Data Centers - Strategizing for Flexible Air Quality Permits

A long time ago in a galaxy far, far away…air quality permits were simply a few pages allowing construction and operation of data centers.

By: Ali Farnoud, Principal at Ramboll

With the exponential increase in the number of data centers across the United States and the quantity of emergency generators employed, air quality permits have grown increasingly complex, resulting in conditions that could impact operational flexibility. However, data centers may utilize various tools to allow more flexibility in their air permits. For example, a limit of 4,000 hours per year may obstruct a data center operator’s ability to run the engines during an emergency for a facility that operates 120 engines, whereas the same facility may not feel as stifled with a limit of 700,000 gallons of fuel consumption per year, which meets the exact same regulatory purpose. In a world of convoluted air quality permits, data centers should strategize the approach to air permitting early in the design process to ensure that they will not be blindsided by impractical air permit conditions.

Multiple factors impact a facility’s air quality permit strategy, including:

- Attainment status: The attainment status of an area describes the area’s proximity to the National Ambient Air Quality Standards (NAAQS) for a certain pollutant. Multiple areas in the United States are considered “nonattainment” with respect to ozone and particulate matter, resulting in strict regulations for emissions of nitrogen oxides (NOX) and volatile organic compounds, ozone precursors, and particulate matter (PM). As NOX and PM are also the two main pollutants generated by diesel combustion, nonattainment areas could result in lower allowable emissions for data centers before stringent permit requirements apply. For example, an area in attainment for ozone typically has allowable emissions of up to the Title V major source threshold of 100 tons per year of NOX before the need to study emission controls while an area in severe nonattainment means that NOX emissions of 25 tons per year could trigger such requirements. The ability to later modify the data center is also severely limited in nonattainment areas. For projects exceeding the major source threshold and certain modification threshold, the facility is required to purchase Emission Reduction Credits (ERCs), which are expensive and, in some locations, unavailable.

- Runtime Hours: Most data centers prefer to stay below the Title V and/or Nonattainment New Source Review (NNSR) major source threshold(s) to avoid stricter regulations. In other words, in an area with a major source threshold of 100 tons per year, the requested regulatory limit would be, at most, 99.9 tons per year. The main question then, is the number of hours the emergency generators can operate before bumping against this limit. If, for instance, the limit is 50 tons per year of NOX in a serious nonattainment area and each generator emits up to 50 pounds per hour of NOX, there will be 2,000 hours of runtime available for the entire facility. This may be enough runtime for a data center with 40 generators, but certainly not enough if 100 generators are involved. In most cases, a fuel limit would allow additional flexibility. If the permit includes an hour limit, any operations of the generators will count towards the hour. However, if the permit includes a fuel limit instead, typical maintenance and testing operations that combust a small amount of fuel will not have a significant impact on the facility’s ability to operate. Calculating the emissions directly using the load percentages, guaranteed emission rates at each load, and hours of operation at each load is another flexible methodology if such data could be easily obtained, but this approach requires a conversation with the permitting agency.

Regardless of the approach, by planning the air permitting process with a target amount of emergency runtime hours needed after the planned maintenance and testing hours are excluded, we are able to provide immense clarity to the entire air permitting process and need for emission controls. Should emission controls such as selective catalytic reduction (SCR) be necessary to achieve the desired emergency runtime hours, this decision can be made in advance to avoid long permitting times, significant changes in engineering design, and unexpected increases to project capital budgets.

- Emergency vs. Non-emergency Operations: While the operation of emergency generators is primarily limited to maintenance, testing, and emergency, federal regulations recognize that the engines can be used for certain non-emergency operations outside of peak shaving and generating income for the facility and grant an annual 50-hour allowance for such purposes. The definition of emergency generators in some states differ from the federal definition and, therefore, some states do not allow for such non-emergency operations. The regulatory nuances should be reviewed prior to obtaining an air permit. If certain operations are essential to the facility, alternative permitting options can be considered.

- Expansion Plans: The full build for a data center is rarely permitted at the outset. Data centers usually permit individual expansions as new customers approach them or as certain design milestones at the company solidify. There should be multiple considerations that are made prior to such phased permitting approach. First, it usually benefits the data center to consider the possibility of any future expansion plans from the beginning. The facility may be able to live with a limit of 50 tons per year of NOX with the first two phases but not after additional phases are implemented. If the facility decides to stay below the regulatory threshold, the potential for additional control equipment and retrofitting should be reviewed to ensure that the design will allow for such retrofits in the future. Secondly, there are certain regulations related to project aggregation that could apply to the facility which could prevent a phased permitting approach. Each phase should conduct a project aggregation analysis to ensure compliance with the regulations.

- State Regulatory Requirements: Various states have implemented permitting policies either covering all industries or specific to data centers. Such regulations should be reviewed before obtaining an air permit. For instance, some states require air dispersion modeling, which could mean significant limitations on facility operations or require emission control installation. Other states require a Best Available Control Technology analysis regardless of the major source threshold. These situations could result in significant limitations for the facility. Pre-planning as well as a pre-application meeting with the state could inform data centers about any potential state policies.

Each of the items noted above comes with significant caveats. For example, a state could require air dispersion modeling only if the facility exceeds a certain threshold separate from the major source threshold. However, the alphabet of an initial permit strategy remains the same, and given the difference among state regulation and policies, it always starts with the location. In his fantasy novel, The Hobbit, J.R.R Tolkien says, “It does not do to leave a live dragon out of your calculations, if you live near one.” That is particularly true if the live dragon could significantly impact construction schedule or the capital expenditure.

About Author:

Ali Farnoud is a Principal with Ramboll focusing on air quality permitting and regulatory compliance. His consulting experience spans over 15 years and various industries, but given his familiarity with the engine regulations, he serves as Ramboll’s global air quality subject matter expert for data centers.

Ali holds a doctoral degree in Environmental Engineering with a research focus on controlling diesel particulate matter. He has taught various air quality courses, including over 40 workshops discussing state regulations.

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