Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity: SOR/2018-261
Canada Gazette, Part II, Volume 152, Number 25
Registration
SOR/2018-261 November 30, 2018
CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999
P.C. 2018-1482 November 29, 2018
Whereas, pursuant to subsection 332(1) footnote a of the Canadian Environmental Protection Act, 1999 footnote b, the Minister of the Environment published in the Canada Gazette, Part I, on February 17, 2018, a copy of the proposed Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Regulations or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;
Whereas, pursuant to subsection 93(3) of that Act, the National Advisory Committee has been given an opportunity to provide its advice under section 6 footnote c of that Act;
And whereas, in accordance with subsection 93(4) of that Act, the Governor in Council is of the opinion that the proposed Regulations do not regulate an aspect of a substance that is regulated by or under any other Act of Parliament in a manner that provides, in the opinion of the Governor in Council, sufficient protection to the environment and human health;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment and the Minister of Health, pursuant to subsections 93(1) and 330(3.2) footnote d of the Canadian Environmental Protection Act, 1999 footnote b, makes the annexed Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity.
Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity
Overview
Purpose
1 These Regulations establish a regime for limiting carbon dioxide (CO2) emissions that result from the generation of electricity by means of thermal energy from the combustion of natural gas, whether in conjunction with other fuels, except coal, or not.
Interpretation
Definitions
2 (1) The following definitions apply in these Regulations.
Act means the Canadian Environmental Protection Act, 1999. (Loi)
API means the American Petroleum Institute. (API)
ASTM means ASTM International, formerly known as the American Society for Testing and Materials. (ASTM)
auditor means a person who
- (a) is independent of the responsible person that is to be audited; and
- (b) has knowledge of and has experience with respect to
- (i) the certification, operation and relative accuracy test audit of continuous emission monitoring systems, and
- (ii) quality assurance and quality control procedures in relation to those systems. (vérificateur)
authorized official means
- (a) in respect of a responsible person that is a corporation, an officer of the corporation who is authorized to act on its behalf;
- (b) in respect of a responsible person that is an individual, that individual or an individual who is authorized to act on that individual’s behalf; and
- (c) in respect of a responsible person that is another entity, a person authorized to act on that other entity’s behalf. (agent autorisé)
biomass means a fuel that consists only of non-fossilized, biodegradable organic material that originates from plants or animals but does not originate from a geological formation, and includes gases and liquids that are recovered from the decomposition of organic waste. (biomasse)
boiler unit means a unit that consists of at least one boiler but does not have a combustion engine. (groupe chaudière)
capacity means
- (a) in the case of a unit, the maximum continuous rating (the maximum net power that can be continuously sustained by the unit without the use of duct burners, at standard conditions), expressed in MW, as most recently reported to a provincial authority of competent jurisdiction or to the electric system operator in the province where the unit is located; and
- (b) in the case of a combustion engine, the manufacturer provided capacity, expressed in MW. (capacité)
combustion engine means an engine, other than an engine that is self-propelled or designed to be propelled while performing its function, that
- (a) operates according to the Brayton thermodynamic cycle and combusts natural gas to produce a net amount of motive power; or
- (b) combusts natural gas and uses reciprocating motion to convert thermal energy into mechanical work. (moteur à combustion)
combustion engine unit means a unit that consists of at least one combustion engine and, if applicable, a heat recovery system, but does not have a boiler. (groupe moteur à combustion)
continuous emission monitoring system or CEMS means equipment for the sampling, conditioning and analyzing of emissions from a given source and the recording of data related to those emissions. (système de mesure et d’enregistrement en continu des émissions ou SMECE)
facility means all buildings, other structures and equipment, whether the equipment is stationary or not, that are located on a single site or adjacent sites and that are operated as a single integrated site. (installation)
fossil fuel means a fuel other than biomass. (combustible fossile)
heat recovery system means equipment, other than a boiler, that extracts heat from a combustion engine’s exhaust gases in order to generate steam or hot water. (système de récupération de la chaleur)
heat to electricity ratio means, in respect of a unit, the total useful thermal energy production in a calendar year, expressed in GWh, divided by the total gross electricity generation in that calendar year, expressed in GWh. (rapport chaleur-électricité)
natural gas means a mixture of hydrocarbons — such as methane, ethane or propane — that is in a gaseous state at standard conditions and that is composed of at least 70% methane by volume or that has a higher heating value that is not less than 35 MJ/standard m3 and not more than 41 MJ/standard m3. It excludes landfill gas, digester gas, gas from wastewater treatment systems, refinery gas, sour gas, blast furnace gas, producer gas, coke oven gas, gas derived from petroleum coke or coal — including synthetic gas — or any gaseous fuel produced in a process that might result in highly variable sulphur content or heating value. (gaz naturel)
operator means a person who has the charge, management or control of a unit. (exploitant)
performance test verifier means a person who
- (a) is independent of the responsible person for which the performance test is being conducted; and
- (b) has knowledge of and has experience with respect to performance testing of boiler units. (vérificateur de l’essai de rendement)
potential electrical output means the quantity of electricity that would be generated by a unit in a calendar year if the unit were to operate at capacity at all times during that calendar year. (production potentielle d’électricité)
Reference Method means the document entitled Reference Method for Source Testing: Quantification of Carbon Dioxide Releases by Continuous Emission Monitoring Systems from Thermal Power Generation, June 2012, published by the Department of the Environment. (Méthode de référence)
responsible person means an owner or operator of a unit. (personne responsable)
standard conditions means a temperature of 15˚C and a pressure of 101.325 kPa. (conditions normales)
standard m3 means a volume expressed in cubic metres — at standard conditions. (m3 normalisé)
unit means an assembly comprised of a boiler or combustion engine and any other equipment that is physically connected to either, including duct burners and other combustion devices, heat recovery systems, steam turbines, generators and emission control devices and that operate together to generate electricity and, if applicable, produce useful thermal energy, from the combustion of natural gas. (groupe)
useful life, in respect of a boiler unit referred to in subsection 3(4), has the same meaning as in subsection 2(1) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations. (vie utile)
useful thermal energy means energy in the form of steam or hot water that is destined for a use — other than the generation of electricity — that would have required the consumption of energy in the form of fuel or electricity had that steam or hot water not been used. (énergie thermique utile)
Interpretation of documents incorporated by reference
(2) For the purposes of interpreting documents that are incorporated by reference into these Regulations, “should” must be read to mean “must” and any recommendation or suggestion must be read as an obligation.
Standards incorporated by reference
(3) Any standard of the ASTM, Gas Processors Association or the API that is incorporated by reference into these Regulations is incorporated as amended from time to time.
Application
New generation of electricity — boiler units
3 (1) These Regulations apply to any boiler unit that has a capacity of 25 MW or more, that begins generating electricity on or after January 1, 2019, beginning on January 1 of the calendar year during which it meets the following conditions:
- (a) more than 30% of its heat input, on average, during the calendar year, comes from the combustion of natural gas;
- (b) its heat to electricity ratio is not more than 0.9; and
- (c) a quantity of the electricity that it generates is sold or distributed to the electric grid.
New generation of electricity — combustion engine units
(2) These Regulations apply to any combustion engine unit that has a capacity of 25 MW or more, that begins generating electricity on or after January 1, 2021, beginning on January 1 of the calendar year during which it meets the following conditions:
- (a) more than 30% of its heat input, on average, during the calendar year, comes from the combustion of natural gas; and
- (b) 33% or more of its potential electrical output is sold or distributed to the electric grid, without regard to the quantity of electricity sold or distributed to the electric grid coming from the unit if the unit is equipped with replacement combustion engines that are temporarily installed, for a period of not more than 90 days, as part of repairs or maintenance, during the replacement period.
Existing generation of electricity
(3) These Regulations also apply to any unit referred to in subsection (1) or (2) that generated electricity at a facility before January 1, 2019 in the case of a boiler unit and before January 1, 2021 in the case of a combustion engine unit and
- (a) was moved to another facility on or after whichever of those dates is applicable; or
- (b) is a combustion engine unit for which more than 50% of the total capacity of the combustion engines comes from combustion engines installed on or after January 1, 2021, unless they are engines that have a capacity of 150 MW or less and are installed to replace engines that have a capacity of 150 MW or less and that are installed before January 1, 2021.
Significantly modified — conversion to natural gas
(4) These Regulations also apply to any boiler unit referred to in subsection (1) that was registered under subsection 4(1) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations, and that generated electricity before January 1, 2019, beginning on January 1 of the calendar year following that in which the unit ceases to combust coal.
Hybrid configuration
(5) If a combustion engine unit and a boiler unit share the same steam turbine, the provisions of these Regulations apply as follows:
- (a) with respect to a combustion engine unit, they apply to the assembly comprised of combustion engines and any other equipment connected to them including the steam turbine that it shares with the boiler unit; and
- (b) with respect to a boiler unit, they apply to the assembly comprised of boilers and any other equipment connected to them including the steam turbine that it shares with the combustion engine unit.
Non-application
(6) These Regulations do not apply to units with respect to a calendar year in which they generate electricity and, if applicable, produce useful thermal energy from the combustion of coal as defined in subsection 2(1) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations.
Requirements
Emission Intensity Limits
General
4 (1) A responsible person for a unit must not emit from the unit an amount of CO2 from the combustion of fossil fuels in the unit, that is, during a calendar year, on average, greater than any of the following intensity limits, as applicable:
- (a) 420 tonnes of CO2 emissions/GWh of energy produced
- (i) in the case of boiler units, other than those referred to in subsection 3(4), and
- (ii) in the case of combustion engine units that are equipped with at least one combustion engine that has a capacity of more than 150 MW; and
- (b) 550 tonnes of CO2 emissions/GWh of energy produced in the case of combustion engine units that are equipped with combustion engines that have a capacity of 150 MW or less.
Significantly modified boiler units
(2) It is prohibited for a responsible person for a boiler unit referred to in subsection 3(4) to emit from the boiler unit an amount of CO2, from the combustion of fossil fuels in the unit, that is, during a calendar year, on average, greater than 420 tonnes of CO2 emissions/GWh of energy produced, as applicable, beginning in
- (a) the year after the unit’s end of useful life, if the initial performance test conducted under subsection 5(1) indicates a CO2 emissions intensity greater than 600 t/GWh;
- (b) the sixth year after the unit’s end of useful life, if the initial performance test conducted under subsection 5(1) indicates a CO2 emissions intensity greater than 550 t/GWh and less than or equal to 600 t/GWh;
- (c) the ninth year after the unit’s end of useful life, if the initial performance test conducted under subsection 5(1) indicates a CO2 emissions intensity greater than 480 t/GWh and less than or equal to 550 t/GWh; or
- (d) the eleventh year after the unit’s end of useful life, if the initial performance test conducted under subsection 5(1) results in a CO2 emissions intensity less than or equal to 480 t/GWh.
Quantification of energy and emissions
(3) For the purposes of subsections (1) and (2),
- (a) the quantity of energy produced in the calendar year must be determined in accordance with section 11; and
- (b) the quantity of CO2 emissions produced in the calendar year must be determined in accordance with sections 12 to 18, as applicable.
Special Rules
(4) For the purposes of subsection (3), if, in the calendar year, one of the combustion engines of the unit is repaired or maintained and one or more replacement combustion engines are temporarily installed, the quantity of energy and CO2 emissions produced during the replacement period, to a maximum of 90 days per calendar year, are excluded from the calculation referred to in that paragraph.
Exception — boiler unit
(5) Despite subsection (1), a boiler unit that, in a calendar year, does not meet one of the conditions set out in subsection 3(1), is not subject to the emission intensity limit for that calendar year.
Exception — combustion engine
(6) Despite subsection (1), a combustion engine unit that, in a calendar year, does not meet one of the conditions set out in subsection 3(2), is not subject to the emission intensity limit for that calendar year.
Performance Tests — Significantly Modified Boiler Units
Initial performance test
5 (1) An initial performance test must be conducted in the presence of the performance test verifier and in accordance with subsection (3) to determine the CO2 emission intensity for a boiler unit referred to in subsection 3(4) within 12 months following
- (a) in the case of a unit that has ceased to combust coal before January 1, 2019, January 1, 2019; or
- (b) in the case of a unit that ceases to combust coal on or after January 1, 2019, the day on which electricity generated from the boiler unit was first sold or distributed to the electric grid, in the calendar year in which the unit becomes subject to these Regulations.
Annual performance test
(2) Performance tests are to be subsequently conducted annually to determine the CO2 emission intensity for the boiler unit in question, in accordance with subsection (3), for as long as the responsible person for that boiler unit does not have to meet the emission limit referred to in subsection 4(2).
Conditions — test
(3) The initial and annual performance test must consist of a continuous test that lasts at least two hours and does not exceed 100% of the unit’s capacity.
Quantification
(4) For the purposes of subsections (1) and (2),
- (a) the quantity of energy produced by the unit must be determined in accordance with section 11; and
- (b) the quantity of CO2 emitted by the unit must be determined in accordance with sections 12, 13 and 15 to 18, as applicable: however, all emissions must be quantified including those from the combustion of biomass.
Adaptation
(5) For the performance test, the reference to “calendar year” in sections 11, 12, 15, 17 and 18 and in the Reference Method is replaced with a reference to “performance test period”.
Requirement
6 A responsible person for a unit referred to in subsection 3(4) must obtain an annual performance test result that shows less than a 2% increase in emission intensity from the previous performance test.
Emergency Circumstances
Application for exemption
7 (1) A responsible person for a unit may, under an emergency circumstance described in subsection (2), apply to the Minister for an exemption from the application of subsection 4(1) or (2) in respect of the unit if, as a result of the emergency, the operator of the electricity grid in the province in which the unit is located or an official of that province responsible for ensuring and supervising the electricity supply orders the responsible person to produce electricity to avoid a threat to the supply or to restore that supply.
Definition of emergency circumstance
(2) An emergency circumstance is a circumstance
- (a) that arises due to an extraordinary, unforeseen and irresistible event; or
- (b) under which one or more of the measures referred to in paragraph 1(a) of the Regulations Prescribing Circumstances for Granting Waivers Pursuant to Section 147 of the Act has been made or issued in the province where the unit is located.
Deadline for application
(3) The application for the exemption must be provided to the Minister within 15 days after the day on which the emergency circumstance arises. The application must include the information referred to in section 1 and paragraphs 2(a), (b) and (d) of Schedule 1 or the unit’s registration number, if any, the date on which the emergency circumstance arose and information, along with supporting documents, to demonstrate that the conditions set out in subsection (1) are met.
Minister’s decision
(4) If the Minister is satisfied that the conditions set out in subsection (1) are met, the Minister must, within 30 days after the day on which the application is received,
- (a) grant the exemption; and
- (b) if the unit has not been assigned a registration number, assign a registration number and inform the responsible person of that number.
Duration of exemption
(5) The exemption becomes effective on the day on which the emergency circumstance arises and ceases to have effect on the earliest of
- (a) the ninetieth day after that day,
- (b) the day specified by the Minister,
- (c) the day on which the circumstance referred to in paragraph (2)(a) ceases to cause a disruption, or a significant risk of disruption, to the electricity supply in the province where the unit is located, and
- (d) the day on which the measure, if any, referred to in paragraph (2)(b) ceases to have effect.
Application for extension of exemption
8 (1) If the conditions set out in subsection 7(1) will continue to exist after the day on which the exemption granted under paragraph 7(4)(a) is to cease to have effect, the responsible person may, before that day, apply to the Minister for an extension of the exemption.
Contents of application
(2) The application must include the unit’s registration number and information, along with supporting documents, to demonstrate that
- (a) the conditions set out in subsection 7(1) will continue to exist after the day on which the exemption is to cease to have effect; and
- (b) measures — other than the operation of the unit while the exemption has effect — have been or are being taken to end, decrease the risk of or mitigate the consequences of the disruption.
Minister’s decision
(3) If the Minister is satisfied that the elements referred to in paragraphs (2)(a) and (b) have been demonstrated, the Minister must grant the extension within 15 days after the day on which the application is received.
Duration of extension
(4) The extension ceases to have effect on the earliest of
- (a) the ninetieth day after the day on which the application for the extension was made,
- (b) the day specified by the Minister, and
- (c) the day referred to in paragraph 7(5)(c).
Accuracy of Data
Measuring devices — installation, maintenance and calibration
9 (1) A responsible person for a unit must install, maintain and calibrate a measuring device — other than a continuous emission monitoring system and a measuring device that is subject to the Electricity and Gas Inspection Act — that is used for the purposes of these Regulations in accordance with the manufacturer’s instructions or any applicable generally recognized national or international industry standard.
Frequency of calibration
(2) The responsible person must calibrate each of the measuring devices at the greater of the following frequencies:
- (a) at least once in every calendar year but at least five months after a previous calibration, and
- (b) the minimum frequency recommended by the manufacturer.
Accuracy of measurements
(3) The responsible person must use measuring devices that enable measurements to be made with a degree of accuracy of ± 5%.
Certification of CEMS
10 The responsible person must certify the CEMS in accordance with section 5 of the Reference Method, before it is used for the purposes of these Regulations.
Quantification Rules
Production of Energy
Quantity of energy
11 (1) The quantity of energy produced by a given unit is determined by the formula
G + (0.75 × Hpnet)
where- G is
- (a) the gross quantity of electricity generated by the unit in the calendar year expressed in GWh, as measured at the electrical terminals of the generators of the unit using meters that comply with the requirements of the Electricity and Gas Inspection Act and the Electricity and Gas Inspection Regulations, or
- (b) in the case of a hybrid configuration – when the unit is either a combustion engine unit that shares a steam turbine with a boiler unit or a boiler unit that shares a steam turbine with a combustion engine unit – the quantity of electricity generated by the given unit in the calendar year expressed in GWh, determined by the formula in subsection (2); and
- Hpnet is the net quantity of useful thermal energy produced by the unit in a calendar year, expressed in GWh, determined by the formula in subsection (3).
Quantity of electricity — hybrid configuration
(2) The quantity of electricity generated by a given unit is determined by the formula
Gce + Gs − Gext
where- Gce is the gross quantity of electricity that is generated by the generators of the combustion engines in a combustion engine unit that shares a steam turbine with a boiler unit, in the calendar year, expressed in GWh, as measured at the electrical terminals of the generators of the combustion engines using meters that comply with the requirements of the Electricity and Gas Inspection Act and the Electricity and Gas Inspection Regulations, if the given unit for which the electricity is being quantified is a combustion engine unit, or equal to zero, if the given unit for which the electricity is being quantified is a boiler unit;
- Gs is the gross quantity of electricity that is generated by the generators of the shared steam turbine in the calendar year, expressed in GWh, as measured at the electrical terminals of the generators of the shared steam turbine using meters that comply with the requirements of the Electricity and Gas Inspection Act and the Electricity and Gas Inspection Regulations; and
- Gext is the quantity of electricity that is generated by the unit other than the given unit for which the electricity is being quantified, in the calendar year, expressed in GWh and that is determined by the formula
- Gs is the gross quantity of electricity that is generated by the generators of the shared steam turbine in the calendar year, expressed in GWh, as measured at the electrical terminals of the generators of the shared steam turbine using meters that comply with the requirements of the Electricity and Gas Inspection Act and the Electricity and Gas Inspection Regulations,
- t is the tth hour, where “t” goes from the number 1 to x and where x is the total number of hours during which the generators of the shared steam turbine generated electricity in the calendar year,
- j is the jth external heat stream, originating from the other unit where “j” goes from the number 1 to m and where m is the total number of external heat streams that contributed to the electricity generated by the generators of the shared steam turbine of the unit,
- h ext_j is the average specific enthalpy of the jth external heat stream, originating from the other unit that contributed to the electricity generated by the generators of the shared steam turbine, expressed in GJ/tonne, during period “t” and must be based on the measurement of the temperature and pressure of that heat stream and determined using a continuous measuring device,
- Mext_j is the mass flow of the jth external heat stream originating from the other unit that contributed to the electricity generated by the generators of the shared steam turbine, expressed in tonnes, during period “t”, determined using a continuous measuring device,
- k is the kth internal heat stream originating from the given unit, where “k” goes from the number 1 to l and where l is the total number of heat streams that originated from the combustion of fuel in the unit and that contributed to the electricity generated by the generators of the shared steam turbine,
- hint_k is the average specific enthalpy of the kth internal heat stream originating from the given unit and having contributed to the electricity generated by the generators of the shared steam turbine, expressed in GJ/tonne, during period “t” and must be based on the measurement of the temperature and pressure of that heat stream and determined using a continuous measuring device, and
- Mint_k is the mass flow of the kth internal heat stream originating from the given unit that contributed to the electricity generated by the generators of the shared steam turbine, expressed in tonnes, during period “t”, determined using a continuous measuring device.
Net quantity of useful thermal energy
(3) In the case of a unit that simultaneously generates electricity and produces useful thermal energy from the fuel combusted by a combustion engine or boiler, as the case may be, the net quantity of useful thermal energy produced by the unit in a calendar year, expressed in GWh, is determined by the formula
where- t is the tth hour, where “t” goes from the number 1 to x and where x is the total number of hours during which the unit produced useful thermal energy in the calendar year;
- i is the ith heat stream exiting the unit, where “i” goes from the number 1 to n and where n is the total number of heat streams exiting the unit;
- hout_i is the average specific enthalpy of the ith heat stream exiting the unit, expressed in GJ/tonne, during period “t” and must be based on the measurement of the temperature and pressure of that heat stream and determined using a continuous measuring device;
- Mout_i is the mass flow of the ith heat stream exiting the unit, expressed in tonnes, during period “t”, determined using a continuous measuring device;
- j is the jth heat stream — other than condensate return — entering the unit, where “j” goes from the number 1 to m and where m is the total number of heat streams entering the unit;
- hin_j is the average specific enthalpy of the jth heat stream — other than condensate return — entering the unit, expressed in GJ/tonne, during period “t” and must be based on the measurement of the temperature and pressure of that heat stream and determined using a continuous measuring device; and
- Min_j is the mass flow of the jth heat stream — other than condensate return — entering the unit, expressed in tonnes, during period “t”, determined using a continuous measuring device.
CO2 Emissions
Quantification Methods
Choice of method
12 The quantity of CO2 emissions resulting from the combustion of fossil fuels in a unit in a calendar year must be determined
- (a) in accordance with section 13 or 14, using a CEMS; or
- (b) in accordance with sections 17 and 18, using a fuel-based method.
Continuous Emission Monitoring System
Unit not combusting biomass
13 Subject to section 15, the quantity of CO2 emissions resulting from combustion of fossil fuels in a unit that does not combust biomass that is measured using a CEMS must be calculated in accordance with sections 7.1 to 7.7 of the Reference Method.
Unit combusting biomass
14 (1) Subject to section 15, the quantity of CO2 emissions resulting from the combustion of fossil fuels in a unit combusting biomass in a calendar year that is measured using a CEMS must be determined in accordance with the following formula:
Eu × (Vff ⁄ VT) − Es
where- Eu is the quantity of CO2 emissions, expressed in tonnes, from the unit, “u”, during the calendar year from the combustion of fuel, as measured by the CEMS, and calculated in accordance with sections 7.1 to 7.7 of the Reference Method;
- Vff is the volume of CO2 emissions released from combustion of fossil fuel in the unit during the calendar year, expressed in standard m3 and determined in accordance with the following formula:
where
- Qi is the quantity of fossil fuel type “i” combusted in the unit during the calendar year, determined
- (a) for a gaseous fuel, in the same manner used in the determination of Vf in the formula set out in paragraph 18(1)(a) and expressed in standard m3,
- (b) for a liquid fuel, in the same manner used in the determination of Vf in the formula set out in paragraph 18(1)(b) and expressed in kL, and
- (c) for a solid fuel, in the same manner used in the determination of Mf in the formula set out in paragraph 18(1)(c) and expressed in tonnes,
- i is the ith fossil fuel type combusted in the unit during the calendar year, where “i” goes from the number 1 to n and where n is the number of fossil fuels so combusted,
- Fc,i is the fuel-specific carbon-based F-factor for each fossil fuel type “i” — being the factor set out in Appendix A of the Reference Method, or for fuels not listed, the one determined in accordance with that Appendix — corrected to be expressed in standard m3 of CO2/GJ, and
- HHVi is the higher heating value for each fossil fuel type “i” that is measured in accordance with subsection (2), or in the absence of a measured higher heating value, the default higher heating value, set out in column 2 of Schedule 2, for the fuel type, as set out in column 1;
- VT is the volume of CO2 emissions released from combustion of fuel — fossil fuel and biomass — in the unit during the calendar year determined in accordance with the following formula:
- where
- t is the tth hour, where “t” goes from the number 1 to n and where n is the total number of hours during which the unit generated electricity in the calendar year,
- CO2w,t is the average concentration of CO2 in relation to all gases in the stack emitted from the combustion of fuel in the unit during each hour “t”, during which the unit generated electricity in the calendar year — or, if applicable, a calculation made in accordance with section 7.4 of the Reference Method of that average concentration of CO2 based on a measurement of the concentration of oxygen (O2) in those gases in the stack — expressed as a percentage on a wet basis, and
- Qw,t is the average volumetric flow during that hour, measured on a wet basis by the stack gas volumetric flow monitor, expressed in standard m3; and
- Es is the quantity of CO2 emissions, expressed in tonnes, that is released from the use of sorbent to control the emission of sulphur dioxide from the unit during the calendar year, determined in accordance with the following formula:
S × R × (44⁄MMs)
where- S is the quantity of sorbent material, such as calcium carbonate (CaCO3), expressed in tonnes,
- R is the stoichiometric ratio, on a mole fraction basis, of CO2 released on usage of one mole of sorbent material, which is equal to 1 if the sorbent material is CaCO3, and
- MMs is the molecular mass of the sorbent material, which is equal to 100 if the sorbent material is CaCO3.
Higher heating value
(2) The higher heating value of a fuel is to be measured
- (a) for a gaseous fuel,
- (i) in accordance with whichever of the following standards that applies:
- (A) ASTM D1826 - 94(2017), entitled Standard Test Method for Calorific (Heating) Value of Gases in Natural Gas Range by Continuous Recording Calorimeter,
- (B) ASTM D3588 - 98(2017), entitled Standard Practice for Calculating Heat Value, Compressibility Factor, and Relative Density of Gaseous Fuels,
- (C) ASTM D4891 - 13, entitled Standard Test Method for Heating Value of Gases in Natural Gas and Flare Gases Range by Stoichiometric Combustion,
- (D) Gas Processors Association Standard 2172 - 14, entitled Calculation of Gross Heating Value, Relative Density, Compressibility and Theoretical Hydrocarbon Liquid Content for Natural Gas Mixtures for Custody Transfer, and
- (E) Gas Processors Association standard 2261 - 13, entitled Analysis for Natural Gas and Similar Gaseous Mixtures by Gas Chromatography, or
- (ii) by means of a direct measuring device that measures the higher heating value of the fuel, but if the measuring device provides only lower heating values, those lower heating values must be converted to higher heating values; and
- (i) in accordance with whichever of the following standards that applies:
- (b) for a liquid fuel that is
- (i) an oil or a liquid fuel derived from waste, in accordance with
- (A) ASTM D240 - 17, entitled Standard Test Method for Heat of Combustion of Liquid Hydrocarbon Fuels by Bomb Calorimeter, or
- (B) ASTM D4809 - 13, entitled Standard Test Method for Heat of Combustion of Liquid Hydrocarbon Fuels by Bomb Calorimeter (Precision Method), and
- (ii) any other liquid fuel type, in accordance with an applicable ASTM standard for the measurement of the higher heating value of the fuel type or, if no such ASTM standard applies, in accordance with an applicable internationally recognized method.
- (i) an oil or a liquid fuel derived from waste, in accordance with
Multiple CEMS per unit
15 (1) For the purposes of sections 13 and 14, the total quantity of CO2 emissions from a unit equipped with multiple CEMS is determined by adding together the quantity of emissions measured for each CEMS.
Units sharing common stack
(2) If a unit is located at a facility where there is one or more other units and a CEMS measures emissions from that unit and other units at a common stack rather than at the exhaust duct of that unit and of each of those other units that brings those emissions to the common stack, then the quantity of emissions attributable to that unit is determined based on the ratio of the heat input of that unit to the total of the heat input of that unit and of all of those other units sharing the common stack in accordance with the following formula:
where
- Qu,j is the quantity of fuel type “j” combusted in that unit “u” during the calendar year, determined
- (a) for a gaseous fuel, in the same manner as the one used in the determination of Vf in the formula set out in paragraph 18(1)(a) and expressed in standard m3,
- (b) for a liquid fuel, in the same manner as the one used in the determination of Vf in the formula set out in paragraph 18(1)(b) and expressed in kL, and
- (c) for a solid fuel, in the same manner as the one used in the determination of Mf in the formula set out in paragraph 18(1)(c) and expressed in tonnes;
- HHVu,j is the higher heating value for each fossil fuel type “j” that is combusted in that unit “u” that is measured in accordance with subsection 14(2), or in the absence of a measured higher heating value, the default higher heating value, set out in column 2 of Schedule 2, for the fuel type, as set out in column 1;
- j is the jth fuel type combusted during the calendar year in a unit where “j” goes from the number 1 to y and where y is the number of those fuel types;
- Qi,j the quantity of fuel type “j” combusted in each unit “i” during the calendar year, determined for a gaseous fuel, a liquid fuel and a solid fuel, respectively, in the manner set out in the description of Quj;
- HHVi,j is the higher heating value for each fossil fuel type “j” that is combusted in that unit “i” that is measured in accordance with subsection 14(2), or in the absence of a measured higher heating value, the default higher heating value, set out in column 2 of Schedule 2, for the fuel type, as set out in column 1;
- i is the ith unit, where “i” goes from the number 1 to x, and where x is the number of units that share a common stack; and
- E is the quantity of CO2 emissions, expressed in tonnes, from the combustion of all fuels in all the units that share a common stack during the calendar year, measured by a CEMS at the common stack, and calculated in accordance with sections 7.1 to 7.7 of the Reference Method.
If using a CEMS
16 (1) A responsible person who uses a CEMS must ensure compliance with the Reference Method.
Auditor’s report
(2) For each calendar year during which the responsible person used a CEMS, they must obtain a report, signed by the auditor, that contains the information required by Schedule 3 and send it to the Minister with the report referred to in section 21.
Fuel-based Method
Quantification
17 The quantity of CO2 emissions resulting from the combustion of fossil fuels in a unit in a calendar year, that is not measured using a CEMS, is determined by the formula
where
- i is the ith fossil fuel type that is combusted in the calendar year in a unit, where “i” goes from the number 1 to n and where n is the number of those fossil fuel types;
- Ei is the quantity of CO2 emissions that is attributable to the combustion of fossil fuels of type “i” in the unit in the calendar year, expressed in tonnes, as determined for that fuel type in accordance with section 18; and
- Es is the quantity of CO2 emissions that is released from the sorbent used to control the emission of sulphur dioxide from the unit in the calendar year, expressed in tonnes, as determined by the formula
S × R × (44⁄MMs)
where
- S is the quantity of sorbent material, such as calcium carbonate (CaCO3), expressed in tonnes,
- R is the stoichiometric ratio, on a mole fraction basis, of CO2 released on usage of 1 mole of sorbent material, which is equal to 1 if the sorbent material is CaCO3, and
- MMs is the molecular mass of the sorbent material, which is equal to 100 if the sorbent material is CaCO3.
Measured carbon content
18 (1) The quantity of CO2 emissions, that is attributable to the combustion of a fossil fuel in a unit in a calendar year is determined by one of the following formulas, whichever applies:
- (a) for a gaseous fuel,
Vf × CCA × (MMA⁄MVcf) × 3.664 × 0.001
where
- Vf is the volume of the fuel combusted in the calendar year, determined using flow meters, expressed in standard m3,
- CCA is the weighted average of the carbon content of the fuel, determined in accordance with subsection (2), expressed in kg of carbon per kg of the fuel,
- MMA is the average molecular mass of the fuel, determined based on fuel samples taken in accordance with section 19, expressed in kg per kg-mole of the fuel, and
- MVcf is the molar volume conversion factor of 23.645 standard m3 per kg-mole of the fuel at standard conditions;
- (b) for a liquid fuel,
Vf × CCA × 3.664
where
- Vf is the volume of the fuel combusted in the calendar year, determined using flow meters, expressed in kL , and
- CCA is the weighted average of the carbon content of the fuel, determined in accordance with subsection (2), at the same temperature as that used in the determination of Vf, expressed in tonnes of carbon per kL of the fuel; and
- (c) for a solid fuel,
Mf × CCA × 3.664
where
- Mf is the mass of the fuel combusted in the calendar year, determined, as the case may be, on a wet or dry basis using a measuring device, expressed in tonnes, and
- CCA is the weighted average of the carbon content of the fuel, determined in accordance with subsection (2), on the same wet or dry basis as that used in the determination of Mf, expressed in kg of carbon per kg of the fuel.
Weighted average
(2) The weighted average “CCA” referred to in paragraphs (1)(a) to (c) is determined by the formula
where
- CCi is the carbon content of each sample or composite sample, as the case may be, of the fuel for the ith sampling period, expressed for gaseous fuels, liquid fuels and solid fuels, respectively, in the same unit of measure as that set out in CCA, as provided by the supplier of the fuel to the responsible person or, if not so provided, as determined by the responsible person in the following manner:
- (a) for a gaseous fuel,
- (i) in accordance with whichever of the following standards for the measurement of the carbon content of the fuel that applies:
- (A) ASTM D1945-14, entitled Standard Test Method for Analysis of Natural Gas by Gas Chromatography,
- (B) ASTM UOP539-12, entitled Refinery Gas Analysis by Gas Chromatography,
- (C) ASTM D7833-14, entitled Standard Test Method for Determination of Hydrocarbons and Non-Hydrocarbon Gases in Gaseous Mixtures by Gas Chromatography, and
- (D) API Technical Report 2572, 1st edition, published in May 2013 and entitled Carbon Content, Sampling, and Calculation, or
- (ii) by means of a direct measuring device that measures the carbon content of the fuel,
- (i) in accordance with whichever of the following standards for the measurement of the carbon content of the fuel that applies:
- (b) for a liquid fuel, in accordance with whichever of the following standards or methods for the measurement of the carbon content of the fuel that applies:
- (i) API Technical Report 2572, 1st edition, published in May 2013 and entitled Carbon Content, Sampling, and Calculation,
- (ii) ASTM D5291-16, entitled Standard Test Methods for Instrumental Determination of Carbon, Hydrogen, and Nitrogen in Petroleum Products and Lubricants,
- (iii) the ASTM standard that applies to the type of fuel, or
- (iv) if no ASTM standard applies, an applicable internationally recognized method, and
- (c) for a solid fuel, on the same wet or dry basis as that used in the determination of CCA, in accordance with,
- (i) for a solid fuel derived from waste, ASTM E777-08, entitled Standard Test Method for Carbon and Hydrogen in the Analysis Sample of Refuse-Derived Fuel, and
- (ii) for any other solid fuel, the following standard or method for the measurement of the carbon content of the fuel:
- (A) the ASTM standard that applies to the type of fuel, and
- (B) if no ASTM standard applies, an applicable internationally recognized method;
- i is the ith sampling period that is referred to in section 19, where “i” goes from the number 1 to n and where n is the number of those sampling periods; and
- Qi is the volume or mass, as the case may be, of the fuel combusted during the ith sampling period, expressed
- (a) in standard m3, for a gaseous fuel,
- (b) in kL, for a liquid fuel, and
- (c) in tonnes, for a solid fuel, on the same wet or dry basis as that used in the determination of CCA.
Sampling and Missing Data
Sampling
19 (1) Subject to subsection (2), the determination of the value of the elements related to carbon content referred to in section 18 must be based on fuel samples taken in accordance with this section.
Carbon content provided by the supplier
(2) If the supplier of the fuel has provided the carbon content of the fuel, the responsible person can obtain from that supplier the carbon content of the fuel for the specified sampling period and at the specified minimum sampling frequency rather than taking samples in accordance with subsection (3).
Frequency
(3) Each fuel sample must be taken at a time and location in the fuel handling system of the facility that provides the following representative samples of the fuel combusted at the applicable minimum frequency:
- (a) for natural gas, during each sampling period consisting of each year that the unit generates electricity or produces useful thermal energy, two samples taken that year, with each of those samples being taken at least four months after any previous sample has been taken, in accordance with whichever of the following standard that applies:
- (i) ASTM D4057-12, entitled Standard Practice for Manual Sampling of Petroleum and Petroleum Products,
- (ii) ASTM D4177-16e1, entitled Standard Practice for Automatic Sampling of Petroleum and Petroleum Products,
- (iii) ASTM D5287-08(2015), entitled Standard Practice for Automatic Sampling of Gaseous Fuels, and
- (iv) ASTM F307-13, entitled Standard Practice for Sampling Pressurized Gas for Gas Analysis;
- (b) for refinery gas, during each sampling period consisting of each day that the unit generates electricity or produces useful thermal energy, one sample per day that is taken at least six hours after any previous sample has been taken, in accordance with any applicable standard referred to in paragraph (a);
- (c) for a type of liquid fuel or of a gaseous fuel other than refinery gas and natural gas, during each sampling period consisting of each month that the unit generates electricity or produces useful thermal energy, one sample per month that is taken at least two weeks after any previous sample has been taken, in accordance with any of the standards referred to in paragraph (a); and
- (d) for a solid fuel, one composite sample per month that consists of sub-samples, each having the same mass, that are taken from the fuel that is fed for combustion during each week that begins in that month and during which the unit generates electricity or produces useful thermal energy, and after all fuel treatment operations have been carried out but before any mixing of the fuel from which the sub-sample is taken with other fuels, and at least 72 hours after any previous sub-sample has been taken.
Additional samples
(4) For greater certainty, the responsible person who, for the purposes of these Regulations, takes more samples than the minimum required under subsection (3) must make the determination referred to in subsection (1) based on each sample taken — and in the case of composite samples, each sub-sample taken — including those additional samples.
Significantly modified boiler units
(5) In the case of a boiler unit referred to in subsection 3(4), one fuel sample is required for the initial performance test and each subsequent performance test and it must be taken in accordance with one of the applicable standards set out in subparagraphs (3)(a)(i) to (iv).
Missing data
20 (1) Except in the case of an initial performance test or any subsequent performance test referred to in section 5, if, for any reason beyond the responsible person’s control, the emission intensity referred to in subsection 4(1) or 4(2) cannot be determined in accordance with a formula set out in any of sections 11, 17 and 18 because data required to determine the value of an element of that formula is missing for a given period in a calendar year, replacement data for that given period must be used to determine that value.
Replacement data — CEMS
(2) If a CEMS is used to determine the value of an element of a formula set out in section 17 but data is missing for a given period, the replacement data must be obtained in accordance with Section 3.5.2 of the Reference Method.
Replacement data — fuel-based methods
(3) If a fuel-based method is used to determine the value of any element — related to the carbon content or molecular mass of a fuel — of a formula set out in section 17 or 18 but data is missing for a given period, the replacement data is to be the average of the available data for that element, using the fuel-based method in question, during the equivalent period prior to and, if the data is available, subsequent to that given period. However, if no data is available for that element for the equivalent period prior to that given period, the replacement data to be used is the value determined for that element, using the fuel-based method in question, during the equivalent period subsequent to the given period.
Replacement data — multiple periods
(4) Replacement data may be used in relation to a maximum of 28 days in a calendar year.
Reporting, Sending, Recording and Retaining Information
Annual reports
21 (1) Subject to subsection (2), a responsible person for a unit must send one of the following reports, to the Minister on or before the June 1 that follows the calendar year that is the subject of the report:
- (a) a report containing the information set out in Schedule 1 in respect of each calendar year in which the unit meets the conditions set out in subsection 3(1) or (2), as the case may be;
- (b) a short report containing the information referred to in sections 1 and 2, except paragraph 2(h), of Schedule 1 in respect of each calendar year in which the unit no longer meets one of the conditions referred to in subsection 3(1) or (2), as the case may be.
Significantly modified boiler units
(2) A responsible person for a boiler unit referred to in subsection 3(4) must send the reports referred to in subsection (1), beginning in the year in which it must meet the emission limit referred to in subsection 4(2).
Permanent cessation of electricity generation
(3) If a unit permanently ceases to generate electricity in a calendar year, a responsible person for the unit must so notify the Minister in writing not later than 60 days after the day on which the unit ceases generating electricity. A report is not necessary in respect of the calendar years following the calendar year in which the unit ceases generating electricity.
Registration number
(4) On receipt of a first report in respect of a unit referred to in paragraph (1)(a), the Minister must assign a registration number to the unit and inform the responsible person of that number.
Change of information
(5) If there is a change to the information referred to in section 1 of Schedule 1 that was provided in the most recent report, the responsible person must notify the Minister of the change in writing not later than 30 days after the day on which the change is made.
Performance test reporting
22 (1) A responsible person for a boiler unit referred to in subsection 3(4) must send, to the Minister, a report containing the information referred to in Schedule 4 in relation to the performance test identified in section 5 no later than 60 days after the performance test was conducted.
Performance test verifier’s report — initial test
(2) In the case of a boiler unit referred to in subsection 3(4), the responsible person must obtain a report, signed by the performance test verifier, on the initial performance test, that contains the information referred to in Schedule 5 and send it to the Minister with their report referred to in subsection (1).
Electronic report, notice and application
23 (1) A report or notice that is required, or an application that is made, under these Regulations must be sent electronically in the form specified by the Minister and must bear the electronic signature of an authorized official of the responsible person.
Paper report or notice
(2) If the Minister has not specified an electronic form or if the person is unable to send the report, notice or application electronically in accordance with subsection (1) because of circumstances beyond the person’s control, the report, notice or application must be sent on paper, in the form specified by the Minister, if applicable, and be signed by an authorized official of the responsible person.
Maintain copy
24 (1) A responsible person for a unit must make a record containing the following documents and information:
- (a) any notice referred to in subsection 21(5) that was sent to the Minister along with supporting documents;
- (b) any application referred to in subsection 7(3) or 8(2), whichever applies, along with supporting documents;
- (c) every measurement and calculation used to determine the value of an element of a formula used for the purposes of section 4 and, if applicable, section 5, along with an indication of the standards that were used to determine the value of the elements used in those formula and any necessary supporting documents;
- (d) an indication of the standards or methods referred to in the description of CCi in subsection 18(2) that were used to determine the value of CCA in paragraph 18(1)(a), (b) or (c), as the case may be, or, for a sample of gaseous fuel, a statement that indicates that a direct measuring device was used to determine that value;
- (e) information demonstrating that any meter referred to in section 11 complies with the requirements of the Electricity and Gas Inspection Act and the Electricity and Gas Inspection Regulations, including a certificate referred to in section 14 of that Act;
- (f) information demonstrating that the installation, maintenance and calibration of the measuring devices referred to in subsection 9(1) were done in accordance with that subsection and subsection 9(2) and that the measuring devices used comply with subsection 9(3);
- (g) supporting documents that confirm the CEMS certification under section 10;
- (h) any document, record or information referred to in section 8 of the Reference Method, for each calendar year during which a responsible person used a CEMS;
- (i) the results of the analysis of every sample taken in accordance with section 19, as well as the date that each sample was taken and an indication of the standards that were used to take representative samples of the fuel;
- (j) information demonstrating the unit capacity set out in the annual report;
- (k) in the case of a unit that has a combustion engine that is temporarily installed for a period of 90 days or less as part of repair or maintenance,
- (i) evidence that the combustion engine underwent repairs or maintenance and that a replacement combustion engine was temporarily connected to the unit for the duration of the repairs or maintenance,
- (ii) the number of days that a replacement combustion engine was connected to the unit, and
- (iii) the number of days that the repairs or maintenance lasted;
- (l) information demonstrating each combustion engine capacity set out in the annual report, the date on which each combustion engine was installed and, in the case of a combustion engine with a capacity of 150 MW or less, a statement that, if applicable, the combustion engine was installed to replace an engine, with a capacity of 150 MW or less, as part of repair or maintenance; and
- (m) any report referred to in section 22, along with supporting documents.
30 days
(2) The record referred to in subsection (1) must be made as soon as feasible but not later than 30 days after the day on which the information and documents to be included in it become available.
Retention of records and reports
25 A responsible person who is required under these Regulations to make a record or send a report or notice must keep the record or a copy of the report or notice, along with the supporting documents, at their principal place of business in Canada for at least seven years after they make the record or send the report or notice.
Coming into Force
Registration
26 (1) Subject to subsection (2), these Regulations come into force on January 1, 2019.
Deferred application
(2) These Regulations become applicable to combustion engine units on January 1, 2021.
SCHEDULE 1
(Subsection 7(3), paragraphs 21(1)(a) and (b) and subsection 21(5))
Annual Report — Information Required
1 The following information respecting the responsible person:
- (a) an indication of whether they are the owner or operator of the unit and their name and civic address;
- (b) the name, title, civic and postal addresses, telephone number and, if any, email address and fax number of their authorized official; and
- (c) the name, title, civic and postal addresses, telephone number and, if any, email address and fax number of a contact person, if different from the authorized official.
2 The following information respecting the unit:
- (a) for each responsible person for the unit, other than the responsible person mentioned in paragraph 1(a), if any,
- (i) their name, title and civic address, and
- (ii) an indication of whether they are the owner or operator;
- (b) the unit’s name and civic address, if any;
- (c) the unit’s registration number, if any;
- (d) the name of the facility where the unit is located;
- (e) the facility’s National Pollutant Release Inventory identification number assigned by the Minister for the purposes of section 48 of the Act, if any;
- (f) the unit’s registration number, if any, assigned by the Minister under subsection 4(2) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations;
- (g) whether the unit is a boiler unit or a combustion engine unit;
- (h) a process flow diagram that shows
- (i) the unit’s major equipment that operates together to generate electricity and, if applicable, produce thermal energy, including boilers, combustion engines, duct burners and other combustion devices, heat recovery systems, steam turbines, generators and emission control devices,
- (ii) the unit boundaries used to identify the unit,
- (iii) the electric flows crossing the unit boundaries, and
- (iv) the heat streams crossing the unit boundaries and an indication of their average temperature, pressure and hourly mass flow rate;
- (i) the unit’s capacity;
- (j) for each of the unit’s combustion engines, the engine capacity and the date on which each combustion engine was installed, and in the case of combustion engine with a capacity of 150 MW or less, a statement that, if applicable, the combustion engine was installed to replace an engine, with a capacity of 150 MW or less, as part of repair or maintenance;
- (k) the unit’s potential electrical output for the calendar year, expressed in GWh;
- (l) as the case may be,
- (i) in the case of a combustion engine unit, the percentage of the unit’s potential electrical output that is sold or distributed to the electric grid for the calendar year, and
- (ii) in the case of a boiler unit, the quantity of electricity that is sold or distributed to the electric grid for the calendar year;
- (m) the percentage of the unit’s heat input that comes from natural gas, on average for the calendar year; and
- (n) in the case of a boiler unit, the value of the unit’s heat to electricity ratio.
3 The following information respecting the emission intensity referred to in subsection 4(1) or (2) of these Regulations resulting from the combustion of fossil fuel in the unit during the calendar year:
- (a) the emission intensity for the unit — that is, the ratio of the quantity of CO2 emissions referred to in paragraph (c) to the quantity of energy referred to in subparagraph (b)(i) — expressed in tonnes per GWh;
- (b) in respect of the quantity of energy produced by the unit,
- (i) that quantity determined in accordance with section 11 of these Regulations, expressed in GWh,
- (ii) the value determined for G and Hpnet in the formula set out in subsection 11(1) of these Regulations, expressed in GWh, and
- (iii) the value determined for Gce, Gs and Gext in the formula set out in subsection 11(2) of these Regulations, expressed in GWh;
- (c) in respect of the quantity of CO2 emissions from the combustion of fuels in the unit,
- (i) if paragraph 12(a) of these Regulations applies, the result of the calculation made in accordance with section 13 or 14 and, if applicable, section 15 of these Regulations, expressed in tonnes, and
- (ii) if paragraph 12(b) of these Regulations applies, the result of the calculation made in accordance with sections 17 and 18 of these Regulations, expressed in tonnes; and
- (d) for each type of fuel combusted,
- (i) the type and, if that type is biomass, an explanation of why that type is biomass as defined in subsection 2(1) of these Regulations, and
- (ii) the quantity of fuel combusted.
4 The following information:
- (a) in the case of a unit that is granted an exemption under paragraph 7(4)(a) of these Regulations, the duration of the emergency circumstance, such as the date on which the circumstance arose and the date on which it ceased; and
- (b) in the case of a unit referred to in subsection 4(4) of these Regulations that is temporarily connected to one or more replacement combustion engines,
- (i) the duration of the repairs or maintenance, such as the day in the calendar year on which the repairs or maintenance began and the day in the calendar year on which they ended, and
- (ii) the reason why the replacement combustion engine was used.
5 A copy of the auditor’s report referred to in subsection 16(2) of these Regulations.
6 The following information respecting the replacement data referred to in section 20 of these Regulations that were used for a given period during the calendar year, if applicable:
- (a) the reason why data required to determine the value of an element of a formula referred to in section 11, 17 or 18 of these Regulations was not obtained and an explanation why that reason was beyond the responsible person’s control;
- (b) the element of the formula for which data was not obtained and the date of the day on which the data were not obtained and, if that data were not obtained for a period of several days, the dates of the days on which the period begins and ends; and
- (c) the value determined for the element referred to in paragraph (b) using replacement data, along with details of that determination, including
- (i) the data used to make that determination for each period of one or more days,
- (ii) the method used to obtain that data, and
- (iii) in the case of a determination of the value of an element referred to in subsection 20(3) of these Regulations, a justification for the given period being used as the basis of that determination.
SCHEDULE 2
(Subsections 14(1) and 15(2))
Item |
Column 1 Fuel type |
Column 2 Default higher heating value (GJ/kL) table 1 note 2 |
|||||
---|---|---|---|---|---|---|---|
Table 1 Notes
|
|||||||
1 |
Distillate fuel oil No.1 |
38.78 |
|||||
2 |
Distillate fuel oil No. 2 |
38.50 |
|||||
3 |
Distillate fuel oil No. 4 |
40.73 |
|||||
4 |
Kerosene |
37.68 |
|||||
5 |
Liquefied petroleum gases (LPG) |
25.66 |
|||||
6 |
Propane (pure, not mixtures of LPGs) table 1 note 1 |
25.31 |
|||||
7 |
Propylene |
25.39 |
|||||
8 |
Ethane |
17.22 |
|||||
9 |
Ethylene |
27.90 |
|||||
10 |
Isobutane |
27.06 |
|||||
11 |
Isobutylene |
28.73 |
|||||
12 |
Butane |
28.44 |
|||||
13 |
Butylene |
28.73 |
|||||
14 |
Natural gasoline |
30.69 |
|||||
15 |
Motor gasoline |
34.87 |
|||||
16 |
Aviation gasoline |
33.52 |
|||||
17 |
Kerosene-type aviation |
37.66 |
|||||
18 |
Pipeline quality natural gas |
0.03793table 1 note 2 |
SCHEDULE 3
(Subsection 16(2))
CEMS Auditor’s Report — Information Required
1 The name, civic address and telephone number of the responsible person.
2 The name, civic address, telephone number and qualifications of the auditor and, if any, the auditor’s email address and fax number.
3 The procedures followed by the auditor to assess whether
- (a) the responsible person’s use of the CEMS complied with the Quality Assurance/Quality Control manual referred to in section 6.1 of the Reference Method; and
- (b) the responsible person complied with the Reference Method and the CEMS met the specifications set out in the Reference Method, in particular, in its sections 3 and 4.
4 A statement of the auditor’s opinion as to whether
- (a) the responsible person’s use of the CEMS complied with the Quality Assurance/Quality Control manual referred to in Section 6.1 of the Reference Method; and
- (b) the responsible person complied with the Reference Method and the CEMS met the specifications set out in the Reference Method, in particular, in its sections 3 and 4.
5 A statement of the auditor’s opinion as to whether the responsible person has ensured that the Quality Assurance/Quality Control manual has been updated in accordance with sections 6.1 and 6.5.2 of the Reference Method.
SCHEDULE 4
(Subsection 22(1))
Performance Test Report — Information Required
1 The following information respecting the responsible person:
- (a) an indication of whether they are the owner or operator of the unit and their name and civic address;
- (b) the name, title, civic and postal addresses, telephone number and, if any, email address and fax number of their authorized official; and
- (c) the name, title, civic and postal addresses, telephone number and, if any, email address and fax number of a contact person, if different from the authorized official.
2 The following information respecting the unit:
- (a) for each responsible person for the unit, other than the responsible person mentioned in paragraph 1(a), if any,
- (i) their name, title and civic address, and
- (ii) an indication of whether they are the owner or operator;
- (b) the unit’s name and civic address, if any;
- (c) the unit’s registration number, if any;
- (d) the name of the facility where the unit is located;
- (e) the facility’s National Pollutant Release Inventory identification number assigned by the Minister for the purposes of section 48 of the Act, if any;
- (f) the unit’s registration number assigned by the Minister under subsection 4(2) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations; and
- (g) the unit’s capacity.
3 The following information respecting the emission intensity referred to in subsection 4(2) of these Regulations resulting from the combustion of fuel in the unit during the performance test period:
- (a) the emission intensity for the unit — that is, the ratio of the quantity of CO2 emissions referred to in paragraph (c) to the quantity of energy referred to in paragraph (b) — expressed in tonnes per GWh;
- (b) in respect of the quantity of electricity generated by the unit, the value determined for G;
- (c) in respect of the quantity of CO2 emissions from the combustion of fuel in the unit,
- (i) if paragraph 12(a) of these Regulations applies, the result of the calculation made in accordance with section 13 or 14 and, if applicable, section 15 of these Regulations, expressed in tonnes, or
- (ii) if paragraph 12(b) of these Regulations applies, the result of the calculation made in accordance with sections 17 and 18 of these Regulations, expressed in tonnes; and
- (d) in respect of each type of fuel combusted, the quantity combusted.
4 The date that the test was performed.
SCHEDULE 5
(Subsection 22(2))
Initial Performance Test Verifier’s Report — Information Required
1 The name, civic address and telephone number of the responsible person.
2 The name, civic address, telephone number and qualifications of the performance test verifier and, if any, the performance test verifier’s email address and fax number.
3 The procedures followed by the performance test verifier to assess whether the performance test result was obtained in accordance with section 5 of these Regulations.
4 A statement of the performance test verifier’s opinion as to whether the performance test result was obtained in accordance with section 5 of these Regulations.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the regulations.)
Issues
Significant investments in the electricity sector are expected as it phases out the use of coal to generate electricity (coal-fired electricity generation) in Canada. As there are no federal regulations controlling greenhouse gas (GHG) emissions from natural gas-fired electricity generation in Canada, clarity on the federal regulatory approach to control these emissions is needed to reduce uncertainty, help create a more stable investment climate and incentivize investment in lower-emitting forms of electricity generation in Canada. The Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity (the Regulations) set performance standards for new and significantly modified natural gas-fired electricity units, providing regulatory certainty on the level of such standards.
Background
The Government of Canada (the Government) is committed to reducing GHG emissions to mitigate the impact of climate change. In 2016, Canada ratified the Paris Agreement and committed to a 30% reduction in overall GHG emissions below 2005 levels by 2030. In the same year, First Ministers from federal, provincial (except Saskatchewan), and territorial governments released the Pan-Canadian Framework on Clean Growth and Climate Change, which includes a commitment to expand clean electricity sources, supported by infrastructure investments and regulations for coal and natural gas-fired electricity generation. footnote 1 The 2017 federal budget committed $21.9 billion over 11 years in green infrastructure. Natural gas-fired electricity generation capacity will be necessary to back up renewable sources of electricity generation coming online in the future in Canada, including those accessed through the funds committed in the 2017 federal budget. On February 17, 2018, the Department of the Environment (the Department) published the proposed Regulations Amending the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations and the proposed Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity in the Canada Gazette, Part I.
The two regulations were developed in parallel to provide regulatory certainty about the federal approach to controlling GHG emissions from electricity generation in Canada footnote 2 and to ensure that any new and significantly modified natural gas-fired electricity units built to replace coal-fired electricity units meet emission performance standards.
Electricity generation GHG emissions
In 2015, Canada’s GHG emissions from the electricity sector were about 79 megatonnes (Mt) footnote 3 of carbon dioxide equivalent (CO2e) footnote 4 and about 12 Mt CO2e of those came from natural gas-fired electricity generation. It is estimated that by 2035, in a business-as-usual scenario, while Canada’s emissions from the electricity sector are expected to drop to 34 Mt CO2e, emissions from natural gas-fired electricity generation would rise to about 22 Mt CO2e. The estimated 56% decrease in overall GHG emissions is due in large part to the expected phase-out of the use of coal to generate electricity in Canada. The projected rise in GHG emissions from natural gas-fired electricity generation is a result of replacement generation coming on line as coal-fired electricity generation is phased out.
Summary of natural gas-fired electricity generation technologies
Utility-scale, natural gas-fired generation technologies generally fall into one of the following types: a combustion engine (e.g. gas turbine or reciprocating engine), or a boiler. This includes boilers that were previously coal-fired and are converted to burn natural gas (coal-to-gas conversion). An overview of the technologies used to generate electricity using natural gas in Canada is presented below.
1. Combustion engines
There are two different types of combustion engines that may burn natural gas to generate electricity:
- (a) Gas turbine engines
- These are internal combustion engines that operate with rotary, rather than reciprocating motion. These units make up the large majority of power generation from natural gas. A gas turbine can be used to generate electricity either alone (single-cycle configuration) or in combination with a steam turbine (combined-cycle configuration). Combined-cycle systems are significantly more energy and emission efficient than single-cycle units; however, single-cycle units may be required in certain operational conditions such as quick- ramping backup generation for renewables.
- Under current technology assumptions, the number of gas turbines deployed in Canada is expected to grow in the near future as it is generally agreed that this technology is currently the most cost-effective and reliable option to replace coal-fired electricity generation capacity in Canada.
- (b) Reciprocating engines
- In these engines, fuel combusts in a cylinder, driving a piston connected to a crankshaft. The crankshaft transforms the linear motion of the piston into the rotary motion of the crankshaft. For electricity generation applications, reciprocating engines are connected to generators to produce power.
2. Boilers
In these units, fuel is combusted in a boiler to convert water into steam. The steam spins a steam turbine that drives a generator to produce electricity. Boiler units can burn a variety of fuels, including but not limited to coal, petroleum coke, heavy fuel oil, natural gas, and biomass, alone or in combination.
The number of natural-gas fired boilers has been in decline, mainly due to improvements in the efficiency and flexibility of gas turbine technology.
3. Coal-to-gas conversion
Conversion to combust natural gas could be as simple as installing a gas nozzle on an existing coal burner and tying into the existing natural gas supply system, or the conversion could be more complex, requiring the installation of completely new burners, boiler modifications, boiler auxiliary equipment modifications or replacements, and entirely new off-site and on-site natural gas supply systems. The degree of the required modifications would depend on the unit being considered for modification.
In 2017, TransAlta announced that its Board of Directors approved six coal-to-gas conversions footnote 5 in Alberta. The six coal-to-gas conversions are expected to
- — occur between 2020 and 2022, 6 to 9 years before coal-fired electricity units will be required to meet the performance standard under federal and provincial coal-fired electricity regulations;
- — add between 5 to 10 years of economic life to each coal-to-gas converted unit after the year in which they would have been required to meet the performance standard, if not converted to run on natural gas, under federal and provincial coal-fired electricity regulations;
- — provide reliable back-up capacity; and
- — help the sector with its overall strategy to transition to non-emitting sources of electricity generation in Alberta. footnote 6
Objectives
The objective of the Regulations is to limit CO2 emissions from natural gas-fired electricity generation by ensuring new and significantly modified natural gas-fired electricity units are subject to emission performance standards. In doing so, the Regulations will provide regulatory certainty on the level of such standards. This is expected to facilitate the planning and investment decision-making processes associated with the phase out of the use of coal-fired electricity generation and the construction of new natural gas-fired electricity generation capacity in Canada.
Description
The Regulations will impose performance standards (CO2 emission intensity-based limits) on new and significantly modified natural gas-fired electricity generating units. footnote 7
New units include
- — combustion engine units (gas turbines and reciprocating engines) that begin producing electricity on or after January 1, 2021; and
- — natural gas boilers that begin producing electricity on or after January 1, 2019.
Significantly modified units include
- — existing combustion engine units (gas turbines and reciprocating engines) burning natural gas that begin producing electricity before January 1, 2021, that are retrofitted to increase capacity, or moved to a new facility;
- — existing boiler units burning natural gas that begin producing electricity before January 1, 2019, that moved to a new facility; and
- — boiler units that previously burned coal, registered under subsection 4(1) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations, and are converted to burn natural gas to generate electricity (coal-to-gas conversion).
Below is a summary of the performance standards and other requirements under the Regulations.
1. Performance standards for combustion engine units (gas turbines and reciprocating engines) — new, significantly modified or moved to a new facility
For combustion engine units that are new, significantly modified or moved to a new facility, the performance standard that applies is based on the size of the individual combustion engines of the unit. For units equipped with one or more combustion engines with a capacity larger than 150 megawatts (MW) footnote 8 (> 150 MW), the performance standard will apply on an annual average basis and be 420 tonnes (t) of CO2 for each gigawatt hour (GWh) of energy produced. The performance standard for combustion engine units equipped with engines with a capacity of 150 MW or less (≤ 150 MW) will also apply on an annual average basis and be 550 t of CO2/GWh of energy produced.
The Regulations will apply to combustion engine units (gas turbines and reciprocating engines) that meet all of the following conditions:
- — the unit starts generating electricity on or after January 1, 2021 (the coming into force date for these units), footnote 9or the unit generated electricity before January 1, 2021, and is moved to a new facility on or after January 1, 2021, or more than 50% of its combustion engine capacity is installed on or after January 1, 2021;
- — the unit has a capacity of 25 MW or more;
- — more than 30% of the heat input footnote 10 of the unit comes from the combustion of natural gas, and
- — 33% or more of the potential electrical output of the unit is sold or distributed to the grid. footnote 11
2. Performance standards for natural gas boiler units — new or moved to a new facility
The performance standard for natural gas boiler units that are new or moved to a new facility will apply on an annual average basis and be 420 t of CO2/GWh of energy produced.
The Regulations will apply to natural gas boiler units that meet the following conditions:
- — the unit starts generating electricity on or after January 1, 2019 (the coming into force date for these units), footnote 12or the unit generated electricity before January 1, 2019, and is moved to a new facility on or after January 1, 2019;
- — the unit has a capacity of 25 MW or more;
- — more than 30% of the heat input of the unit comes from the combustion of natural gas;
- — in the case of a cogeneration boiler unit, it has a heat-to-electricity ratio less than 0.9; footnote 13 and
- — electricity generated by the unit is sold or distributed to the grid.
3. Performance standards for coal boilers significantly modified to burn natural gas to generate electricity (coal-to-gas conversion)
Significantly modified coal boiler units that cease using coal as a fuel footnote 14 and continue operating using natural gas to generate electricity will be allowed to operate without meeting a performance standard for a limited period of time, after which they must meet a performance standard. The performance standard for coal-to-gas conversions will be deferred for a prescribed period (either 0, 5, 8 or 10 years after the unit’s end of useful life footnote 15) determined by an initial coal-to-gas converted boiler performance test.
The initial performance test and the emission intensity determined from this test must be reported under the Regulations, generally within 12 months after the coal-to-gas conversion is completed. The emission intensity during the initial performance test will establish how many years the coal-to-gas converted unit could operate without meeting a performance standard of 420 t of CO2/GWh, where units that are more efficient will be allowed to operate longer without meeting the standard.
For coal-to-gas converted boiler units, the performance standard of 420 t of CO2/GWh of energy produced would not apply for a given number of years as follows:
- i. zero years after the unit’s end of useful life, if the initial performance test results in a CO2 emissions intensity that is greater than 600 t of CO2/GWh;
- ii. five years after the unit’s end of useful life, if the initial performance test results in a CO2 emissions intensity that is greater than 550 t of CO2/GWh and less than or equal to 600 t of CO2/GWh;
- iii. eight years after the unit’s end of useful life, if the initial performance test results in a CO2 emissions intensity that is greater than 480 t of CO2/GWh and less than or equal to 550 t of CO2/GWh; or
- iv. ten years after the unit’s end of useful life, if the initial performance test results in a CO2 emissions intensity that is less than or equal to 480 t of CO2/GWh.
Subsequent annual performance tests must be conducted to determine the CO2 emission intensity of a converted unit. The CO2 emission intensity of the converted unit during these tests must show less than a 2% increase in the emission intensity from the previous performance test to be in compliance.
The Regulations will apply to converted coal-to-gas boiler units if they meet the conditions below:
- — the unit has been registered under subsection 4(1) of the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations;
- — the unit ceased combusting coal and continues to generate electricity using natural gas as a fuel on or after January 1, 2019, the coming into force date for these units;
- — the unit has a capacity of 25 MW or more;
- — more than 30% of the heat input footnote 16 of the unit comes from the combustion of natural gas;
- — in the case of a cogeneration boiler unit, it has a heat-to-electricity ratio of 0.9 or less; footnote 17 and
- — electricity generated by the unit is sold or distributed to the grid.
Reporting obligations
Owners or operators will be required to submit annual reports for units to which the Regulations apply. In the case of units that have met the application criteria in previous years, but cease to meet any of the application criteria in a given year, only a shortened report is required for this year. Owners or operators of converted coal-to-gas boiler units will be required to submit their annual performance test reports for the period during which the performance emission standard does not apply to that unit. Once the period expires, and the unit is subject to the performance standard, the owner or operator will be required to submit full annual reports for that unit to comply with the Regulations. The Regulations provide two methods to quantify CO2 emissions: Continuous Emission Monitoring System (CEMS) footnote 18 and a fuel-based method. footnote 19
Emergency circumstances
A provision is included in the Regulations to ensure grid reliability during emergency circumstances. If a unit needs to operate to mitigate the consequences of an emergency disruption or in the event of a significant risk of disruption to the electricity supply, such a unit could apply for a temporary exemption from the performance standard.
Regulations Designating Regulatory Provisions for the Purposes of Enforcement (Canadian Environmental Protection Act, 1999)
The Regulations Designating Regulatory Provisions for the Purposes of Enforcement (Canadian Environmental Protection Act, 1999) will be amended to list subsections 4(1) and 4(2) of the Regulations and make the contravention of these provisions punishable by appropriate penalties.
Application |
Rationale |
---|---|
The Regulations will not apply to natural gas-fired electricity combustion engine units that are in use in Canada before January 1, 2021, with a few exemptions. For example, an existing combustion engine unit generating electricity that was moved to another facility on or after January 1, 2021, would be covered. footnote 20 |
Avoids costs associated with retrofitting existing units to meet performance standards. However, based on analysis of seven large and three small units in use in Canada, GHG emissions from these units meet or out-perform the requirements set in the Regulations. |
The Regulations will not apply to natural gas-fired electricity combustion engine units that start producing electricity on or after January 1, 2021, and that sell or distribute less than 33% of their potential electrical output to the grid. |
Avoids costs associated with units that are not expected to be a major source of GHG emissions in Canada, while providing flexibility for operators to meet demands during peak hours. |
Emission performance standards |
Rationale |
---|---|
The Regulations will align emission performance standards for new and significantly modified natural gas-fired combustion engine units — expected to sell or distribute 33% or more of their potential electrical output to the grid — with those of available efficient technologies. |
Historical annual average emission intensity (t of CO2/GWh) data on existing natural gas-fired electricity generation units, using efficient technologies, shows that the emission performance standards can be met by new and significantly modified combustion engines. |
The Regulations will require significantly modified boilers converted to burn natural gas to generate electricity to meet a performance standard after a prescribed period. |
Converted units are expected to meet this requirement21 as the emission performance test parameters were based on information provided by operators based on the current efficiency of affected coal boilers. |
“One-for-One” Rule
The Regulations are expected to result in a minor increase in administrative burden; therefore, the Regulations are considered an “IN” under the “One-for-One” Rule. Following the Treasury Board’s standard costing model, and using a 7% discount rate, the expected annualized administrative cost to all business subject to the Regulations is approximately $10,752 (in 2012 Canadian dollars) and $758 per business. These new costs will require equal and offsetting administrative cost reduction to existing regulations, and as these are new Regulations, the Department will also be required to repeal at least one existing regulation within two years. footnote 21
One-time (upfront) costs
- The assumed wage rate (in 2012 Canadian dollars) for a chemical engineer or an employee with training in natural or applied science is $33/hour, for administrative support staff, $23/hour, and for senior managers, $48/hour. footnote 22
- At each facility, it is assumed that a chemical engineer or an employee with training in natural or applied science will spend four hours to become familiar with the administrative requirements of the Regulations in 2018, while senior management will spend one hour to do it.
- At each facility, it is assumed that a chemical engineer or an employee with training in natural or applied science would require 0.5 hours to produce the report for the initial emissions intensity test associated with coal-to-gas conversions.
- At each facility, it is assumed that administrative support staff will need an average of 0.5 hours to register facility information (e.g. name, address and contact information for the facility and representatives) with the Department in 2018.
- At each facility, it is assumed that a chemical engineer or an employee with training in natural or applied science (with the same wage rate assumptions as above) will need, on an annual basis, an average of 23.25 hours to complete the administrative requirements associated with annual reporting. This includes data retrieval and entry, sampling and analysis, calculations of net thermal energy produced, CO2 emission calculations, and other calculations.
- At each facility, it is assumed that a senior manager will be expected to spend two hours reviewing and approving the annual reports.
- It is assumed that administrative support staff at each facility will spend one hour recording and filing the annual reports.
Small business lens
The small business lens does not apply to the Regulations, as none of the affected businesses are small businesses. footnote 23
Consultation
On December 17, 2016, the notice of intent (NOI) to develop GHG regulations for electricity generation in Canada was published in the Canada Gazette, Part I, for a 60-day public comment period. The NOI advised of the intent of the Government to amend the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations published on September 12, 2012, and to develop regulatory requirements for natural gas-fired electricity generation. During the 60-day public comment period, 21 comments were received from stakeholders (industry associations, natural gas or renewable sources electricity generators, provinces, non- governmental organizations and others). As a result of these comments, and based on new data received, gathered and generated by the Department, several aspects of the Regulations were reconsidered, resulting in some adjustments. For example, in the NOI, a combustion engine with a capacity of more than 100 MW was initially considered to be large and therefore subject to average annual performance standard of 420 t of CO2/GWh. Under the revised approach, combustion engines with a capacity of more than 150 MW are now considered to be large.
On February 17, 2018, the Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity were published in the Canada Gazette, Part I, for a 60-day public comment period, which included a summary of comments received on the NOI and Government responses to these comments. During the 60-day public comment period, the Department received comments from 22 stakeholders on the proposed definitions, performance standard level, reporting requirements, quantification methods, coal-to-gas conversions, and policy objectives. Below is a summary of these comments and the response by the Government.
Definitions
Some industry stakeholders suggested adding the concept of maximum continuous rating (MCR) to define the electricity generation capacity of a unit because although terminology may vary by jurisdiction or company, the meaning is widely understood by industrial stakeholders. The Department agreed with this suggestion and incorporated this concept into the Regulations.
One industrial stakeholder recommended that the definition of “natural gas” be amended to exclude gas from wastewater treatment systems. Since this type of gas is compositionally similar to landfill or digester gas, which are already excluded from the definition of natural gas, the Department agreed, and the definition was modified.
One industry stakeholder proposed defining “existing units” as facilities that are currently operating and those that have permits to operate but are not yet built, and exempting them from the Regulations. The Department clarified that the Regulations will apply to some existing units in the specific circumstances described in subsection 3(3) of the Regulations. Additionally, the Department noted that a two-year grace period was added to the coming into force date for combustion engine units so that units currently under construction could be commissioned before the coming into force date of the Regulations.
Performance standard level
Some stakeholders suggested that the standards be at least to the level of best available technology (BAT). This approach would require a standard in the range of 360–400 t of CO2/GWh for large combustion engine units, instead of the 420 t of CO2/GWh set in the policy; and 500 t of CO2/GWh for small units, instead of the 550 t of CO2/GWh set in the policy. One stakeholder proposed to prohibit the operation of stand-alone natural gas-fired units after 2040 except as peaking units and others proposed that the performance standards be tightened from time to time in the future. The Department clarified that the main objective of the policy is to ensure new and significantly modified natural gas-fired electricity units are subject to emission performance standards and to provide regulatory certainty on the level of such standards. This is expected to help facilitate investment decision-making processes as the electricity sector transitions away from coal-fired electricity generation to lower and non-emitting forms of electricity generation in Canada.
The Department acknowledges that due to uncertainties about the future supply mix of electricity generation in Canada related to the impact of replacing coal-fired electricity generation capacity, some natural gas-fired electricity units may need to operate above BAT optimal levels from time to time. It is also expected that as more renewable sources of electricity generation come online, the share of natural gas-fired electricity generation in Canada would decrease. The 2017 federal budget committed $21.9 billion over 11 years in green infrastructure investments in alternative fuelling networks, technology demonstration projects, energy efficiency standards, renewable energy demonstration projects, and smart grids.
Two stakeholders suggested that new natural gas combustion engine units should be exempt from the Regulations for the first two years of operation to allow for the stabilization and optimization of such units. The Department determined, based on available information, that stabilization and optimization activities should not have a significant effect on a unit’s annual average emission intensity and thus the exemption was not deemed necessary.
Several industrial stakeholders recommended that the performance standard be calculated on a three-year rolling average (instead of a one-year average) to allow for performance variability of units and/or the integration of renewable sources of electricity. One stakeholder commented that in the event that smaller simple-cycle (SC) units are built, rather than combined-cycle (CC) units, to support the growing amount of intermittent renewable electricity generation, some of these SC units would need to operate above the 33% capacity threshold set in the policy and thus would be subject to the performance standard of 550 t of CO2/GWh set in the Regulations. The Department engaged stakeholders to discuss their proposal. Based on the outcome of these discussions and information provided by an electric system operator, the Department concluded that granting the three-year rolling average was not warranted at this time. The Department noted that there are SC gas turbines currently available for sale that could meet the 550 t of CO2/GWh average annual performance standard required for combustion engines with a capacity of 150 MW or less.
Reporting requirements
One stakeholder commented that the annual monitoring of CO2 emissions should not only include emission intensity (t of CO2/GWh) at a unit level, but also the total volume of emissions produced annually by that unit and that this data be made available for public access. The Department clarified that unit-level CO2 emissions (total volume and emission intensity) will be reported publicly through the Greenhouse Gas Reporting Program (GHGRP). footnote 24
Another recommendation was to include requirements for independent monitoring of all upstream emissions, such as from gas wells, pipelines and processing facilities for methane leakage. The Department noted that the policy is designed to limit end-use emissions of natural gas-fired electricity generation. Regarding upstream methane leakage, in April 2018, the Department published Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) that are estimated to reduce methane emissions from the upstream oil and gas sector by 40 to 45 percent from 2012 levels by 2025. These Regulations require three comprehensive leak inspections per year at most upstream oil and gas facilities, in addition to equipment standards for key methane sources.
Quantification methods
Industrial stakeholders proposed that the fuel-based quantification methods used to report emissions should be aligned with existing protocols such as the quantification methods used in the GHGRP, the Western Climate Initiative, or with protocols prescribed by provincial governments for emissions reporting. The Department reviewed existing quantification methods and modified some fuel sampling requirements to further bring the Regulation’s fuel-based quantification method in line with the GHGRP.
Another recommendation was to allow for the use of provincial protocols for CEMS, for example Alberta’s CEMS Code to be used instead of the Reference Method. footnote 25 The Department did not provide the option for units in Alberta to use the province’s CEMS Code. The Department noted that the Alberta CEMS Code is currently under revision. Further, few units are expected to choose CEMS as a quantification method to measure and report emissions under the Regulations.
Some stakeholders recommended that the emission intensity limits for units equipped with both large (>150 MW) and small (≤150 MW) combustion engines, be applied in a similar manner to the hybrid configuration concept (as described at subsection 3(5), meaning a combination where a combustion engine and a boiler share a common steam turbine). Under the current approach, any unit equipped with both large and small combustion engines would be subject to the large performance standard of 420 t of CO2/GWh. Applying the hybrid configuration concept to these types of units would allow the unit to be subdivided and subject to different performance standards. That is, the small combustion engine (and any other equipment connected to it including the steam turbine that it shares with the large combustion engine) would be subject to the 550 t of CO2/GWh performance standard. And, vice-versa, the large combustion engine (and any other equipment connected to it including the steam turbine that it shares with the small combustion engine) would be subject to the 420 t of CO2/GWh performance standard. The Department engaged stakeholders following the comment period to better understand this suggestion. The Department subsequently concluded that this type of configuration, where a unit is equipped with both large and small combustion engines, is not common industry practice and where it does exist, it is the result of a retrofit. Therefore, this recommendation was not incorporated into the Regulations.
One stakeholder recommended including a requirement related to the emergency clause, such that if a unit operates under this clause that it be required to compensate for emissions above the relevant performance standard. Suggested mechanisms included purchasing emission allowances or offset credits. The Department clarified that the emergency clause is meant to allow operators to call units online to avert emergencies and thus these units should not be penalized.
Coal-to-gas conversions
Some stakeholders commented that the prescribed period for which a converted coal-to-gas boiler unit may operate without meeting a performance standard was too long (up to 10 years after the unit’s end of useful life). They suggested that coal-to-gas conversions that cannot meet a performance standard of 420 t of CO2/GWh should be forced to cease operations by December 31, 2029, or within 8 to 10 years after conversion, whichever comes first. They argued that this should include coal-to-gas conversions under any potential federal-provincial equivalency agreements. The Department concluded that based on available information on the announced six coal-to-gas conversions in Alberta, which are expected to occur between 2020 and 2022, and considering technological/economic constraints, most of these units are not expected to operate beyond December 31, 2029.
While one stakeholder proposed increasing the level of the 2% performance decay annual allowance for coal-to-gas converted boilers, another opposed limiting annual performance decay to 2%, arguing that it could interfere with maintenance scheduling. The Department noted that the 2% is very achievable and it was determined that the level of this performance decay allowance is enough to achieve the objective of preventing significant degradation of coal-to-gas converted boilers from year to year. The 2% performance decay allowance is needed to ensure that operators will maintain their coal-to-gas converted boilers in good operating condition.
An industrial stakeholder suggested including additional and specific parameters for emission performance testing. For example, that the initial performance test be completed within six months after a coal-to-gas conversion, and that the required emissions testing parameters be based on normal operating conditions and not staged in unrealistic and under-optimal conditions as set in the policy. The Department clarified that the emission intensity levels set for the initial performance tests were chosen acknowledging that the parameters in the Regulations allow for operators to choose their best window for an initial performance test and subsequent annual performance testing.
Policy objective
Some stakeholders commented that the policy facilitates the phase-out of one fossil fuel by its replacement with another fossil fuel (coal to natural gas) and does not send meaningful market and/or price signals to investors on natural gas and therefore decreases the policy’s role in the energy mix in Canada. The Department noted that the policy objective of the Regulations is to ensure new and significantly modified natural gas-fired electricity units are subject to emission performance standards and to provide regulatory certainty to stakeholders about the level of such standards, while supporting one of the objectives of the Pan-Canadian Framework on Clean Growth and Climate Change, to accelerate the reduction of GHG emissions from coal-fired electricity generation in Canada. There are other federal initiatives, such as the Greenhouse Gas Pollution Pricing Act and clean fuel standard (under development) that are expected to send market and/or price signals to the sector that could result in investments of lower or non-emitting forms of electricity generation in the future in Canada.
One of the issues arising from the Department’s engagement with industry stakeholders was a concern that federal climate change policies affecting the electricity sector, including the regulations to accelerate GHG reductions from coal-fired electricity generation, the clean fuel standard, and the output-based carbon pricing system, were being developed at a challenging pace and were overlapping each other. The Department established The Multi-Stakeholder Committee on GHG Regulatory Measures and Programs to serve as a forum for stakeholders to identify issues of interest or concern and share views on the interactions (synergistic and overlapping) among climate change programs and regulations, as well as on the cumulative GHG emissions and socioeconomic impacts.
Rationale
In Canada, significant investment is expected in the electricity sector as it phases out the use of coal to generate electricity. Investment decisions to build electricity generation capacity are a complex process that involves analyses of several factors such as a forecast of energy/capacity demand and of market pricing/constraints. Other factors, such as lack of clarity of regulatory frameworks, could affect the sector in the future and influence investment decisions on how to replace coal-fired electricity generation capacity. As a result, the Regulations will set GHG emission intensity limits for new and significantly modified natural gas-fired electricity generation units in Canada and provide regulatory certainty on the level of such standards. This is expected to help ensure the transition to lower emitting electricity generation and is consistent with the Government’s overall strategy to reduce GHG emissions.
Impacts on Canadians, the Government and businesses
Canadians
The Regulations are not expected to have an impact on Canadian consumers.
The Government
Minor additional resources are anticipated to process annual emission reports as a result of the Regulations. As affected units are expected to be compliant with the performance standards, no significant incremental costs associated with compliance promotion or enforcement activities are anticipated.
Businesses
Owners and operators choosing to replace coal-fired electricity generation capacity or meet increasing demand of electricity in Canada with new natural gas-fired electricity generation, specifically with combustion engines, are expected to do so by using existing efficient technologies that are compliant with the emission performance standards set out in the Regulations. This is because these technologies minimize fuel consumption and emit about 40% to 50% less GHG emissions than coal-fired electricity generation. These factors combined help respond to changes in market structure and carbon pricing or carbon reducing policies that governments have implemented, or plan to implement. Owners and operators choosing to convert their coal boilers to burn natural gas to produce electricity (coal-to-gas conversion), as a short-term transition away from coal, are expected to comply with the performance test parameters and operate within the timeframe set out in the Regulations. This is based on the analysis of the information obtained from operators and generated by the Department. As a result, the Regulations are not expected to have a significant impact on businesses choosing to build new natural gas-fired electricity generation capacity in Canada, including coal-to-gas conversions.
For each calendar year during which a natural gas-fired electricity generation unit is subject to the Regulations, owners and operators will be required to submit a report on the unit’s average annual emissions intensity. To comply with the reporting of average annual emissions, the two methods to quantify emissions (i.e. CEMS and fuel-based) required by the Regulations are not expected to have a significant impact on businesses. This is due to the alignment of these reporting requirements with those under the changes to the GHGRP, which are expected to come into force before the Regulations. Similarly, for coal-to-gas conversion units, owners and operators will be required to submit annual performance test reports, which consist of a single test run, lasting at least two hours. This requirement is not expected to have a significant impact on businesses. In both cases, regulatees will need to make and keep records of these reports for a period of seven years.
Based on available information provided by industry and generated by the Department, the Regulations will not have a significant impact on businesses.
Strategic environmental assessment
The Regulations were developed under the Pan-Canadian Framework for Clean Growth and Climate Change. A strategic environmental assessment (SEA) was completed for this framework in 2016. The SEA concluded that regulations under the framework will help reduce GHG emissions and are in line with the 2016–2019 Federal Sustainable Development Strategy. The Regulations are an important part of the Strategy and align with the clean energy goals for Canadians to have access to affordable, reliable and sustainable energy. footnote 26
Implementation, enforcement and service standards
Once the Regulations come into force, the Department will develop and deliver implementation activities. This may include posting information on the Department’s website, advising stakeholders of the final regulatory publication, responding to information or clarification requests, and sending reminder letters (as appropriate).
Enforcement
Enforcement officers will, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy (the Policy) for the Canadian Environmental Protection Act, 1999 (CEPA). footnote 27 The Policy sets out the range of possible responses to alleged violations, including warnings, directions, environmental protection compliance orders, tickets, ministerial orders, injunctions, prosecution and environmental protection alternative measures (which are an alternative to a court prosecution after the laying of charges for a CEPA violation). In addition, the Policy explains when the Department will resort to civil suits by the Crown for cost recovery.
To verify compliance, enforcement officers may conduct an inspection. An inspection may identify an alleged violation, and alleged violations may also be identified by the Department’s technical personnel, or through complaints received from the public. Whenever a possible violation of regulatory requirements is identified, enforcement officers may carry out investigations.
When, following an inspection or an investigation, an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the following factors:
- Nature of the alleged violation: This includes consideration of the damage, the intent of the alleged violator, whether it is a repeat violation, and whether an attempt has been made to conceal information or otherwise subvert the objectives and requirements of CEPA;
- Effectiveness in achieving the desired result with the alleged violator: The desired result is compliance within the shortest possible time and with no further repetition of the violation. Factors to be considered include the violator’s history of compliance with CEPA, willingness to cooperate with enforcement officers, and evidence of corrective action already taken; and
- Consistency: Enforcement officers will consider how similar situations have been handled in determining the measures to be taken to enforce CEPA.
The Regulations will also require related changes to the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999). These Regulations designate the regulatory provisions from CEPA regulations that refer to an increased fine regime following a conviction of an offence involving harm or risk of harm to the environment, or obstruction of authority.
Contacts
Paola Mellow
Director
Electricity and Combustion Division
Environment and Climate Change Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: ec.electricite-electricity.ec@canada.ca
Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Environment and Climate Change Canada
200 Sacré-Cœur Boulevard, 10th Floor
Gatineau, Quebec
K1A 0H3
Email: eccc.darv-ravd.eccc@canada.ca