Coal-fired electricity generation regulations - overview

The Regulations are adopted under the Canadian Environmental Protection Act (CEPA), 1999 and apply a performance standard to new coal-fired electricity generation units, and units that have reached the end of their useful life. The performance standard will come into effect on July 1st, 2015.

Coverage

New Coal Unit: A unit that starts producing electricity commercially on or after July 1st, 2015

End-of-life Coal Unit: In general, a unit that is 50 years of age. The end-of-useful-life date of a unit is determined according to the following principle:

• Units commissioned before 1975 will reach their end-of-useful-life on December 31st 2019 or on December 31st of the 50thyear that follows their commissioning date, whichever comes first.
• Units commissioned after 1974 but before 1986 will reach their end-of-useful-life on December 31st of 2029 or on December 31st of the 50th year that follows their commissioning date, whichever comes first.
• Units commissioned in or after 1986 will reach their end-of-useful-life on December 31st of the 50th year that follows their commissioning date.

Coal Unit: A unit that burns coal, exclusively or in combination with other fuels, for the purpose of producing electricity

Petroleum Coke: Petroleum coke is assimilated to coal under the regulation, and therefore will be regulated in the same manner

Covers emissions of Carbon Dioxide only: Carbon dioxide represents 98% of GHG emissions from coal-fired units

Performance Standard

The performance standard is set at the emissions intensity level of Natural Gas Combined Cycle (NGCC) technology - a high-efficiency type of natural gas generation - and is fixed at 420 t/GWh.

The performance standard applies to new and end-of-life coal units.

Carbon Capture and Storage

For new and end-of-life coal units

Units that incorporate technology for CCS can apply to receive a temporary exemption from the performance standard until December 31, 2024. Units will have to provide documented evidence that they are meeting yearly regulated construction milestones.

These milestones include:

• Complete Front End Engineering and Design Study by January 1, 2020;
• Purchase all major pieces of capture element of the CCS system by January 1, 2021;
• Take all necessary steps to obtain regulatory approvals for the capture element of the CCS system by January 1, 2022;
• Have contracts in place concerning the transportation and storage of CO2 by January 1, 2022; and
• Begin commissioning stage of CCS system including the capture, transport and storage of CO2 by January 1, 2024

For existing units

If a generator installs a CCS system on an existing unit prior to its end-of-useful-life then they may be deferred from meeting the performance standard on an end-of-useful-life unit for 2 years.

Other Provisions

Substitution

1. A unit may swap its performance standard compliance obligation with another unit provided that both units have the same owner and are of similar size. The swap would last until the substituted unit reaches its own end-of-useful-life.

2. After June 30, 2015, a unit that is permanently shut down ahead of its end-of-useful- life date may swap any leftover time to its useful life to one or many other unit(s) provided that all units have the same owner, are in the same province and the total potential electricity production over the period being swapped is equivalent.

Switch of fuel

A unit that was re-commissioned to burn coal after having been commissioned to burn a fuel other than coal will receive an 18 month extension to its end-of-useful life date, as long as the re-commissioning was done prior to June 23rd, 2010.

Emergency circumstances

The Minister will grant a temporary exemption from meeting the performance standard under emergency circumstances where there is a disruption, or there is a significant risk of disruption, to the electricity supply and the unit in question will mediate this disruption.

The emergency circumstance must be extraordinary, unforeseen, or irresistible or one which is declared by the province where the unit is located

Standby unit

A unit may be kept in reduced operation as a standby unit (9% or less of its capacity factor) in order to provide transition flexibility for new generation to be developed to replace current coal-fired generation. The provision will not extend beyond December 31st, 2030.