On Saturday, August 27, 2011 the Federal Government released proposed legislation setting new carbon emission standards for coal-fired power plants. The proposed legislation appears in the most recent issue of the Canada Gazette Part 1, and is titled “Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations”. The proposed regulations are subject to a 60 day consultation period in which the public, industry, environmental groups, and other interested parties can offer input. Alberta currently derives approximately 46% of its electric energy from coal-fired plants.

The proposed regulations provide that new coal-fired power plants coming online after July 1, 2015 will be limited to carbon emissions equal to those of power plants fueled by burning natural gas.  

The proposed regulations pose some economic and technical challenges for Alberta’s coal-fired power plants. Questions are arising about how existing coal-fired plants will be utilized when current operating approvals expire – will it be economical and technically feasible to continue operating under the new emission standards, or will some facilities need to be shut down? There are also concerns that Alberta may face an energy shortage if older coal-fired plants are shut down before sufficient electric energy generation that is compliant with the new emissions standards is up and running.

The new carbon emission standards may encourage industry to refine and develop new technologies that produce electricity with fewer emissions. Coal gasification is one such technology that is currently being developed in Alberta. The more stringent emissions standards on the horizon, and the looming threat of energy shortages in the Province, provide incentive to develop new, less carbon-intense technologies for coal generated electricity.