility's potential liabilities.
ICF International was able to develop an exposure cost for the
operations and an implementation plan to minimize those exposures.
Due Diligence Assessment of Possible
International Metals Firm. ICF International staff
assessed a large internationally operating metals smelting
operation as a possible acquisition target. Local liabilities
had known environmental liabilities that had been remediated,
and a past international operation had quantified liabilities.
Detailed analysis showed that ineffective control enhancements
were not to be expected to result in long-term compliance
with regulations, and recontamination of the surrounding
neighborhood was to be expected. The environmental
liability was identified as being at least three times
what had been estimated.
Due Diligence Assessment of Inorganics
Processing Operations. ICF International staff reviewed
a U.S.-wide inorganics processing operation with operating
sites in over 10 states as a potential acquisition. Aside
from site-by-site operating liabilities and numerous site
contamination issues, one single future issue of concern
arose. The processes in the industry resulted in by-products
used in the building products and aggregates industries.
While the current classification of these by-product streams
appeared to allowed their use in this manner, the rationale
was suspect and was at risk of enforcement action in the
future. Of greater concern was the fact that the uses of
these materials and possible effects on buyers unaware
of possible effects had been largely ignored by the current
operations. Identification of this widespread potential
liability was one of the prime reasons the purchaser declined
to complete the acquisition.
Review of Potential Liabilities. ICF International
staff conducted a review of potential liabilities for our
client’s
acquisition strategy for a large petrochemicals and waste
management firm. A site list was developed using a search
of public databases for permitted locations (ongoing and
historic). Using this data and other public records, a list
of more than 600 sites across North America requiring screening
was developed. Freedom of Information (FOI) requests at federal,
state, and local levels, and additional record searches were
used to short-list the sites of greatest potential liability.
When the acquisition became public knowledge, the buyer was
able to focus on site efforts on a short list that identified
sites of greatest possible liability and more "generic"
representative sites that could be sampled.
Due Diligence Environmental Assessment. Two
large, international manufacturing corporations had agreed
to exchange their consumer electronics and medical products
businesses. ICF International staff directed a program that
included environmental risk assessments at 28 facilities
involved in the deal. Because of the short time frame available
for the assessment, several assessment teams were deployed
simultaneously to Europe, South America, southeast Asia,
Mexico, Canada, and the United States. Initial assessments
were followed up by field sampling at certain critical facilities
to characterize suspected on-site contamination. The results
of these assessments were captured in baseline reports prepared
in cooperation with the environmental consultant of the other
corporation.
Divestiture Assessments. For a major Canadian
chemical, plastics, and rubber manufacturer, ICF International
staff directed environmental due
diligence assessments in
anticipation of the divestiture of its rubber operations.
These assessments were conducted at facilities in the United
States, Canada, and Europe to evaluate whether the facilities
were in substantive compliance with applicable regulatory
requirements and to identify actual and potential environmental
liabilities. The report was presented to the purchaser and
was included as part of the representations and warranties
made by the client.
Pre-Divestiture Assessment. For a multinational
paper company, ICF International staff managed a team that evaluated
the potential environmental liabilities associated with nurseries
both in Canada and the United States. The evaluation included
visiting the sites, contacting regulatory agencies, and interviewing
facility employees. Reports were prepared for each site assessing
areas of potential liability and concern.
Assessment of an Acquisition Candidate. For
a major manufacturing corporation interested in acquiring
an existing manufacturing plant, an experienced ICF International
team under the direction of a senior consultant inspected
the plant, reviewed background documents, interviewed plant
personnel, and conducted sampling. The client used the results
of the work to assess the economic impact of hazardous waste
management on the company and to decide whether to continue
producing certain product lines.
Assessment of Plant Liabilities. For a
diversified metal forming and fabricating company, ICF International
staff directed the assessment of 30 facilities and identified
potential environmental and occupational health risks. Included
were risks associated with regulatory noncompliance, inadequate
environmental controls, environmental or health damages due
to hazardous material releases, improper waste disposal practices,
and inadequately controlled worker occupational exposures.
Dollar liabilities were calculated for risks and presented
to a senior management committee. This technique allowed
management to quickly identify the top priorities for risk
reduction programs.
Fast-Moving Divestiture Review. For a large
pulp, paper, mining, and metals company, ICF International staff
were responsible for managing a divestiture review of three
facilities. The work included identifying and estimating
current and potential environmental liabilities and evaluating
the facilities’ regulatory
compliance status. All work, including soil and water sampling
and analysis and final report, was completed within three
weeks of the client’s initial request.
Policy Analysis of Alternative Air Regulatory Approaches
Air Regulatory Generation Strategy
for a Major Utility. We conducted
detailed analysis of potential future regulatory outcomes
and their implication for generation strategy for a major
utility. ICF International identified high profit margin opportunities
resulting from the implementation of strict future NOx,
SO2, and carbon regulations. We identified regional asset
development targets and undervalued asset acquisition opportunities.
Economic and Environmental Impact Analyses for the
U.S. Environmental Protection Agency (EPA). ICF International has been the leading consultant to EPA and industry
on the economic and environmental impacts of the Clean
Air Act Amendments (CAAA) for over twenty years. We evaluated
the costs of compliance with the acid rain regulations
(Title IV) of the CAAA of 1990, focusing on forecasted
effects on utility SO2 emissions, utility costs,
electricity rate increases, and regional coal markets.
Prior to the CAAA, ICF International evaluated all of the
major legislative proposals from industry and environmental
groups. This work involved evaluating the emissions, costs,
and coal market impacts of various proposed and final revisions
to the CAAA. We also evaluated the impacts of SO2 emissions
trading on utility compliance costs and regional coal markets
under an acid rain control program. More recently, ICF International was a leading consultant to EPA in support of
the Ozone Transportation Assessment Group (OTAG). For OTAG,
we used ICF International's
Integrated Planning Model (IPM®)model to analyze
alternative NOx emissions trading and banking
scenarios. ICF International also has performed all of the
electric modeling work for EPA's NOx SIP call,
and has conducted numerous analyses of mercury and carbon
policies and regulations for EPA, the U.S. Department of
Energy, trade associations, and private sector clients.
Environmental Impact Analysis of Deregulating Electric
Power. ICF International undertook a year-long project
to analyze the environmental impacts of electric sector
deregulation. For this analysis, ICF International's Integrated Planning Model (IPM®) was
used to project electric sector emissions of SO2,
NOx, carbon, and mercury, under a base case
scenario and scenarios incorporating the effects of existing
and proposed legislation designed to promote deregulation
in wholesale and retail electric markets. Impacts of deregulation
on SO2 emission trading under Phase I and Phase
II of the Acid Rain Program also were analyzed.
Regulatory Impact Assessment of SO2
Emissions for EPA’s
Acid Rain Program. ICF International prepared the draft
and final regulatory impact analyses of the SO2 allowance
trading system as an element of EPA's Acid Rain regulations.
Using ICF International's Integrated
Planning Model (IPM®),
ICF International estimated the costs of meeting the ten-million-ton
reduction in SO2 emissions over the next 20
years in two regulatory regimes and under two growth scenarios.
One regulatory regime assumed a traditional "command
and control" regulatory approach in which each power
plant is required to meet its own emissions tonnage limit.
Under the other regulatory regime, sources are allocated
"emissions allowances," which they are permitted
to use, sell, or "bank" for
later use. ICF International used the model results to estimate
the extent and distribution of the cost savings possible
under the more flexible regime, and estimated the costs of
implementing the program as well.
Economic Impact Analysis of Voluntary
Acid Rain Program. ICF International
performed several economic impact analyses of the "opt-in" program,
under which industrial boilers have the opportunity to
enter the Acid Rain Program voluntarily. By keeping their
emissions below a baseline level, these sources can earn
profits while lowering compliance costs for affected utilities.
Because of the large number of dimensions along which the
set of regulatory options were expected to vary, our firm
modeled the effects of the options as realistically, and
in as much detail, as possible. Starting with a comprehensive
database of more than 2,000 potential industrial opt-ins
and estimates of relative fuel prices and sulfur contents,
ICF International estimated the net economic benefits to the
population for each potentially viable emission control
approach for an array of price scenarios. Impacts were
estimated by assuming that units would opt in if they were
projected to make a profit by doing so, summing the costs
of emissions reductions by the opt-in units, and comparing
total emissions with and without the program.
Parallel economic analyses tested whether the opt-in program
would be likely to affect allowance prices, boiler life,
the penetration of cogeneration, and source utilization.
ICF International's analysis alerted EPA to the risk inherent
in a voluntary program — that most of the sources that
would find it most profitable to enter the program to sell
SO2 allowances would be those who would have reduced their
emissions for purely economic reasons. As a result, the sale
of opt-in allowances would often result in emission increases.
Once EPA was made aware of this danger, many of its choices
among potential regulatory elements and options were guided
by a desire to prevent excess pollution.
The Global Climate Change Emissions Trading Analyses. The
Global Climate Change Emissions Trading Analyses consisted
of analyses of alternative carbon emission trading and
banking regulatory scenarios. For these analyses, ICF Consuting’s
ICF International's Integrated
Planning Model (IPM®) was used to estimate electric sector carbon
emissions and pollution control costs for over 25 different
regulatory scenarios. Some of these scenarios analyzed
the cost and market impacts of co-controlling NOx and
SO2 emissions, as well as carbon emissions.
The results of the first round of these analyses were presented
at the EPA-sponsored Climate Change Analysis Workshop in
1996.
Climate Policy Support on Greenhouse Gases. ICF International provides support to EPA on climate
policy, including
assessments of domestic greenhouse gas emissions control
policies, such as market-based, cap-and-trade systems.
Our firm has evaluated alternative approaches for developing
a carbon cap-and-trade system, benefits of banking and borrowing
schemes, addressing alternative sectors that might be included,
the level of emissions captured by such a system, and the
potential for "leakage." Our
staff has also evaluated the potential benefits of co-control
strategies as well as the impacts of renewable portfolio
standards.
Regulatory Impact Analyses of NOx Emissions
for EPA’s
Acid Rain Program. ICF International recently completed
a series of Regulatory Impact Analyses (RIA) of proposed
and final NOx limits for utility boilers in Phase
I and Phase II of the Acid Rain Program. These projects,
which extended over the four years of rulemakings, included:
- support to EPA during the process of options development
and construction of databases of affected NOx boilers
- supervision
of analyses of the cost and effectiveness of low NOx burner
technology
- the development and operation of optimizing models
to measure the effects of emissions averaging and estimates
cost effectiveness
- the preparation of draft and final
RIA documents
These projects also required a review of the
literature on the cost-effectiveness of control technologies,
including natural gas reburning; research into the legislative
history of the concept of "comparable
cost" and "cost-effectiveness"; assessments
of the effects of the rules on small entities and local governments
(under the Regulatory Flexibility and Unfunded Mandates Acts);
and review of and responses to comments.
Emissions Forecast for EPA’s
Clean Air Act Amendment Section 812. ICF International
estimated electric utility boiler-specific NOx emission
projections for use in EPA’s Emission
Trends report as required under Section 812 of the Clean
Air Act as amended in 1990. For this project, ICF International's Integrated Planning Model (IPM®) was used to project
electric plant dispatch, costs, fuel use, and emissions.
The IPM® analysis was structured to represent the
existing SO2 and NOx regulations
implemented under the CAAA. These IPM® projections were
then used in conjunction with the National Electric Energy
Data System (NEEDS) to develop boiler-specific SO2 and
NOx emission estimates.
Environmental Impact Statement
and Policy Support for Federal Energy Regulatory Commission
(FERC) Order 888. For
FERC, ICF International
studied the environmental impact electric sector wholesale
deregulation as embodied in the commissions wholesale competition
rule (FERC Order 888). For this project, ICF International's Integrated Planning Model (IPM®) was used
to project electric sector emissions of SO2, NOx, and
carbon under alternative regulatory scenarios.
Environmental Impact Statement on Proposed Independent
Power Producers (IPP) and Competitive Bidding Rulemakings
ICF International was requested by FERC to prepare an environmental
impact statement of its two landmark rulemaking proposals
in electric power regulation—the proposal dealing
with IPP, and the proposal dealing
with Competitive Bidding. ICF International developed alternative
industry response scenarios (in terms of the alternative
mixes of generating capacity) and compared these to the expected
future development of the industry without these rules. For
this project, our staff prepared forecasts of national cogeneration
development with and without the FERC rules.
Real Options Analysis of Highest Value Compliance Plans
ICF International applies a Real Options compliance framework
to analyze the extensive range of uncertainties and strategic
alternatives. Traditional approaches to compliance planning
that rely on deterministic expected value estimates or scenario
analysis can lead to static and lower value decisions. With
ICF International’s Real Options approach, the end result
is an optimal sequential compliance strategy that explicitly
recognizes the option value of control deferral and one that
can evolve as policy, market, and technological uncertainties
are resolved.
Real
Options Analysis of NOx Compliance for Mid-Atlantic
Power Company. ICF International conducted a real options analysis to determine
the optimal sequential compliance strategy for the upcoming
NOx SIP Call regulation. As part of this effort,
ICF International used the ICF International's Integrated Planning Model (IPM®) to
evaluate numerous NOx control
technology options for each of the power company’s
generation units. Technologies evaluated included SCR,
SNCR, and RJM’s layered NOx technology.
IPM® was also used to evaluate how compliance
strategies were affected by major uncertainties, including
gas prices, electric demand growth, weather, and technology
performance. The value of the power generator's portfolio
for alternative compliance strategies under each uncertainty
outcome was used in a real options decision analysis framework
to identify the optional compliance choice.
Environmental Valuation of Generation
Assets for a U.S. Mid-Atlantic Electric Generation Owner. ICF International conducted an environmentally focused valuation
of the entire portfolio of generation assets for an electric
generation owner in the U.S. Mid-Atlantic region. The impact
of the major potential NOx, SO2, and climate
change regulations on the value of each generation unit
was examined. ICF International identified the optimal compliance
strategy for each unit from a broad range of alternatives,
including pollution control technology, fuel switching,
dispatch changes, repowering, and retirement.
Scenario Analysis of Regulatory, Fuel, and Power Market
Uncertainties
Pollution Control Technology Penetration Forecast. For
a construction and engineering firm, ICF International provided
an analysis of the future market for air pollution control
equipment. The analysis began with an assessment of state
and federal air pollution legislative and regulatory initiatives.
Using this regulatory roadmap as a starting point, and working
with the client to develop detailed information on the cost
and performance of pollution control equipment, we used ICF International's Integrated Planning Model (IPM®) to
forecast installations of NOx,
SO2, and
mercury controls. These pollution control projections were
summarized on a state and holding-company basis. Projections
of individual generation unit controls also were provided
for key client targets to help the client with business development
and marketing outreach.
Regulatory Impact Analysis and Asset Valuation. ICF International's Integrated Planning Model (IPM®) is
used to determine how multi-pollutant legislative proposals
will affect the asset value of power companies and their
competitive position. We can quantify the impact of a policy’s
individual components, including allowance allocation methods
and trading and banking provisions. Learn more about ICF International’s energy
modeling capabilities.
Impact Assessment of Utility Restructuring Plan. ICF International conducted an environmental assessment of a utility’s
proposed restructuring plan. Alternative scenarios of wholesale
and retail restructuring were analyzed. Scenarios considered
alternative scenarios of generation unit retirements, nuclear
operations, IPP buyouts, and retail price scenarios. Impacts
on NOx, SO2, CO2, and total
suspended particulates (TSP) were considered. Other environmental
impacts, such as water and employment, were also considered.
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