Reducing NOx by one ton is worth 14 times more than it was three weeks ago, and is expected to increase further. Yes, you read that correctly: In 21 days NOx allowances have increased by 1,400 percent.

NYMEX (the New York Mercantile Exchange) is a good, up-to-date source for information on energy and emissions trading markets. The NYMEX futures market for 2009 vintage CAIR Annual NOx Allowances is currently at $3,850/ton, and this figure applies year-round.  Seasonal NOx is $700 for the ozone season. This equates to a current annualized value of NOx reduction of approximately $4,150/ton, which is generally consistent with the internal forecasts of several major generators employing NeuCo optimization products as part of their current NOx compliance strategy. 

A level of NOx reduction that would have provided a one-year payback on a 350 MW unit three weeks ago would now provide that same one-year payback on a 25 MW unit.  Of course, this is exaggerating the point a bit since the existing Seasonal Market was quite volatile and varied anywhere from $350-$5,000 per ton over the five years it applied.  But compared to the approximate average allowance prices for the SIP (State Implementation Plan) program, which applied to only the five month Ozone Season, the value of NOx reduction for CAIR vs. SIP averaged over the life of SIP is only more valuable by a factor of 5-7x.

Optimization has always been the most cost-effective means for addressing NOx compliance issues, even when compliance was only required for five months out of the year and combustion optimization was the only available software-based technology. Now with a year-round compliance requirement, high allowance prices that are expected to climb higher, and the availability of commercially proven integrated optimization for combustion and boiler cleanliness, the investment rationale is more compelling than ever.