The federal government has given notice of proposed Regulations for the Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity. The proposed Regulations are intended to help Canada meet its commitment to reduced greenhouse gas emissions to 17% below 2005 levels by 2020.

The Regulations will set a stringent performance standard to come into effect on July 1, 2015 for new coal-fired power plants and those that have reached their end of their useful life. The effect will be to phase-out high emitting coal-fired generation and promote a transition towards lower or non-emitting types of generation such as high efficiency natural gas, renewable energy or fossil fuel fired power with carbon capture and storage.

Under the proposed Regulations the performance standard is set at an emissions intensity level fixed at 375 tonnes of CO2/GWh. The performance standard will be applied to new and coal-fired electricity generation units. New units are units that start producing electricity commercially on or after July 1, 2015. Generally speaking, old units are defined as units that have reached their end of useful life date which is the later of 45 years from the units’ commissioning dates’ or the end of their power purchase agreements. Existing units that were operating before July 1, 2015 but have not reached their end of useful of life date are not directly subject to the performance standard.

As well, time limited flexibilities would be made available to ensure the integrity of the electricity system while maintaining environmental objectives of emission reductions. These flexibilities are to be available through application and are to be subject to ministerial approval.

Regulated entities would be subject to enforcement and compliance requirements and penalties under the Canadian Environmental Protection Act, 1999.

Final regulations are expected to be published in 2012.

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