Promoting Green Power in Canada - Centre for Human Settlements

Promoting Green Power in Canada Pollution Probethey also have a cap-and-trade provision.Under a capless GPS regime, if moreelectricity is generated in a given year, overallemissions can increase. The NESCAUMEmission Performance Standard (EPS, sameas GPS; see Box 4.5) was designed to applyto retailers instead of power generators toincorporate production from outside the GPSimplementation area (mainly Canada, alsoneighbouring US states), and a cap was leftout since major changes in retail marketswere expected [NESCAUM 1999, p. 30]. Acap-based system may need frequentadjustments to the allowance pool, which isnot the case with an EPS applied to retailers.However, under a GPS, all energy producersare normally included, such as nuclear andlarge hydro facilities, which heavily reducesthe incentive to buy power from moreexpensive non-large hydro renewable powerfacilities. While encouraging conventionalenergy to become less polluting, NESCAUM’sEPS still needs a renewable portfoliostandard (RPS) to foster the development ofrenewable power.A GPS could exclude both nuclear and largehydro, but include fossil fuel-basedgeneration units and all non-hydrorenewable power generators, instead ofsetting aside part of the budget for the latter.If an emission cap was applied to powerBox 4.5 — The NESCAUM GPS Model RuleThe Northeast States for Coordinated Air Use Management (NESCAUM), composed ofthe six New England states, New York and New Jersey, have developed a Model Rulebased on Emission Performance Standards (EPS) for NOx, SO 2, and CO 2, with mercuryand CO standards to follow later. The Model Rule provides for year-round (as opposed toseasonal obligations imposed by current NOx cap-and-trade systems in the region) NOxemissions limits and provides a mechanism for collecting data and eventually imposing astandard for mercury emissions. The EPS is applied to retail suppliers, limiting the overallenvironmental impacts of serving retail electricity demand in a particular state, regardlessof the variety and geographic location of generation resources used to serve thatdemand. The proposed EPS levels are:4 lb/MWh for SO 2,1 lb/MWh for NOx, and1,100 lb/MWh for CO 2.Until more data are collected, the effective standard for mercury is defined as the actualemissions rate. A standard for carbon monoxide (CO) has been reserved for furtherevaluation.The Workgroup chose to include all resources in compliance determinations, without regardto fuel type. Compliance with the standards is determined by averaging the emissionscharacteristics of all generating resources associated with meeting a licensed supplier’sretail load obligation for each of the electricity products sold by the supplier in the EPSimplementing state. Compliance is determined on an annual basis, though suppliers arerequired to provide information on a quarterly basis. The Model Rule assumes thatauthority to impose an EPS will be linked to a state’s licensing authority over retailelectricity suppliers; in other words, suppliers will be required to comply with the EPS as acondition of being licensed to do business within the implementing state [NESCAUM 1999].74