Ottawa: On August 27, 2011, Environment Canada published its draft Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations. “Our strategy to lower our emissions is based on making improvements sector by sector to sustain our economy and protect our environment,” said Minister Peter Kent prior to the release of the Regulation. “We are taking action in the electricity sector because we recognize the potential for significant emissions reductions.”
The regulation will apply a much tighter emission performance standard to new coal-fired power generation units and to those coal-fired units that have reached the end of their useful life. The federal government first announced plans to tighten the limits on greenhouse gas emissions from the electricity sector on June 23, 2010.
The consultation period on the regulation is ongoing and written submissions were accepted by Environment Canada until October 26, 2011. The final Regulation is expected to be published in 2012, with an initial effective date of July 1, 2015.
It is anticipated that the government will present the Regulation as part of its climate change and energy strategy going into the Kyoto Protocol negotiations in December and in further talks on the oilsands. “The Government of Canada is making progress towards our ambitious target of reducing our greenhouse gas emissions 17 per cent from 2005 levels by 2020 through a sector-by-sector approach aligned with the U.S.”
A bulletin from Macleod Dixon commented that “Starting on July 1, 2015, owners, operators and persons in charge, management of control of a Unit (“Responsible Persons”) must ensure that all New Units and Old Units meet a defined emissions performance standard and emit less than an average of 375 tonnes CO2/GWh electricity produced per year, which is analogous to the emissions performance of a combined cycle natural gas power plant. This standard applies only to CO2 emissions and does not include other greenhouse gases. The standard is also intended to cover CO2 emissions from SO2 sorbent technology, but is not intended to cover CO2 emissions that are captured, transported and stored in accordance with applicable laws. It also includes electricity generated for parasitic load. The Draft Coal Regulations therefore effectively mandate CCS (Carbon Capture and Storage) technology on all coal fired electricity generation stations on or before 2025.”
Certain provincial officials have raised objections to the Regulation, arguing that the proposed standard and exemptions do not allow the provinces enough flexibility to meet the targets in a manner appropriate for each province. Nova Scotia Environment Minister Sterling Belliveau said, “We are concerned the impacts are going to be a financial burden on Nova Scotia and we do not agree with the federal analysis on the impact to our province.” Alberta’s Environment Minister Rob Renner said, “One of the things that we’re very concerned about is that we don’t lose an opportunity through this process to develop and commercialize, in a significant way, clean-coal technology, carbon capture and storage.”
Elisabeth (Lisa) DeMarco of Macleod Dixon also noted that, “The Draft Coal Regulations are likely to have very significant implications for the Canadian federal-provincial constitutionally enshrined, division of power over electricity and natural resources, the regulation of CCS, and the regulation of CO2 and other greenhouse gases from related energy sources.” It is particularly noteworthy that Minister Kent recently announced the intention to extend the Regulation to gas-fired power generation facilities.