CIAB Market & Policy developments 2005/06 - IEA

196. States are taking independent action. In California, laws have been passed requiring that
regulated utilities must meet a new standard of 1100 lbs/MWh (approx. 500kg/kWh) of
CO 2 emissions in new long term agreements. Washington State recently enacted similar
requirements. Firms in Interconnected States selling electricity into the California market
are now looking at the implications for contracts.
197. Efficiency increases for existing and new electricity plant is in debate but not at the
forefront. The main CCS focus is now on large scale projects (>1 million tons p.a.) in
multiple geologies. Seven regional proposals to the DOE are pending.
198. Most language is not aimed just at IGCC, but at any process (e.g. pulverised fuel plus
CCS, Oxyfuel firing etc.) that allows CCS. EPRI analysis indicates that to aggressively
reduce CO 2 emissions will require use of all the technology options (increased end-use
efficiency, renewable energy, nuclear power, increased coal-fired generation efficiency,
CCS and hybrid vehicles) and that R&D plus demonstration and deployment support is
inadequate.
199. An August 2007 EPRI study “The Power to Reduce CO2 Emissions – The Full Portfolio”
(http://epri-reports.org/DiscussionPaper2007.pdf) concluded that a projected cost of $1.8
trillion to dramatically reduce CO 2 emissions by 2050 could be halved by spending $1.4
billion each year to 2030 for research and development on a range of technologies, with
almost half the expenditure going towards research into advanced coal technology and
carbon capture and storage.
Canada
200. Energy policy is market-based and oriented towards sustainable development. A major
goal is to achieve both environmental and economic excellence in any energy project
brought to market. Canada’s Energy Policy has three main objectives:
• Security – ensure access to affordable, reliable and secure sources of energy;
• Prosperity - ensure that the energy industry contributes to the prosperity and
quality of life for all Canadians; and
• Environment - ensure that environmental considerations are always considered
when developing energy projects.
201. It is supported by four key principles:
• Reliance on the market to allocate resources - Prices are established and
investment decisions must be governed by a competitive energy market under
the auspices of the NAFTA framework.
• Respect for Jurisdiction - Energy and other resources are owned by the
Provinces in which they are located. Each Province must develop its own Energy
Policy. (Alberta, with its predominately carbon based economy, has its own Coal
Policy).
• Regulation - Regulation as required to ensure that the markets work.
• Targeted Investment - Investment to supply necessities when the market will not
respond to demand.
202. New challenges are emerging, with security concerns higher than they have ever been.
A review is considering refocusing policy initiatives around at-home investment, energy
efficiency and emergency preparedness.
203. New CO 2 emissions policies were introduced in the first half of 2006, involving a 6% per
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