Clean Electricity Regulations: 30 t/GWh Standard

Summary#

This is a proposed federal rule called the Clean Electricity Regulations, published by Environment and Climate Change Canada on August 19, 2023. It would set a new emissions-intensity limit for large fossil‑fuel electricity units to push Canada’s grid toward cleaner power by 2035; the government’s modelling estimates about 342 million metric tonnes of avoided greenhouse gases and a net societal benefit of $28.9 billion over 2024–2050 under central assumptions.

What it does#

• Covers any electricity “unit” that:
  • uses any fossil fuel,
  • has capacity of 25 MW or more, and
  • is connected to an electricity system covered by NERC standards.
• Sets an annual emissions-intensity limit of 30 tonnes CO2 per GWh (30 t/GWh) that applies starting January 1, 2035 for most covered units.
• Requires registration and reporting:
  • units already in service must register by the end of 2025;
  • units commissioned on or after January 1, 2025 must register within 60 days of commissioning.
• Gives limited, time‑bound exceptions:
  • short-term peaking/back‑up use: up to 450 hours per year and up to 150 kilotonnes CO2 in a year; or
  • a transition window for units with carbon capture: allowed up to 40 t/GWh for up to 7 years after a CCS system is commissioned or until December 31, 2039, if certain short tests show the unit can operate at 30 t/GWh.
• Allows emergency use with a Ministerial exemption, and sets detailed rules for how emissions and electricity are measured, reported and audited.
• The published proposal would repeal earlier federal rules for coal and some gas plants (if finalized).

Who's affected#

• Large electricity generators and plant owners/operators — especially those that burn coal or natural gas and have units ≥ 25 MW.
• Utilities, independent power producers and system operators who plan capacity and reliability.
• Industrial facilities that sell electricity into the grid (they are covered if they are net exporters in a given year).
• Provinces and territories that rely more on fossil-fired generation — the analysis highlighted Alberta, Saskatchewan, Nova Scotia and New Brunswick as most likely to feel larger changes to generation and rates.
• Companies and investors in clean power, CCS, storage, transmission, nuclear and renewables (likely to see increased demand for projects).
• Electricity customers — households and businesses — could see modest changes in rates; modelling shows peak household impacts in 2040 in some provinces (examples in the analysis: national average annual household bills up roughly $35 to $61 at peak under central modelling).
• Remote and many Indigenous communities that are not connected to NERC-regulated systems would generally be outside the rule’s scope (the proposal says those communities were consulted and that separate supports exist).

Why it matters#

• It’s meant to make the electricity supply much cleaner by 2035, because cleaner electricity is needed to reduce emissions from heating, transport and industry as Canada moves toward net‑zero by 2050.
• The government’s modelling sees large climate benefits (GHG reductions and monetized avoided climate damages) and net economic benefits over the modelling period. Specifically, modeled incremental benefits were $102.5 billion against incremental costs of $73.6 billion, giving a net benefit of $28.9 billion (all in 2022 dollars, discounted).
• The rule would shift investment toward low‑ and non‑emitting options (wind, solar, hydro, storage, CCS, nuclear, transmission). That means different kinds of jobs and project activity, and substantial capital spending at the provincial level (the government has said electrification could require more than $400 billion of investment over time).
• Health and local air‑quality benefits are expected where fossil generation is replaced, though those benefits weren’t fully monetized in the public analysis.
• There are distributional concerns: provinces with heavier fossil reliance and lower-income households may face bigger short‑term rate or affordability impacts. The proposal includes flexibilities and notes complementary federal funding and programs aimed at easing those impacts.
• This text is a proposal (Canada Gazette, Part I). The publication invited comments (the notice allowed 75 days for submissions from the date of publication). The measures would only become law if finalized in Canada Gazette, Part II and brought into force as stated in the final regulations.