The regulations will set performance standards for new
coal-fired units and those that have reached the end of their
useful life. Under the regulations, new units are those that start
producing electricity on or after July 1, 2015. Units at the end of
their useful life are those that have produced electricity for 50
years. Transitional rules apply to plants built before 1986.
Performance standards will come into effect on July 1, 2015.
However, regulated entities will be required to begin reporting
emission levels two years in advance of that date.
The regulations will effectively prohibit building new units
without carbon capture and storage (CCS) equipment. Additionally,
units reaching the end of their useful life will be forced to close
unless retrofitted with the CCS equipment. This is significant
because the government speculates 75% of coal plants will reach the
end of their useful life by 2025 and 80% by 2030.
Over the first 21 years of its enactment, the government expects
that a cumulative effect of these regulations will be a reduction
of 214 megatons of greenhouse gas emissions. However, the true
effect of these regulations is open to debate. The first coal plant
closure resulting from these regulations will not likely occur
before 2020. Furthermore, Ontario has already committed to shutting
down its coal-fired electricity facilities. Alberta,
Saskatchewan and Nova Scotia are the provinces most dependent on
coal. But in an era of comparatively low-emitting gas facilities
combined with relatively cheap gas supply, it is unlikely that
these provinces will have incentives to build new coal-fired plants
or invest further in aging existing units. Essentially, any
reduction of carbon emissions from coal-fired plants is likely
market driven and may not be the result of these regulations.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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