On February 16, 2024, the federal government released an update with new design options being considered for the Clean Electricity Regulations.

The draft Regulations were released on August 10, 2023, and would limit how utilities can use unabated fossil fuels to generate electricity beginning in 2035. Several provinces, utilities, and energy sector stakeholders, among others, have raised concerns with the draft Regulations, especially regarding a lack of flexibility and related implementation costs.

Overview of design changes

New design options being considered would increase flexibility for utilities to help backstop variable generation from renewables, especially during demand peaks. Under the draft Regulations, any new generating unit (over 25 MW in size) would need to produce less than 30 tonnes of CO2 emissions per GWh.

The new emissions limit approach would have four elements:

  1. Change the regulated performance standard from a fixed emissions intensity standard that applies uniformly to all units to an annual emission limit (in tonnes) that is tailored to each unit’s capacity;
  2. Adjust the underlying performance standard used to calculate each unit’s emission limit;
  3. Allow regulated parties that own or operate multiple units to pool the emission limits of their individual existing units operating in the same jurisdiction; and,
  4. Allow a unit to emit over its emissions limit by a prescribed additional amount provided it remits GHG offsets to account for all excess emissions.

The proposed changes would enable more efficient, less emitting generation units to run for a longer period of time.

The federal government is also considering changes to limits proposed for; end of a generating unit’s prescribed life, new generation builds, cogeneration, size thresholds, and for emergency situations.

Initial feedback

It is clear the federal government now recognizes the draft Clean Electricity Regulations will challenge utilities’ abilities affordability and reliability in the future, in some provinces more than others. While the new design options are encouraging, too few details have been provided to help utilities and other generators understand the implications of the proposed changes.

The Centre believes a more thorough overview of the changes is necessary, including another robust consultation period to ensure the final Regulations are actionable and meet desired emission reduction goals.

Environment and Climate Change Canada is accepting feedback on new design options being considered for the final Clean Electricity Regulations by email ecd-dec@ec.gc.ca until March 15, 2024.

More information

Clean Electricity Regulations: Public Update

Atlantica Centre for Energy’s feedback to draft Clean Electricity Regulations