Calpine Corp. last week received final approval to build its long-delayed 600-MW Russell City Energy Center in the City of Hayward, Calif. The Prevention of Significant Deterioration (PSD) permit issued by the Bay Area Air Quality Management District (BAAQMD) puts limits on the natural gas–fired power plant’s carbon emissions.

BAAQMD said in a statement on Feb. 4 that it was issuing the PSD permit on behalf of the U.S. Environmental Protection Agency (EPA), after lengthy periods of public debate and comment. “The resulting permit is more stringent and will include the tightest emission limits of any power plant in the Bay Area,” it said.

The Calpine gas plant will not be the first to have limits on GHG emissions, however. Nonemergency gas generators in Delaware must meet GHG limits under that state’s regulations. Several generators that produce less than 10 MW have been approved under these rules.

The BAAQMD’s action comes a day after the EPA senior policy advisory committee voted on guidelines for issuing permits to major sources of greenhouse gas (GHG) emissions. The agency has yet to make public a summary of that meeting, but Houston-based Calpine reported that the Russell City Energy Center PSD permit had been presented as a “case study” for how the existing Clean Air Act can be used to regulate GHG emissions.

Meanwhile, in California, pressure is mounting to suspend California’s proposed carbon cap-and-trade law, A.B. 32, until unemployment dips below 5.5%. Voters are expected to decide on the measure this fall.

The Hayward combined-cycle power plant will be designed to produce 50% less GHG emissions than “advanced” coal plants and 25% less GHG emissions than the standard set for power plants by the California Public Utilities Commission (CPUC), Calpine said. Rules adopted by the state in 2007 allow California’s utilities to only buy electricity from plants whose emission levels are the same as or lower than a typical natural gas–fired power plant’s. Those rules have stymied the construction of coal power plants in California.

The Russell Energy Center will consist of two combustion turbine generators, two heat-recovery steam boilers, a steam turbine generator and associated equipment, a wet cooling system, and a diesel fire pump. The approved permit includes the BAAQMD’s requirement that the power plant be equipped with air pollution control equipment, including selective catalytic reduction and oxidation catalysts. The facility will also reportedly use 100% reclaimed water from the City of Hayward’s Water Pollution Control Facility for cooling and will convert it to steam for electricity production.

The California Energy Commission granted a license for the plant in September 2007, and the CPUC approved a 10-year power purchase agreement in April 2009 under which California-based PG&E will purchase the electricity generated by the plant.

Calpine owns 65% equity interest and serves as development manager of the Russell City project. GE Energy Financial Services holds the remaining 35% equity interest in the project.

Sources: Calpine Corp. BAAQMD, EPA