Phasing out Coal

In late June 2010, the Canadian federal government announced plans to phase out older coal-fired power plants to cut the country’s greenhouse gas (GHG) emissions. Draft regulations are expected in early 2011, with final regulations in effect July 1, 2015. “When each coal-burning unit reaches the end of its economic life, it will have to meet the new standards or close down,” said Environment Minister Jim Prentice.

As proposed, the plants will have to meet the emissions standards of high-efficiency natural gas electricity generation. The regulations are expected to spur conversion to more natural gas power. But why switch from coal to natural gas, another fossil fuel, decades from now when a better solution is available today?

Co-firing of coal with wood pellets can reduce GHG emissions by 91% compared to burning coal alone, according to a recent Ontario study. So, the Wood Pellet Association of Canada (WPAC) is urging immediate action on reducing emissions from existing coal power plants by implementing co-firing, as has been done in Europe for more than a decade.

The European Union (EU) accounts for 80% of global wood pellet consumption, at about 8 million tonnes/year. The European Biomass Association estimates that this could grow to 80 million tonnes by 2020. An estimated 66% of the EU’s renewable energy is from biomass. This success is largely due to aggressive policy initiatives at the EU level and by individual member states.

In 1997, the EU set a target of 12% of energy consumption from renewable sources by 2010. In 2001, it enacted a directive requiring all member states to adopt national targets for renewable energy. Co-firing increased significantly, with annual growth rates of 20% in 2002, 13% in 2003, and 25% in 2004.

In 2005, the European Commission published its Biomass Action Plan, with a main objective of doubling the share of biomass energy from 4% to 8% by 2010. The European Emission Trading Scheme was also implemented, requiring large CO2 emitters to monitor and report CO2 emissions annually and return an equivalent amount of emission allowances to the government each year.

In 2009, the EU enacted a new directive with mandatory targets of 20% renewable energy, 20% reduction in GHG emissions, and 20% improvement in energy efficiency by 2020. The directive includes ambitious individual targets for member states, and fines for those not meeting their targets. Each state must submit a national biomass action plan by June 30, 2010.

Many EU countries use feed-in tariffs to promote electricity generation from renewable sources. Some use green certificates, based on the principle of imposing minimum shares of renewable electricity on consumers, suppliers, or producers. Compared to feed-in tariffs, green certificates are market oriented, based on the supply and demand of certificates. Electricity producers receive revenue from certificates in addition to the sale of electricity.

Today, more than 100 European power plants co-fire. In contrast, Canada consumes about 1% of the amount of wood pellets consumed by Europe, and none of our coal power plants co-fire. Canada is one of the world’s largest GHG emitters. Our coal-fired electricity generation units produce 19% of our electricity and 13% of our total GHG emissions. According to the Conference Board of Canada, we rank second-to-last out of 17 OECD countries for per-capita GHG emissions. In 2005, Canada’s GHG emissions were 22.6 tonnes per capita, almost double the 17-country average of 12.4 tonnes per capita, and almost four times greater than Norway’s, the top performer. Given Europe’s success and our own poor record, we should be looking to the EU’s experience for ideas as we develop new Canadian policy.

The federal government has made a good start by announcing plans for regulating coal-fired power plants. WPAC met with senior Environment Canada officials in Ottawa on July 7 to present evidence of the benefits of co-firing and to urge officials to provide for co-firing in the new regulations. If Canada co-fired at a rate of just 10%, we would replace 6 million tonnes of our annual coal consumption, eliminate 2 million tonnes of GHG emissions and other poisons, and quadruple the Canadian wood pellet industry.

Gordon Murray is executive director of the Wood Pellet Association of Canada. He can be reached at 250-837-8821 or gord@gordonmurray.ca.