Feedback for Draft Clean Electricity Regulations

The Atlantica Centre for Energy recently shared feedback for the federal government’s draft Clean Electricity Regulations, which would require electric utilities and some industry to significantly phase out fossil fuels used to generate electricity beginning in 2035.

On August 10, 2023, Minister Guilbeault announced the Draft Clean Electricity Regulations, along with a public consultation period, which ended on November 2, 2023.

Overview of draft Clean Electricity Regulations:

Public consultations for the proposed Clean Electricity Regulations began in 2022, but the Draft was delayed by several months as the federal government worked with provinces and utilities to add flexibility.

The draft Regulations limit how utilities can use unabated fossil fuels to generate electricity beginning in 2035. Any new generating unit (over 25 MW in size) would need to produce less than 30 tonnes of CO2 emissions per GWh. The Regulations also propose to stop building new emitting fossil fuel electricity generation units beginning in 2025. Those units continuing to operate in 2035 and beyond are limited to operating 450 hours annually and/or emitting 150,000t of CO2 per year. For the Atlantic provinces, this means any fossil fuel-fired electricity generation would be used to help meet demand peaks (up to 18 days per year).

Utilities must instead rely on renewable sources including wind, solar and hydropower, as well as non-emitting sources including nuclear, natural gas with CCUS, biomass and other biofuels. The draft Regulations, as well as the requirement to phase out coal-fired generation by 2030, will impact Nova Scotia and New Brunswick most of the Atlantic provinces. Integrated Resource Plans in Nova Scotia and New Brunswick currently incorporate most of the draft Regulations.

The Regulations are expected to be finalized in 2024.

Atlantica’s Feedback:

After speaking with stakeholders across Atlantic Canada, Atlantica shared feedback with the federal government covering five key topics which are important considerations to changes to the draft Regulations; regional differences, affordability, energy security and reliability, transparency, and equitability.

While the Draft Regulations are more flexible than what was originally proposed, Atlantica believes they remain too broad in scope to recognize important regional nuances between provinces from natural resources availability to population demographics.

  • Regional differences:
    • The Atlantica Centre for Energy proposes the Regulations be amended to allow fleet averaging of emissions, on a rolling average basis, to further add flexibility for utilities and encourage incremental efficiencies in existing assets and processes.
    • The Atlantica Centre for Energy proposes the Regulations further explore average emission thresholds for fleet assets in addition to electricity imported and/or exported, to ensure utilities benefit if purchasing non-emitting electricity from another jurisdiction.
    • The Atlantica Centre for Energy proposes the Regulations be amended to exempt all cogeneration.
    • The Atlantica Centre for Energy proposes the Regulations be amended to allow a credit system to encourage blended low carbon fuels, and other carbon offsets to achieve emission intensity requirements prescribed under the Regulations.
  • Affordability:
    • The Atlantica Centre for Energy proposes the Regulations extend the emission performance standard for any unit “significantly modified,” or the ‘any other’ category to its otherwise reasonable operating life (possibly beyond 20 years).
  • Security and reliability:
    • The Atlantica Centre for Energy proposes the Regulations be amended to permit new natural gas-fired electricity generation until 2030.
    • The Atlantica Centre for Energy proposes the Regulations be amended to consider implementation delays on a case-by-case basis to ensure utilities and their ratepayers are not punished for unforeseen infrastructure delays.
    • The Atlantica Centre for Energy proposes the Regulations be amended to exempt any emergency generators operating with a nuclear facility.
    • The Atlantica Centre for Energy proposes the Regulations be reviewed every five years to ensure pathways are achievable.
  • Transparency:
    • The Atlantica Centre for Energy proposes the Regulations’ RIAS be expanded to share additional data for each province and territory to help residents better understand the cumulative costs of the electricity transition to promote acceptance as costs rise in the future.
  • Equitability:
    • The Atlantica Centre for Energy proposes that federal financial tools designed to decarbonize electricity systems and grow electricity demand provide additional targeted support to provinces based on how each is impacted by federal regulations.

 

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