Page 72

The Ecology of Industry.  1998. Pp. 72-100
Washington, DC:  National Academy Press.

The Electric Utility Industry

IAN M. TORRENS AND KURT E. YEAGER

Summary

In less than a decade, major corporations around the world have progressed from making occasional token public references to selected environmentally beneficial aspects of their operations to instituting increasingly comprehensive environmental audits. This auditing has been coupled with policies and actions to achieve continuous environmental improvement, as well as public reporting of the results of such efforts.

Using the industrial-ecology model, environmental performance can be further improved by creating materials and energy flows within a larger system of linked industrial units, in which waste from one is a resource for another. Complex integrated industrial ecosystems can be created in which the environmental burden of individual participants is reduced by the optimization of both energy and materials flows. At the heart of these operations is the electric utility industry.

The main products of the electric utility industry are electric energy and the services it makes possible. To produce a kilowatt-hour and get it to the consumer, the utility company must navigate a gauntlet of potential environmental and health impacts, all of which require proactive, responsible management. Electric power companies in the United States, although at different stages of the process, have all embarked on the road to corporate environmental stewardship.

Throughout the twentieth century, electricity has been a prime agent of progress, providing the foundation for increased labor productivity, capital, and primary energy resources and allowing rapid growth in prosperity, health, and quality of life. In so doing, it has become more than just an energy alternative; rather, its efficiency and precision are now essential assets to resolving the interre-



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Page 72 The Ecology of Industry.  1998. Pp. 72-100 Washington, DC:  National Academy Press. The Electric Utility Industry IAN M. TORRENS AND KURT E. YEAGER Summary In less than a decade, major corporations around the world have progressed from making occasional token public references to selected environmentally beneficial aspects of their operations to instituting increasingly comprehensive environmental audits. This auditing has been coupled with policies and actions to achieve continuous environmental improvement, as well as public reporting of the results of such efforts. Using the industrial-ecology model, environmental performance can be further improved by creating materials and energy flows within a larger system of linked industrial units, in which waste from one is a resource for another. Complex integrated industrial ecosystems can be created in which the environmental burden of individual participants is reduced by the optimization of both energy and materials flows. At the heart of these operations is the electric utility industry. The main products of the electric utility industry are electric energy and the services it makes possible. To produce a kilowatt-hour and get it to the consumer, the utility company must navigate a gauntlet of potential environmental and health impacts, all of which require proactive, responsible management. Electric power companies in the United States, although at different stages of the process, have all embarked on the road to corporate environmental stewardship. Throughout the twentieth century, electricity has been a prime agent of progress, providing the foundation for increased labor productivity, capital, and primary energy resources and allowing rapid growth in prosperity, health, and quality of life. In so doing, it has become more than just an energy alternative; rather, its efficiency and precision are now essential assets to resolving the interre-

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Page 73 lated economic, environmental, and energy-security issues facing the world today. However, the generation and delivery of electricity (and even its use) are under fire as contributors to environmental problems, both in advanced and developing countries. Major contributions to improved environmental performance can be made by switching to cleaner primary energy sources, reducing emissions, improving the efficiency of generation, delivery, and use of electricity, and preventing pollution through better management of by-products. From the industrial ecology perspective, optimizing industrial ecosystems can involve the use of waste heat from electricity generation for residential and commercial heating and, conversely, the use of municipal waste or refuse-derived fuels as sources of energy for electricity generation. There is also considerable promise for alleviating the negative environmental impacts of other industry sectors, such as transportation, through the substitution of fossil fuels by electricity. This paper addresses the electric power sector and industrial ecology through specific examples of the environmentally beneficial use of electricity-using technologies, or electrotechnologies, in industry, municipal waste and water management, and transportation. It also discusses how the utility industry increasingly is preventing pollution through source reduction, reuse and recycling of its by-products, and use of management tools such as waste accounting and life-cycle analysis. In the pollution-prevention activities of electric utilities, there is a significant amount of symbiosis with other industry sectors. The trailblazing technologies of the late twentieth and early twenty-first centuries are likely to open the door to a new cycle of growth in the use of electricity. This places on the providers of electric power a particular responsibility for the environment. It also puts them at the focal point of any industrial-ecology system. Through the benefits of technological innovation made possible by electricity, electric power companies have an opportunity to be key players in worldwide economic development. Only through their continued careful attention to clean and efficient generation and delivery of electricity, however, can they play their commensurate role in contributing to improved environmental quality and sustainable development. Beyond Compliance to Stewardship Less than a decade ago, satisfactory environmental performance in the electric utility industry, as in many other industrial sectors, entailed simply complying with applicable laws and regulations. To the chief executive officer (CEO), these requirements represented an additional cost of doing business—a cost that was unfortunately growing as Congress and the Environmental Protection Agency (EPA) continued to invent new constraints in the name of environmental protection. Several events and trends (Box 1) have combined over the past 10 years to change industry's attitudes.

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Page 74 BOX 1 Factors Contributing to Industry's Changed Attitudes Regarding the Environment ·      The Brundtland Commission report (World Commission Environment and Development, 1987) forced into political prominence the concept of sustainable development. ·      Public concern over potential global climate change due principally to carbon dioxide emissions from fossil fuel use has provided support for international efforts at climate stabilization. ·      The rapid pace of economic development in Asia and the collapse of the Soviet Union have raised the profile of public concern about the actual and potential environmental degradation due to inadequate attention to environmental protection. ·      The not-in my-backyard (NIMBY) attitude of local residents is forcing industry to reconsider its resource use and waste-generation practices (especially where hazardous materials are concerned). ·      The 1992 Rio Conference caused industrial companies worldwide to recognize these trends and to take an entirely different perspective on their environmental roles and responsibilities to national and local governments. Today, corporations are instituting increasingly comprehensive audits of the environmental impacts of their operations and efforts to minimize these impacts. This auditing has been coupled with policies and actions to achieve continuous environmental improvement, as well as public reporting of the results of the efforts. The trend is still in its infancy but is being driven rapidly toward general adoption. Companies that seek competitive advantage through public perception of superior environmental performance are allying themselves with environmental, financial, and management consulting groups that have the expertise necessary to transform environmental performance reporting from an esoteric analysis into a mainstream corporate activity. It is a fast-moving field. The efforts of individual companies are often driven by the vision of a CEO who is convinced that his or her business will benefit from being viewed as searching out more environmentally benign ways to bring products to market and ensuring that their use, reuse, recycling, and disposal are equally environmentally sensitive. In each industry sector, as a nucleus of "green" companies takes shape, the industry trade associations become involved in improving environmental performance, mainly by transferring to member firms methodologies for environmental auditing and reporting. Accountancy also becomes involved. The investment community is frequently involved as well, principally because of its concern about the potential future liability of companies for past, present, or future environmental damage. It is perhaps not an exaggeration to suggest that financial analysts

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Page 75 worldwide will, before the end of this decade, study company environmental goals, practices, and performance reports with as much diligence as they today examine these firm's financial statements. Finally, governments are increasingly mandating disclosure of environmentally relevant information by companies. The electric power sector is no exception to these general trends. Its main products are electric energy and the services it provides. To produce a kilowatt-hour and get it to the consumer, however, the company must navigate a gauntlet of potential environmental and health impacts, all of which require proactive, responsible management. Electric power companies in the United States, although at different stages of the process, have all embarked on the road to corporate environmental stewardship. Pursuing Environmental Excellence What causes a company to try to improve its environmental performance and to communicate the results of this effort to its stakeholders? Where is the profit in developing symbiotic relationships with others in an industrial ecosystem? In a 1991 report, the United Nations Environmental Program's Industry and Environment Office (UNEP/IEO) identified the following factors that might motivate companies to seek a greener image: ·      increasing legal requirements and regulations; ·      widening environmental responsibility for products and processes; ·      public opinion and pressure; ·      accidents or environmental events; ·      the presence of a champion or visionary at the executive level: ·      developments in technology and skills; ·      general efficiency and quality improvement; ·      competition and peer pressure; ·      desire to foster a positive public image and consumer acceptance of company and products; ·      desire to attract good employees; ·      recognition of new markets and opportunities; and ·      avoidance of cost and liability. The UNEP/IEO report pointed to the first three factors as the most influential motivators. The first requires no elaboration. As to the second, industry is increasingly being persuaded to take responsibility for the potential environmental impacts of products during their cradle-to-grave life cycle. Companies can expect that, in the future, this responsibility will extend beyond emissions, waste, and energy-efficiency issues to encompass global efforts on environmentally sustainable development. The third motivating factor, public opinion and pressure, plays a strong role in influencing the public image of the company and in influencing

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Page 76 governments to pass new environmental laws and regulations. The remaining factors also provide sound reasons for firms to move swiftly to embrace positive and proactive environmental stewardship. Hedstrom and McLean (1993, p. 19) identify six ''imperatives for excellence in environmental management." They argue that these imperatives, listed below, will influence competitiveness and, for some, determine survival. ·      Define policy to push the vision. The policy should include minimal performance standards, a detailed implementation plan to translate policy into goals and target dates, and responsibilities, accountabilities, and incentives for reaching goals. ·      Measure to manage. Measurement will not be perfect, but without useful measures, no improvement can be credibly cited. Progress in this area today is extremely rapid. ·      Communicate to establish dialogue. This means asking stakeholders what they want to know, not merely telling them what you think they should know. It requires developing appropriate means of communicating this information. Communications should be tailored to the differing needs of stakeholders, and the communications process should be refined continuously. ·      Question "business as usual." A leadership position in environmental performance as currently defined might not hold its standing even 5 years from now. The rapid evolution of this aspect of business requires continual improvement of environmental performance. ·      Satisfy all stakeholders. Like any business strategy, environmental strategy can succeed only if it meets the needs of the company's stakeholders. Relationships might have to be rethought of as partnerships to meet mutual goals. ·      Integrate. Environmental management has to be a core concern of critical decisionmakers. Environmental considerations must be built into line-management responsibility alongside considerations of efficiency, productivity, quality, and profitability. In considering the company's role in a larger industrial ecosystem, integration goes well beyond the single company to embrace those with which it does business as well as its interactions with the natural ecosystem. The Edison Electric Institute (EEI) has compiled a menu of initiatives that it believes contribute to overall environmental excellence. In broad terms, the initiatives track Hedstrom and McLean's imperatives. EEI divides them into five groups: ·      Corporate environmental commitment (includes public statement of commitment and goals; CEO leadership; environmental goals integrated

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Page 77 into business planning; adequate resources; and involvement of key stakeholders) ·      Environmental performance measurement and reporting (includes active and thorough compliance management; prompt response to problems; development of key performance indicators; environmental auditing; and internal and external communication). ·      Pollution prevention and waste minimization (includes environmentally sound procurement, use, and disposal; energy efficiency and integrated resource planning; release prevention and emergency response planning; multimedia approach to pollution control; life-cycle assessment and practices; and environmental risk management). ·      Employee training and responsibility (includes awareness and technical training; clear employee goals, responsibility, and accountability; encouraging employee input on environmental improvement; and an atmosphere that encourages positive behavior). ·      Environmental stewardship (includes proactive stance toward environmental issues; investment in environmental enhancements; focus on continuous improvement; and research and development (R&D) on environmental improvement). Electric power companies are engaged in a range of initiatives along these lines. Many if not most have publicly announced environmental commitments or goals and are in the process of establishing internal environmental databases and performance measures. A number have issued formal environmental reports or have included environmental sections in their annual reports. The process is still evolving, however, in part because top management is currently much more focused on the impact that deregulation and competition have on the balance sheet. As utility companies face up to the changing business environment and reorganize to survive and profit from it, they should incorporate the changes necessary to make environmental excellence an integral part of their business. In the words of Wilson and Greeno (1993, p. 5), "They will need to shift their environmental management from a largely functional approach to a more business-oriented perspective." Wilson and Greeno listed the following characteristics as necessary for a state-of-the-art environmental management program. ·      The needs of environmental stakeholders will be addressed and satisfied through critical business processes that incorporate environmental concerns across the full product life cycle. Superior business performance processes will be defined to include environmental performance. ·      The environmental vision will be part of the broader business strategic vision. Strategic planning will explicitly integrate environmental needs. ·      Line managers will carry full accountability for environmental perfor-

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Page 78 mance, with incentive and reward systems that reflect this. They will look to much leaner corporate environmental staffs only for specialized services. ·      The chief corporate environmental officer will rotate from and to line management and will have direct access to the top management levels. ·      Reliable tracking and measurement will support continuous performance improvement and an aggressive internal and external communication program aimed at key stakeholders. ·      As competitive pressures intensify, outreach to a wider range of partners within the industry, among the public, and in government will contribute to a reputation for environmental excellence and a greater voice in the public arena. ·      Strong environmental performance will provide leverage for strategic advantage, increasing the company's ability to influence events and control its destiny. The concepts delineated above for individual companies and industry associations are taken a step farther in industrial ecology. Industrial ecology views the industrial system as a complex web of interrelationships in which waste is eliminated by optimizing the flows of energy and materials among system participants, including the natural ecosystems that are critical participants in these flows. According to Tibbs (1992, p. 4), this will require designing industrial infrastructures as if they were a series of interlocking man-made ecosystems interfacing with the natural global ecosystem. Industrial ecology takes the pattern of the natural environment as a model for solving environmental problems, creating a new paradigm for the industrial system in the process. The ideal industrial ecosystem is one that is as close as possible to a closed-loop system, with near-complete recycling of materials and cascading of energy. The Importance of Communication Some of the organizational implications of improving a company's environmental performance are discussed above. As with any major change in the way a company does business, the quest for environmental excellence must be led in clear and certain terms. The solid commitment of top management is essential. INSEAD, the European Institute of Business Administration, found that the commitment of top management "may be the single most important criterion for the successful implementation of good environmental practices within the company" (United Nations Environmental Program, Industry and Environment Office, 1991). Top management leadership determines whether the company will be a leader or a follower in environmental protection.

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Page 79 Effective communication of this environmental vision to middle managers and employees is the next most important criterion for successful cultural imprinting. A company's environmental policy, enthusiastically and openly backed by the CEO, serves to communicate the company's commitment to deal with environmental concerns. New environmental policies and goals have to be "sold" and appropriate accountability designated to all levels. If this does not happen, line employees and middle managers will see demands to make processes more environmentally sound as just another added cost of dubious necessity that makes it more difficult for them to reach their bottom-line goals. Therefore, environmental performance needs to be communicated as a key component of all other corporate goals. Monitoring and reporting of performance need to be institutionalized, and employee performance needs to be judged on how well employees integrate improved environmental performance into their other responsibilities. Employee training on environmental matters is essential if performance improvements are to be realized efficiently and rapidly. Employee environmental training often combines broad-based awareness training and job-specific technical training. Awareness training exposes employees to the link between the company's environmental policy and implementing practices and provides an effective forum for employees to exchange ideas and suggestions regarding environmental management, responsibility, and goals. Technical training targets employees who have specific responsibilities for complying with environmental requirements or specific opportunities for contributing to the continual improvement of the company's environmental performance. Effective training is aimed at cultural change and strives to better define employee goals, responsibilities, roles, and personal accountability for achieving the company's environmental objectives. Finally, the two-way-street aspect of training is essential to making the cultural shift. Employee input to the process of environmental compliance or stewardship should be strongly encouraged. Employee focus groups can even be helpful to management in exploring the issue of industrial ecology and its relevance to the company in the short and long term. Employees who come up with ideas that are implemented and result in improved performance should be rewarded. This type of dialogue is very effective in disseminating the culture of corporate environmental excellence. The Importance of Measuring Environmental Performance Environmental performance indicators (EPIs) attempt to measure a company's success in environmental management and protection, enabling it to set environmental performance targets and chart progress toward those goals. If these indicators can be made comparable across an industry, among industrial sectors, and ultimately among countries, they can be used as benchmarks. Current best practice involves the use of indicators that measure significant environmental im-

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Page 80 BOX 2   Core Environmental Performance Indicators ·      Materials Used ·      Primary energy used ·      Carbon dioxide emitted due to energy use ·      Emissions of different air pollutants ·      Water consumed ·      Major waste streams ·      Water effluents (biochemical and chemical oxygen demand) ·      Percentage of waste recycled ·      Percentage of recycled materials used in processes ·      Number of environmental accidents and human health impacts ·      Product impacts during use ·      Level of expenditure on environmental protection ·      Evaluation of total resource use ·      Environment-related liabilities pact, can be self-assessed and externally verified, and are comparable either over time or with the best representative environmental standards (Deloitte Touche Tomatsu International, 1993). There is a fairly large set of frequently used core EPIs (Box 2) that can be used to assess environmental improvement and to rate a firm's performance within the industry sector. Two models for corporate environmental performance measurement and reporting have emerged (Elkington and Robins, 1994). The Anglo-Saxon model, favored by North American and United Kingdom companies, is based mainly on an inventory of emissions and management practices. The Rhine model, used by German and Scandinavian companies, takes the practice a step further by reporting on a company's eco-balance, which is based on a life-cycle accounting of environmental impacts (positive and negative) associated with the raw materials used as well as the company's final products. The Unique Contributions and Capabilities of Electricity Throughout the twentieth century, electricity has been a prime agent of progress, providing the foundation for increased productivity of labor, capital, and primary energy resources, and for rapid growth in prosperity, health, and quality of life. In so doing, it has become more than just an energy alternative; rather, its efficiency and precision are now essential assets to resolving the interrelated economic, environmental, and energy-security issues facing the world (Yeager, 1994). However, the generation and delivery of electricity (and even its use) are under fire as contributors to a range of environmental problems in both advanced

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Page 81 and developing countries. These include the conventional impacts of air, water, and soil pollution; the issues of safety and waste disposal related to nuclear power; possible health impacts of exposure to electric or magnetic fields; and emissions of greenhouse gases, which could affect global climate patterns. The challenge, therefore, is to demonstrate the unique capabilities of electricity versus other forms of energy in terms of versatility, conversion efficiency, sustainability, and control over potential environmental impacts. Several options are currently available to the electric utility industry to improve its environmental performance. Major contributions to this effort can be made by switching to primary energy sources with fewer environmental impacts; improving the efficiency of the generation, delivery, and use of electricity; preventing pollution through better management of by-products; and substituting the direct use of fossil fuels by electricity-using technologies, or electrotechnologies, at the point of end use. Figure 1 summarizes the opportunities available to improve environmental quality in the electric utility industry. Much has been written on the question of fuels and efficiency. There is considerable promise both for generating and using electricity more efficiently and for deriving environmental benefits for other industry, transportation, and residential and commercial consumers through substitution of electricity for the direct use of fossil fuels (referred to as beneficial electrification) (Yeager, 1994). From the industrial-ecology perspective, examples of cross-sectoral optimization include the use of waste heat from electricity generation for other purposes, such as industry or residential and commercial heating and, conversely, the use of municipal waste or refuse-derived fuels as a primary energy source for electricity generation. A frequently cited example in industrial ecology is the cooperation in Kalundborg, Denmark, between the Danish utility Asnaes and a web of other industries, including an oil refinery, a biotechnology plant, a gypsum wallboard manufacturer, a sulfuric acid producer, cement producers, a district heating system, and local agriculture, horticulture, and pisciculture (Figure 2) (Grann, 1997). Water, energy, chemicals, and organic materials flow from one company to another, decreasing waste production as well as air, water, and land pollution. It is undoubtedly well-known how electricity can be produced from its primary energy sources and used cleanly and efficiently. This paper therefore bypasses those topics and concentrates in greater depth on two aspects of electricity use with broad implications of industrial ecology. The first is the beneficial role electricity can play in solving environmental problems through substitution of electrotechnologies in the industrial, transportation, commercial, and residential sectors. The second involves the pollution prevention aspect of electric utility business operations. Beneficial Electrification Environmental protection will continue to be a priority for electric utility companies. However, in addition to controlling pollution and aiding end-of-

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Page 82 FIGURE 1  Opportunities to improve environmental  quality in the electric utility industry. SOURCE: Yeager, 1994.

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Page 90 the first category are high-volume by-products consisting mainly of coal ash and solid and liquid by-products from control of gaseous emissions that are produced in multiple tons per year. The second category consists of noncombustible wastes produced in low volumes. Examples include liquid-filled fuses, asbestos, solvents, paint smudges, boiler-cleaning waste, various blowdown streams, and ash-pond discharges. The industry has historically relied on landfills and ponds as its primary solid and liquid waste-management strategy. However, utilities are turning to new strategies, including pursuing markets for their by-products through brokers, waste exchanges, and recycling or reuse; generating less material; and using more environmentally compatible materials. Several representative case studies of pollution-prevention practices in the electric utility industry are summarized below. In addition, two other important activities under way in the industry are described. The first is the development of a life-cycle cost-management methodology to assist in making intelligent decisions regarding chemical and materials purchases. The second is the development of a waste-accounting methodology to track the progress of pollution-prevention efforts. Use of High-Volume By-Products High-volume by-products are generated as a result of the air emissions control system at a power plant—electrostatic precipitators, baghouses, or flue gas desulfurization (FGD) systems. Currently, the industry produces about 90 million tons per year of coal ash, bottom ash, boiler slag, and FGD by-product—enough material to fill a football stadium to a height of 9 miles (American Coal Ash Association, 1993). Given projections that coal use in the United States might increase substantially in the next 10 to 15 years and the growth anticipated for FGD systems because of new Clean Air Act legislation, the challenge to manage this increasingly large quantity of by-products will grow substantially. Currently, about 20 percent of electric utility industry high-volume by-products are used in commerce. The most commonly used by-product is fly ash, which can substitute for cement in concrete. Utilization trends have remained relatively constant over the last several years. Although there are many uses for coal ash, given its pozzolanic and, in some cases, its cementitious properties, most potential markets are relatively small. The following examples focus on some new, potentially large markets for coal ash. ·      Highway construction. Highway construction represents a major potential market for coal-combustion by-products. This usage to date has been limited, however, primarily because state highway departments and contractors are unfamiliar with coal ash in these applications. In addition, state environmental agencies that grant permits need information on the poten-

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Page 91 tial groundwater impacts of the ash constituents. Finally, the materials that coal ash would replace—cement, sand, soil, and aggregate—are typically locally available at relatively low cost, and the suppliers are structured as vertically integrated industries. Thus, coal-combustion by-products have a difficult time cracking the market unless there is a strong cost advantage. EPRI and several of its member utilities have sponsored five highway demonstration projects using coal ash in several different applications, including as a road subbase, a base course, in embankments, and as a high-cement replacement in concrete-base course. The projects were structured to show the technical acceptability of ash in these applications, as well as to examine any short-term effects on groundwater. One utility in Pennsylvania used coal ash and stabilized FGD by-product rather than conventional fill materials in an embankment for an interstate highway. It documented savings of over $600,000 for a 1,500-foot highway section using 353,000 tons of coal ash. These demonstration projects have served as test cases in developing highway design and construction manuals on using coal ash (Electric Power Research Institute, 1988; Patelunas, 1988). ·      Autoclaved cellular concrete. Autoclaved cellular concrete (ACC) is a lightweight concrete with no coarse aggregate. It is produced by mixing Portland cement, lime, aluminum powder, and water with a large proportion of a silica-rich material. In many countries, sand is the silica source. EPRI and the electric utility industry are investigating substitution of coal fly ash for the sand (as is done in the United Kingdom). Typically, fly ash can account for up to 75 percent of the solid material that makes up ACC. Initially, the focus of this effort has been on the production of standard masonry blocks. Using this material produces blocks that weigh one-quarter that of conventional masonry blocks, have thermal insulation properties (allowing insulation costs to be avoided in some climates), have self-leveling properties, and are fire and rot resistant. An additional advantage is that conventional carpentry tools can be used during construction. The technology has been commercialized in over 40 countries, with about 160 plants in operation. The challenge is to introduce this technology in the United States and to displace existing concrete masonry blocks, and possibly even some wood, in building construction. EPRI and the electric utility industry are now sponsoring a series of demonstrations of the technology at eight power plants using a mobile pilot plant (Sauber, 1992). At each site, the local construction community can witness the production process firsthand and see how the blocks are used in field demonstrations. The ultimate goal is to stimulate sufficient interest and markets that the business community will invest capital to operate commercial-scale plants in the United States using recycled coal ash.

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Page 92 ·      Aggregate production. Although the largest use of coal ash is as a substitute for cement in concrete, concrete contains only about 20 percent cement. Most of the remainder is aggregate and water. Therefore, manufacture of aggregate from coal ash would represent a much larger market in the concrete industry. An example of a recent entry into this market is the Aardalite process. It consists of adding together coal ash, water, lime, and additives and passing the resulting mixture through a rotating disc pelletizer, which forms pebblelike material that can be sized according to need. A 24-hour steam cure is the final step. A full-scale plant is currently in operation in Florida and uses about 150,000 tons of coal ash per year. ·      Other uses. Some promising new applications are currently in the research stage, including using these by-products as filler materials for plastics and metals. Not only could these fillers be produced more cheaply than the substances they replace, but the ash would add desirable properties to the final product. In aluminum, the ash improves the metal's machining and sound-damping characteristics, making it a good candidate for engine casings. In plastics, the ash could reduce the need for expensive matrix components such as resins, or reduce the amount of elastomers in rubber. The electric utility industry and EPRI are aggressively pursuing existing markets for coal ash and investigating new opportunities through research. Although no national goal for coal ash use has been established by the industry, EPRI, the American Coal Ash Association, and the Edison Electric Institute have been active in promoting coal ash as a useful byproduct and in attempting to remove institutional barriers to its use (Brendel and Kyper, 1992). Management of Low-Volume or Noncombustion Waste The electric utility industry is also actively pursuing waste-minimization and recycle-reuse options for a variety of other waste materials generated as part of electricity production and distribution (Electric Power Research Institute, 1993). The major motivating factors for electric utilities in these initiatives include increased corporate responsibility for reducing waste generation, cost reduction, and responsiveness to a growing number of state pollution prevention initiatives. Many states have designated as hazardous a wide variety of waste materials; therefore, costs of landfill have increased substantially, and potential long-term liability remains an issue for waste that requires disposal. Among wastes being considered for recycling or reuse are: ·      Antifreeze (ethylene glycol). Electric utilities have large vehicle fleets for servicing their customer territories. A large EPRI member utility initiated a recycling program for its antifreeze and now saves about $90,000 annually. The spent antifreeze is shipped over 400 miles for redistillation and reconstitution at a cost of $1.50 per gallon versus the replacement cost of

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Page 93 $8 per gallon. Further cost savings (not quantified) were realized from avoiding disposal. The utility even provides an antifreeze recycling service for its local community. Another EPRI member utility takes the antifreeze from its vehicle fleets, filters it, adjusts the pH, and then reuses the antifreeze in an ethylene glycol air heater at one of its power plants. The capital investment was under $3,000, and operating costs are less than $1,000 per year. Over the next 10 years, the utility estimates it will save $380,000 by avoiding antifreeze disposal and replacement costs. ·      Boiler chemical-cleaning waste. Electric utility boiler tubes must be cleaned periodically to remove iron and copper deposits that form on interior surfaces, impeding heat transfer and diminishing power plant efficiency. The types of solutions commonly used to clean boiler tubes are acidic in nature (e.g., hydrochloric acid). Utilities typically clean their boiler tubes every 1 to 5 years. The volume of undiluted cleaning waste is usually about 125 gallons per megawatt of electricity produced per tube. When this material is combined with several boiler volumes of rinse water, the total volume can be several hundred thousand gallons for a large power plant. Although on an annual basis this represents less than a gallon per minute, in practice the material is generated in a short time and therefore must be handled in large volumes. Because of its pH or chromium content, some of this cleaning waste exhibits hazardous-waste characteristics as defined by the Resource Conservation and Recovery Act, considerably increasing disposal costs (Lott et al., 1989). Therefore, from a pollution-prevention point of view, options that minimize waste production, such as source reduction, substitution, or recycling, are preferred. One innovative electric utility company has initiated a program that eliminates disposal of the cleaning waste and provides a useful product to another industry. The utility treats the metal-bearing solution with lime to precipitate the metals that are in solution, primarily copper and iron. The clean liquid is then returned to the municipal wastewater system, and the resulting sludge is sent to a copper smelter in Arizona. The smelter recovers the copper value and uses the lime as a flux in the smelting process. The utility saves an estimated $400,000 per year by avoiding treatment and disposal costs. Other utilities have reduced their frequency of cleaning, which is a form of source reduction. Careful control of boiler-cycle water chemistry can reduce the amount of metal deposition in boiler tubes and therefore reduce the need for cleaning. Another option that appears promising is reuse of the solution in the FGD system. Laboratory tests have shown that the addition of chemical-cleaning waste slightly improves sulfur dioxide removal and increases limestone utilization while having no measurable neg-

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Page 94 ative impact on overall FGD system operation (Behrens and Holcome, 1992). ·      Petroleum-contaminated soil. Petroleum-contaminated soils are the result of leaks from aboveground and underground storage tanks. Such leaks are usually managed by removing the contaminated soil and transferring it to a secure landfill. As an alternative, one utility has found that the soil can be incorporated into asphalt to pave light-duty roads near its facilities. This practice has saved $350 per cubic yard in treatment costs for the contaminated soil, or between $270,000 and $385,000 per year, assuming the paving of one road per year. ·      Spent solvent. Utilities generate small quantities of spent solvent waste from routine operations such as parts cleaning, paint stripping, and vehicle maintenance. Because solvent waste is typically classified as hazardous, management practices are costly. Many utilities have already initiated solvent minimization programs. Typical steps include source reduction (i.e., using less solvent), substitution of less-toxic materials, and recycling. In terms of waste reduction, using less solvent is the simplest and often the least-expensive option. Worker training and good housekeeping have been shown to be effective methods. Limiting the availability of solvents at facilities is another way to reduce usage. Electric utilities are now seeking to specify and formulate nonhazardous universal solvents to replace the wide variety of products currently in use. A variety of nontraditional substitutes are available for halogenated organic solvents. These include sodium carbonate or sodium phosphate solutions, emulsion cleaners such as mineral spirits, and organic cleaners such as citrus-based D-limonene. Substitutes are generally less toxic but are also generally less effective, especially in electrical contact cleaning. Mechanical cleaning can, in many instances, be substituted for chemical cleaners. Extra "elbow grease" is an effective substitute, as is sand or bead blasting. Mechanical cleaning works well for paint stripping but is less satisfactory for degreasing and use on sensitive materials such as wood, plastic, or soft metal. A survey of electric utilities conducted by EPRI found that 46 percent of respondents employ some type of solvent recycling. In most cases, recycling is less expensive than disposing of spent solvent. Recycling can be done in three ways: (1) using an on-site batch or semicontinuous distillation process; (2) contracting with a commercial solvent recycler; or (3) using contractors who provide solvent and parts-cleaning equipment. EPRI has developed specifications for solvents in three categories: electrical equipment and parts cleaning, paint stripping, and burner tip cleaning. It has also recently completed a study with five utilities to examine

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Page 95 the effectiveness of approximately 15 nonhazardous solvents for a variety of applications and facilities. ·      Paint and paint-related waste. Paint and paint-related waste represent some of the most frequently generated hazardous wastes in the electric utility industry. In addition to paints and paint smudges, these include outdated (off-specification) paints, empty paint containers, solvent- and water-based equipment-cleaning residues and paint-removal and surface-preparation residues. Simple management options are available to minimize or even eliminate paint wastes. Some utilities focus on keeping painting equipment in use to reduce the frequency of cleaning, whereas others focus on maintaining the proper inventory of paint to reduce the generation of outdated paint and contaminated containers. Utilities are reexamining the frequency with which equipment is painted and are seeking alternative coating materials to eliminate the need for painting. Utilities are also seeking alternative methods for paint removal and surface preparation. Some companies have successfully removed paint by blasting with dry-ice pellets or commercial blasting materials that can be separated from removed paint and then reused. Efforts continue to quantify the costs of the available alternatives for paint removal and surface preparation. ·      Biofouling waste and wood waste. Biofouling waste includes plant species such as kelp and animal species such as Asiatic clams and shad. One utility has successfully composted shad bodies with waste wood, thereby eliminating two waste streams, in a demonstration project called Fish and Chips. Each spring, the utility collects about 300 tons of shad from its intake screen following an annual winter dieback of the fish population. It also has a steady stream of wood waste from construction projects and from routine sources such as shipping pallets and reels. Composting these wastes using native bacteria presents an attractive option, because it can deal with both waste streams. The wood is first chipped and then serves as the bulking agent to ensure there are air pockets for aerobic degradation. In addition, it is likely that the fine wood particles serve as a carbon source for the bacteria. The fish provide moisture, nitrogen, and other nutrients, in addition to serving as a carbon source for the bacteria. Windrows are established, and the two waste streams are biodegraded at temperatures sufficient for pathogen control. The utility estimates an annual savings of $58,000 for disposal of the fish, and a potential one-time savings of $480,000 for chips from a plant construction project. The preceding examples are just a few of the new approaches being tried by utilities to improve their environmental performance. A group of 60 EPRI member utilities have estimated cost savings from implementing these options ranging from $65,000 to $140,000 per utility annually, even without allowing for reduced potential future liability (Electric Power Research Institute, 1993).

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Page 96 Toward a More Sysyematic Approach: Life-Cycle Cost Management, Waste Accounting and Risk Management The electric utility industry is moving to a more systematic approach to managing waste materials through life-cycle cost management, waste accounting, and risk management. ·      Life-cycle cost management. Utilities buy, use, and dispose of thousands of different chemicals and materials each year.  Price has traditionally been the primary motivating force behind purchase decisions. However, the purchase price of a product or material might represent only a small fraction of its full cost. The cost of use and disposal often far outweighs the initial purchase price. Basing purchasing decisions on the initial cost of a product or material can lead to much greater costs over the long run. EPRI has defined life-cycle costs as all costs associated with a product, material, or process from purchase to potential post-disposal liability. Life-cycle cost management involves defining and characterizing costs, estimating and tracking cost elements, using these estimates in appropriate decisions, and coordinating these decisions across multiple individual and functional areas in an organization. Management of waste by employing life-cycle cost analyses can save money, encourage pollution prevention, reduce environmental impacts, and create new alternatives and solutions. EPRI is working with several utilities in developing methods, educational tools, cost worksheets, and computer software that will help utility staff make more informed decisions. These utilities have been assessing life-cycle costs associated with products such as batteries, utility poles, solvents, and paint and paint-removal waste. Available software packages and workbooks can structure life-cycle cost analyses, perform calculations, prompt the user with relevant advice, store data and analysis results, and allow multiple users to work together efficiently on a single analysis. Figure 3 shows an example of the application of life-cycle cost analysis. Two solvents are being compared: trichloroethane (TCA) and a citrus-based alternative. Using purchase cost only, TCA is the clear winner, but add use and disposal costs for 1 year of cleaning services, and the margin between the two choices becomes quite small. It falls within the uncertainties in the future price and disposal cost of TCA or in the amount of labor and materials needed to provide equivalent cleaning performance by the citrus-based product. The electric utility that performed this analysis carefully tested each cleaning method and concluded that the extra labor and materials needed for the citrus-cleaning process would exceed by no more than 5 to 20 percent the costs of comparable TCA cleaning, depending on the application. On the basis of these tests and a careful review of

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Page 97 FIGURE 3  Comparison of life-cycle costs for trichloroethane (TCA) and a citrus-based solvent. SOURCE: Electric Power Research Institute, 1994. the potential liabilities, the utility decided to make the switch to the citrus-based solvent. ·      Waste accounting. To determine what waste a facility produces, the quantity of waste generated, and the amount of progress toward reducing waste volumes, an effective waste-accounting methodology is imperative. EPRI is working with electric utilities to develop an inexpensive, field-applicable mechanism for organizing and collecting waste-generation data at utilities. The methodology has been tested at three different types of facilities and has been coded for software implementation. This software (ASAPP, or Accounting Software Application for Pollution Prevention) is now available. It tracks the movement of materials through a company from the time they are designated as waste to their ultimate disposal. It facilitates environmental reporting, the assessment of pollution-prevention opportunities, and performance tracking. Further development of the software, currently in progress, will carry the tracking back to an earlier stage—the initial acquisition of the material by the company. This refinement will enable ASAPP to be more effective as a tool for assessing source reduction and substitution options.

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Page 98 ·      Risk management. For utilities to choose among waste-minimization or pollution-prevention options, they must understand the risks associated with each option. EPRI has developed a risk-management tool to aid management of noncombustible waste (NCW). Called the NCW Manager, the tool allows users to compare environmental and safety risks, direct and indirect costs, and potential liabilities for each option. EPRI is developing modules of NCW Manager to address specific utility wastes. A module on paint waste recently became available, and a module on boiler chemical-cleaning waste is being prepared. Plans are under way to combine these pollution-prevention reports, worksheets, and software tools in a pollution-prevention workstation, which will allow coordinated use of all tools with single entry of utility data. The development of these kinds of guidelines and tools will help utilities move pollution-prevention activities from a research, assessment, and specific-application mode toward sustained, routine business practice. Eventually, these activities will become an integral part of continually improving environmental performance. Full-Cost Accounting Full-cost accounting is a development of life-cycle analysis and waste accounting. This approach attempts to price goods and services to reflect their environmental costs (i.e., the environmental externalities of their production, use, recycling, and disposal). Full-cost accounting is highly controversial, difficult to implement, and subject to a high degree of uncertainty and potential bias. However, because of its potential for integrating environmental considerations into economic decision making, and thus taking rational steps toward environmental improvement, it cannot be ignored. Some companies see full-cost accounting as providing a competitive edge, like Volkswagen in Germany, which will recoup its Golf automobiles at the end of their useful life. Firms taking this approach must build the recycling or disposal cost into the initial purchase price. Meanwhile, governments and regulatory bodies are attempting to include full-cost accounting in a rudimentary form through environmental taxes and by weighing concerns about externalities when deciding to build new energy facilities. The key will be to continue building knowledge and consensus, develop new tools like life-cycle analysis, and target scientific investigation to produce more reliable information on environmental costs. Popoff and Buzzelli (1993, p. 69) observed that "when implemented correctly, full-cost accounting will improve environmental performance more than any other action, program, or regulation in place today." In the case of the utility industry, pooling resources with regulators to try to arrive at a reasonable consensus about the best ways to internalize environmental costs could be of long-term benefit to the industry. Research on valuing environ-

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Page 99 mental damages should also be consistent with developing a market-based approach to environmental regulation, that is, reducing the environmental impacts at the lowest cost to society. Conclusion Electricity can play a vital role in achieving economic growth and sustainability in a way that does not sacrifice environmental quality. The ability to convert a wide range of raw energy sources into clean, efficient power for a host of applications gives electricity unique advantages. The trailblazing technologies of the late twentieth and early twenty-first centuries are likely to open the door to a new cycle of growth in the use of electricity. Although it is difficult to see exactly how this new era will unfold, it can be said with some certainty that larger forces—even global forces—will shape electricity's role over the next 50 years. Clearly, scientific and technological developments outside the power industry—in materials, biotechnology, telecommunications, and other fields—will affect this industry. Previous electricity growth cycles, such as that which occurred just after World War II, indicate that it is the innovation during the first decade or two of the cycle that creates the growth surge. A new cycle of growth in electricity use places on the providers of electric power a particular responsibility for environmental excellence. It also puts them at the focal point of any industrial-ecology system underpinning a twenty-first-century economy. Through the benefits of technological innovation made possible by electricity, electric utilities have an opportunity to be key players in economic development worldwide. Only through their continued careful attention to the clean and efficient generation and delivery of electricity, however, can they play their commensurate role in contributing to improved environmental quality and sustainable development. Note 1. More examples can be found in the April/May 1992 issue of EPRI Journal. References American Coal Ash Association (ACAA). 1993. Coal Combustion By-Product Production and Use, November 1994. Alexandria, Va.: ACAA. Behrens, G.P., and L.J. Holcombe. 1992. Boiler Chemical-Cleaning Waste Management Manual. EPRI Report TR-101095. Palo Alto, Calif.: Electric Power Research Institute. Brendel, G.F., and T.N. Kyper. 1992. Institutional Constraints to Coal Fly Ash Use in Construction. EPRI Final Report TR-101686. Palo Alto, Calif.: Electric Power Research Institute. Deloitte Touche Tomatsu International (DTTI). 1993. Coming Clean: Corporate Environmental Reporting. International Institute for Sustainable Development, and SustainAbility, Ltd. London: DTTI. Electric Power Research Institute (EPRI). 1988. Fly Ash Construction Manual for Road and Site Applications. EPRI Report CS-5981. Palo Alto, Calif.: EPRI.

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Page 100 Electric Power Research Institute (EPRI). 1993. Options for Handling Noncombustion Wastes. 2nd ed. EPRI TR-103010. Palo Alto, Calif.: EPRI. Electric Power Research Institute (EPRI). 1994. Management of Life Cycle Costs. EPRI Research Project E006. Palo Alto, Calif.: EPRI. Elkington, J., and N. Robins. 1994. The Corporate Environmental Report: Measuring Industry's Progress Towards Sustainable Development. New York: United Nations Environmental Program. EPRI Journal. 1992. Electricity for increasing energy efficiency. 17(3) (April/May). Fiksell, J. 1993. Applying Design for Environment in the Electric Power Industry. Mountain View, Calif.: Decision Focus. Foundry Management and Technology. 1991. May, p. 47. Grann, H. 1997. The industrial symbiosis at Kalundborg, Denmark. Pp. 117-123 in The Industrial Green Game: Implications for Environmental Design and Management, D.J. Richards, ed. Washington, D.C.: National Academy Press. Hedstrom, G.S., and R.A.N. McLean. 1993. Six imperatives for excellence in environmental management. Prism, 3rd Quarter. Lott, T., L. Holcombe, and W. Micheletti. 1989. Boiler chemical cleaning waste treatment and disposal options. Paper presented at the 50th Annual Meeting of the International Water Conference, Pittsburgh, Pa., Oct. 23-25. Metcalf and Eddy Inc. 1991. Wastewater Engineering, p. 166. New York: McGraw-Hill. Patelunas, G. M. 1988. High Volume Fly Ash Utilization Projects in the United States and Canada. 2nd ed. EPRI Report CS-4446. Palo Alto, Calif.: Electric Power Research Institute. Popoff, F., and D.T. Buzelli. 1993. Viewpoint: Full cost accounting. Prism, 3rd Quarter. Sauber, B. 1992. Mobile demonstration plant will produce fly ash-based cellular concrete. Concrete Technology Today 13(1)(March). Tibbs, H. 1992. Industrial ecology, an environmental agenda for industry. Whole Earth Review 77:4. United Nations Environmental Program, Industry and Environment Office (UNEP/IEO). 1991. Companies' Organization and Public Communication on Environmental Issues, UNEP Industry and Environment Office Technical Report Series, No. 6. Paris: UNEP/IEO. U.S. Environmental Protection Agency (EPA). 1994. Medical Waste Incinerators Background Information For Proposed Standards and Guidelines; Industry Profile Report For New and Existing Facilites. Washington, D.C.: EPA. Wilson, J.S., and J.L. Greeno. 1993. Business and the environment: The shape of things to come. Prism, 3rd Quarter 1993. World Commission on Environment and Development. 1987. Our Common Future. New York: Oxford University Press. Yeager, K.E. 1994. Technology triggering structural change. Electric Perspectives 18(1).