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Alberta Leads the Way on Climate Change Technology

We blogged last week that the CCEMC had announced that it had selected projects in which it would be investing a total of $71 million.

Davis LLP attended the press conference yesterday morning in which CCEMC Chair, Eric Newell, announced some of the projects which would be receiving funding.

1. ECB Enviro North America Inc. was awarded $8.2 Million for a biogas co-generation project in Lethbridge, Alberta. Thane Hurlbert, the company's president, indicated that the project will employ approximately 15 people in green jobs and that the plant will be ready to go in 2011.

2. Plasco Alberta and its partner, Red Deer County, were awarded $8 million to builld a plant to convert solid waste into clean fuel gas that can be burned in a combustible engine. A pilot project is already under way in Ottawa, and the first commercial scale project will be built and operated in Red Deer. Plasco Executive Vice-President, Corporate Development, Lynde Coit thanked Red Deer County for their decision to implement this new technology over the establishment of a new landfill.

3. Enmax Corporation was awarded $14.5 million to instal solar or wind power home generation kits to 9,000 homes across Alberta over the next five years. ENMAX Executive Vice President for Smart Grid Technologies, Helen Bremner, indicated that the project will extend benefits of greenhouse gas reductions to the consumer level. The first installation is expected in the spring of 2011 and then will move across Alberta region by region. Green jobs will be created by the ENMAX program.

4. City of Medicine Hat was awarded $3 million for the Medicine Hat Concentrating Solar Thermal Power Project. Concentrating solar thermal technology can produce heat, power, and chemicals, using energy from the sun while avoiding burning fossil fuel and its cost and air emissions. This hybrid energy system will be installed and will evaluate the technology's potential Alberta-wide.

5. Enerkem Inc. was awarded $1.8 million to develop a pilot plant to produce biofuel and utilize CO2. Enerkem's technology converts residual materials, such as non-recyclable municipal solid waste, into transportation fuels and advanced chemicals. Through this project, Enerkem and its partners will use waste, such wood and straw, to produce clean biofuels, and will also incorporate carbon dioxide directly in the process, demonstrating the potential for greenhouse gas reductions in biofuels production.

The projects announced yesterday represent a total of $37 of the $71 million in funding announced by the CCEMC. Chairman Newell indicated that another 11 projects in the energy-efficiency and the carbon capture and storage sectors will be announced in the next two weeks.

These announcements mark a significant step in Alberta's fight against climate change. Both the Alberta provincial government and federal government have indicated that technology and innovation are the pathway to significant emissions reductions.

Since 2007 the Canadian Government has invested in a range of ecoAction programs, many of which promote the use of new technologies. In 2009, Canada's Economic Action Plan included billions of dollars in spending on initiatives like the Clean Energy Fund and the Green Infrastructure Fund. They provide close to $2 billion for the development of promising clean energy technologies and green infrastructure projects.

Alberta's 2010 Speech from the Throne makes direct reference to innovation and technology and the federal dollars are in addition to the clean energy technology initiatives that Alberta has undertaken provincially - the $2 billion Alberta CCS spend is one example. The funding outlined in the CCEMC's announcements are another.

With the 5 annoucements yesterday and more to come, it's clear that Alberta is leading the way on climate change technology.

Environment Minister Says US Laws Could Backfire

Alberta's Environment Minister, Rob Renner, is in the United States this week to talk about climate change and Alberta's commitment to clean energy. But the Minister is also warning that "new low-carbon fuel standards proposed in the North-eastern U.S. could actually slow the greening of the oilsands", the Edmonton Journalreports. Amid typical and predictable remarks from environmentalists that the Minister's comments are "outrageous", Minister Renner said that "[w]e need to make sure that whatever we do doesn't have the unintended consequence of disinsenting further investment into technology that will reduce greenhouse gas emissions".

Why would they? Because the low carbon fuel standards being proposed penalize more carbon intensive fuel sources like shale gas or oilsands, Alberta's climate change policy. These laws would force refiners to reduce the amount of oilsands fuel in the oil they refine or purchase offsets or credits, ultimately making oil produced from the oilsands more costly.

The Minister wants to ensure that critics of the oilsands understand what they are talking about, given that the anti-oilsands campaigns launched by various environmental organizations never really provide the full picture about the oilsands. The Minister remarked "[i]t's not up to us to tell other jurisdictions what they should and shouldn't do. It's up to us to ensure that as tehy make policy decisions, they do so in the context of thorough information and balanced information".

Despite what the Minister calls a perception that Alberta isn't doing anything about greenhouse gas emissions or climate change, Alberta's climate change policy, which includes spending the millions of dollars in the Climate Change and Emissions Management Fund has reduced Alberta's emissions per barrel of oil produced.

As we reported last week, the CCEMC has announced spending of $71 million on clean and green projects. Tomorrow the specific projects will be revealed. Stay tuned and we will be present for the announcement. Stay tuned.

The CCEMC Awards $71 Million to Clean and Green Projects

The Climate Change and Emissions Management (CCEMC) Corporation, which administers Alberta's Climate Change and Emissions Management Fund, has announced it will invest approximately $71 million dollars in sixteen projects in the areas of greening energy production, carbon capture and storage and energy conservation and energy efficiency.

The Fund, which currently sits at about $185 million dollars, is one compliance option for the 100 or so specified emitters in Alberta to comply with the province's emissions reduction legislation, the Climate Change and Emissions Management Act and its associated regulations. Monies from the Fund, which may only be used for the purposes described in the Act, are granted to the CCEMC, which is an arm's length organization, independent from government. The CCEMC is leveraging the dollars from the Fund with the proponent organization's own and other sources of funding to fund new technologies which reduce emissions of specified gases or improve the ability to adapt to climate change.

Alberta is currently the only jurisdiction in North America which requires emitters to reduce their carbon emissions below a specified threshold and the Fund is an important component of Alberta's overall climate change strategy. The projects will be announced by CCEMC Chair Eric Newell on June 16 in Edmonton. The announcements are the next step in the process begun in 2009 with the CCEMC's 2009 Call for Proposals: Initial Expression of Interest Stage. Project proponents will be required to enter into agreements with the CCEMC and, as Chair Eric Newell asserts, those projects will "have project milestones; we want to see results".

The announcement of funding is significant for the CCEMC and for Alberta. It is the first time that the monies from the Fund are being allocated. If successful, the projects will create a direct link between the Fund as a compliance option and the reduction of emissions in Alberta.

We will be present for the public annoucement of projects on June 16th. Stay tuned.

Ontario ratchets coal plant emissions cap down to 11.5 Mt beginning in 2011

The province of Ontario has lowered its voluntary cap on CO2 emissions from coal-fired generation to 11.5 megatonnes (Mt) for each of 2011 through 2014. While this cap is significantly lower than the cap of the past two years, it is not low enough for many environmentalists, particularly given the level of actual emissions last year.

The government of Ontario, through its Ministry of Energy and Infrastructure, is the sole shareholder of Ontario Power Generation ("OPG"). In that capacity, the government issued a shareholder directive to OPG on May 20 limiting the CO2 emissions from OPG's four coal-fired generating stations to 11.5 Mt per year. A previous directive in April 2008 set the limit for 2009 at 19.6 Mt and for this year at 15.6 Mt. The new limit established by the May 20th directive is therefore 41% lower than the 2009 limit and 26% lower than this year's limit.

However, the new limit is higher than actual emissions in 2009. According to OPG's 2009 Sustainable Development Report, 2009 emissions from coal-fired generation were about 10.1 Mt. The new cap of 11.5 Mt for 2011 and beyond is therefore 14% higher than actual emissions in 2009 (the Ontario Clean Air Alliance pegs the difference at 17% based on 2009 emissions of 9.8 Mt, although we have been unable to determine where they obtained the 9.8 Mt figure).

Several stakeholder groups are crying foul at a limit that exceeds recent historical emissions. The Ontario Clean Air Alliance characterized the decision in particularly harsh terms, saying, "Premier McGuinty's decision to permit Ontario Power Generation to increase the output of its dirty coal-fired power plants by 17% is a cynical betrayal of the public trust. To save lives, reduce asthma attacks and to help prevent dangerous climate change, Premier McGuinty should direct Ontario Power Generation to put its coal-fired power plants on standby reserve and only operate them if they are absolutely necessary to keep the lights on."

Neither the Premier's office nor the Ministry of Energy and Infrastructure have commented on the directive to OPG. However, we suspect that the decision to set the limit above 2009 emissions was informed by the economic downturn of the past year and a half. By setting the limit above 2009 emissions, the government may have intended to leave some generation capacity headroom to accommodate a bump in demand as the economy recovers.

However, it is curious that the limit flatlines at 11.5 Mt through 2014, when coal-fired emissions are to be phased out. We would have expected to see the cap continue to be reduced in the last 4 years of coal-fired generation in the province, particularly in the last couple of years when more and more Feed-in Tariff projects should be coming online.

In any event, OPG may continue its recent track record of keeping emissions significantly below its mandated limit.

BC's Clean Energy Act becomes law

BC's Clean Energy Act received royal assent on June 3, 2010. As previously reported, the Clean Energy Act revamps the province's energy laws to achieve a long list of objectives, including developing renewables, achieving energy self-sufficiency, promoting energy exports, encouraging conservation, and facilitating the participation of First Nations in energy projects.

Significant work remains to be done in writing the regulations required under the Act (for example, to define the promised feed-in tariff program). If Ontario's roll-out of the Green Energy Act serves as a reasonable guide, these regulations could be ready by early fall.

More information about British Columbia's clean energy future can be found at the new Powe of BC website.

Renault-Nissan Alliance Signs Zero-Emission Vehicle Partnership in Québec

On June 1, 2010, the Renault-Nissan Alliance announced that Nissan Canada had entered into a memorandum of understanding (MOU) with the Government of Québec, the City of Montréal, Québec City, Hydro-Québec and the Agence de l'efficacité énergétique du Québec which aims to advance zero-emission mobility in Québec.

Under the MOU, the parties are to work together to plan the necessary charging infrastructure and to promote the use of zero-emission vehicles in Québec. The MOU agreement adds Québec to a growing network of zero-emission vehicle initiatives across the world.

Of the agreement, the participants were quoted as follows:

Québec Minister of Natural Resources Nathalie Normandeau was quoted as saying "This agreement brings us a step closer to a governmental action plan on electric vehicles, which will be launched within the next few months [...] we are planning a series of concrete actions that will pave the way for the arrival of electric vehicles in Québec. Since 97% of our electricity comes from clean, renewable resources, Québec presents a number of advantages for the introduction of electric vehicles."

"The Renault-Nissan Alliance has committed to being a global leader in zero-emission mobility, which is one of the best solutions for reducing CO2 emissions," said Mark Grimm, President Nissan Canada Inc. "We look forward to bringing the Nissan LEAF, the only mass-market zero-emission car at an affordable price, to Québec. Our partners have already demonstrated their commitment to combating greenhouse gas emissions and we anticipate a productive collaboration."

Thierry Vandal, Hydro-Québec's President and CEO, added that "[this] announcement falls perfectly in line with our Strategic Plan 2009-2013 and other initiatives currently underway at Hydro-Québec. This memorandum of understanding will allow us to work closely with these important partners to carefully plan for the arrival of electric vehicles in Québec."

"Montréal is a true leader with respect to the reduction of greenhouse gas emissions," said Alan DeSousa, Vice-President of the Executive Committee and responsible for finance, sustainable development, environment and parks. "The memorandum of understanding signed with our partners meets the objectives of Montréal's Strategic Plan for Sustainable Development. It will raise our city's profile in North America with regard to electric vehicles and will help us reach our goal of reducing greenhouse gas emissions by 30% by the year 2020."

Québec City's Mayor, Régis Labeaume stated: "This partnership is in line with Québec City's ongoing efforts to develop sustainable transportation. The implementation of the Écolobus service, a fleet of non-polluting, ultra-quiet electric minibuses that travel the streets of Vieux-Québec, is a great success that contributes to maintaining the quality of the capital's environment."

Nissan, along with its alliance partner Renault, is committed to making affordable, all-electric vehicles available to the mass-market globally. The Nissan LEAF, a five-passenger all-electric vehicle, will first be available in select Canadian markets, such as Québec, before the end of 2011.