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Charging to net-zero: Government releases draft Clean Electricity Regulations

By Nancy Rubin, K.C.

Environment and Climate Change Canada (ECCC) recently published a draft of the Clean Electricity Regulations (CER). The proposed Regulations work toward achieving a net-zero electricity-generating sector, helping Canada become a net-zero GHG emissions economy by 2050.

Members of the public are invited to comment on these regulations by November 2, 2023 through ECCC’s Online Regulatory Consultation System (ORCS), with final regulations expected to be published in 2024.

These regulations have specific relevance to the Atlantic region and its economies, especially where low and non-emitting electricity sources are concerned. In 2020, electricity generation by these sources averaged north of 70% in the region, with 100% generation in Prince Edward Island, and 97% in Newfoundland and Labrador. [1]

Owners of North American Electric Reliability Corporation-regulated (NERC-regulated) units should be aware that if implemented, the Regulations (except sections 32 and 33) will come into force on January 1, 2025 and will apply to generating units that sell electricity to the NERC-regulated grid, have a capacity equal to or greater than 25MW, and burn any amount of fossil fuel to generate electricity. Owners will also need to file yearly reports to ECCC. Violations of the CER are subject to the Compliance and Enforcement Policy for the Canadian Environmental Protection Act, 1999.

A key part of these regulations are set performance standards (of 30 tCO2e/GWh), and units will need to meet these standards by 2035. Exemptions include:

  • A unit, other than one combusting coal, may emit up to 150 kilotonnes of CO2 per year (150 kt/yr) if it operates at or below 450 hours per year (450 hr/yr), allowing for operation as a peaking unit at high demand times; or
  • A unit using carbon capture and storage may emit no more than an annual average of 40 t/GWh if it can demonstrate that the unit is capable of operating at 30 t/GWh (i.e. documentation showing that the unit operated at or below 30 t/GWh for 2 periods of at least 12 consecutive hours, with at least 4 months between those 2 periods in a given calendar year). This exception is only available until the earlier of 7 years after commissioning of a carbon capture and storage system or December 31, 2039; or
  • In an emergency circumstance (an extraordinary or unforeseen event) as provided by the Minister of the Environment.

Background

According to Canada’s 2022 National Inventory Report, Canada generated 575,000-Gigawatt hours (GWh) of electricity and emitted 62 Megatonnes (Mt) of carbon dioxide (CO2) equivalent (9.2% of total national GHG emissions). Of the electricity generated that year, 16% came from emitting electricity sources that use fossil fuels (e.g. coal, natural gas, other fuels such as refined petroleum products). 84% were from low and non-emitting electricity sources that use renewable fuels (e.g. nuclear and renewables, such as hydro, wind and solar) to power generation.


This update is intended for general information only. If you have any questions on the above we would invite you to contact the author or any other member of our Energy Group.

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[1] Source: 2022 NIR Website, download “can-2022-nir-14apr22.zip” file to see the 2022 NIR, Part 1, 2 and 3.

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