On November 21, 2016, the Government of Canada announced that it plans to phase out coal-powered electricity and accelerate the move to new sources of clean energy by 2030 (the Announcement). The goal of the Announcement is to have Canada producing 90 percent of its electricity from all clean sources (including nuclear) by the 2030 target date, up from the 80 percent which it currently produces.
As part of the Announcement, the Federal government has proposed amendments to the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations, SOR/2012-167 (the Regulations). The Regulations currently apply stringent performance standards of 420 tonnes of carbon dioxide per gigawatt hour (tCO2/GWh) to both coal-fired electricity-generation units (the Units) that are newly built, and to Units that have reached the end of their useful life (generally defined as 50 years of operation from the Unit’s commissioning date). Under the amendments to the Regulations, these performance standards will apply to Units as of 2030, even if the Units have not reached the end of their useful life (see the Backgrounder on this here). This is expected to accelerate the phase-out of traditional coal-fired generation across Canada.
The amendments to the Regulations will also include performance standards for natural gas-fired electricity generation, and will cover new and modified natural gas-fired combustion engines that sell or distribute more than 33 percent of their potential electricity output to the electrical grid. As stated, the purpose of these amendments is to ensure that new natural gas-fired units are built using efficient technology and to set clear parameters around the use of boilers converted from coal to run on natural gas.
The Federal government has made it clear that equivalency agreements with provinces may be established under which the federal Regulations would stand down, and the provincial regime would apply, if there is an enforceable provincial regime that delivers an equivalent environmental outcome (the Equivalency Agreement). To this end, the Federal government has already stated that it has approached Nova Scotia to negotiate a new Equivalency Agreement on the accelerated coal phase-out under the Announcement.
The Announcement builds on “Canada’s Mid-Century Long-Term Low-Greenhouse Gas Development Strategy” (the Strategy), recently unveiled at the UN Climate Change Conference 2016 in Marrakech (a link to a copy of the Strategy can be found here). The Strategy is intended to help guide Canada’s transition to a low-carbon economy and help to meet or exceed its 2030 emissions-reduction targets.
The timing of the Announcement and the Strategy is not coincidental – the Federal government has unveiled both just ahead of the planned First Ministers’ meeting in December 2016, where it is expected that Prime Minister Justin Trudeau will push for a pan-Canadian climate change framework.