Energy Plan - Government of Newfoundland and Labrador

As limitations on GHG emissions are progressively imposed in Canada and the
U.S., the cost of electricity production from thermal generation that emits GHGs
will increase. As a result, clean, electricity sources such as the proposed Lower
Churchill project, will benefit from an increase in the market value for electricity.
A GHG emission trading scheme will create a market value for emission credits
- driven by supply and demand for credits in the market. If these credits were
issued to generators of clean power, these credits may be able to be applied
against emissions from thermal generation within a company or sold to other
companies that cannot reduce their emissions enough to meet their regulated
targets. The province is in favor of implementing this type of trading program,
provided our abundant renewable resources, particularly the Lower Churchill and
wind opportunities, are clearly able to obtain a reasonable, market based value
for the credit opportunities they generate.
A number of American states, including all of New England as well as New
York, have joined together to create the Regional Greenhouse Gas Initiative
(RGGI) which sets limits on emissions of carbon dioxide (the primary GHG)
from the electricity sector and creates tradable GHG emission allowances.
The provinces that belong to the New England Governors – Eastern Canadian
Premiers Conference have committed to consider whether to join RGGI and
Newfoundland and Labrador looks favorably upon this option.
Technology Fund Options
The concept of a Technology Fund as a compliance mechanism has been outlined
in Canada’s Regulatory Framework for Air Emissions, and provides a means for
emitting entities who cannot achieve reduction targets to make payments to a
technology fund which invests the proceeds in projects and assets which will
reduce GHG emissions over the long term.
This concept could be an important mechanism to facilitate the development of
transmission links between Newfoundland and Labrador and Canadian markets
that require renewable energy, such as the Maritime Provinces and Ontario.
Projects such as the Lower Churchill Project are excellent candidates for such
investments, given their proven ability to reduce GHG emissions over the long
term.
The province is in favor of implementing the concept of a technology fund,
provided reasonable timeframes are allowed for industry to prepare and adjust
to new GHG emission targets, and the technology investments are targeted at
facilitating obviously high value opportunities such as the Lower Churchill and the
province’s wind development opportunities. Such projects will have the ability
to contribute not only to our province, but also to the GHG reduction objectives
of the Maritime Region and Ontario.
POLICY
ACTIONS
Capturing the Value of Our
Renewable Energy
The Government of
Newfoundland and Labrador will:
• Strongly support mechanisms
for investment in renewable
energy projects and work to
ensure that technology fund
investments are directed
towards regional and national
initiatives, such as eastwest
transmission projects,
with proven ability to reduce
emissions.
• Work with the Government of
Canada and other provinces,
as well as with industry
to develop a technology
fund that will invest in
transmission for the Lower
Churchill Project and wind
opportunities.
• Work through the New
England Governors –
Eastern Canadian Premiers
Conference to consider
participation in the Regional
Greenhouse Gas Initiative,
while allowing the appropriate
amount of time to allow a
prudent economic transition.
(continued)
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