1. Environmental Challenges and Opportunities of the Evolving North American Electricity Market Presentation for UNFCCC Workshop on Cleaner GHG Emitting Energy 8 May 2002

2. 2 The Electricity Sector Now - Generation Total: 4,700 TWh

3. 3 The Electricity Sector Now - Emissions

4. 4 Where are we going? North American electricity demand is expected to increase to 2010: –14% in Canada –21% in US –66% in Mexico

5. 5 Possible Air Implications Possible new emissions in 2007 pose challenge in meeting environmental and health objectives in North America* »Canada: Hg (0 to 11%); CO 2 (3 to 15%), SO 2 (-1 to 0%), NOx (4 to 14%) »Mexico: Hg (19 to 24%); CO 2 (29 to 53%), SO 2 (2 to 2%), NOx (40 to 63%) »US: Hg (3 to 15%), CO 2 (14 to 38%), SO 2 (-1 to 1%), NOx (3 to 8%) *(%) = new emissions relative to 1998-2000 electricity sector emissions (varies by pollutant)

6. 6 North American Integration – Effects on Trade Three scenarios: 1.The extent of trade increases with similar distribution of generation –Interregional trade increases (models for EMF #17 estimates inter NERC trade to increase to 4-6% of total generation) –Transboundary trade (DOE estimates 35% increase in total electricity trade by 2007)

7. 7 North American Integration – Effects on Trade 2. Increased trade from changes in distribution of generation (construction of capacity to serve foreign markets e.g. Baja California) 3. A combination of 1 and 2 4.Status Quo Each has different environmental implications.

8. 8 Green Electricity – Current Status and Potential Estimates of potential vary: small increase over current production An increase to 10% within 10 years 50% of energy needs by 2050

9. 9 Promising Policies for Expansion ‘Clean’ Electricity Tradable Renewable Energy Certificates (TRECs) Renewable Portfolio Standards

10. 10 Challenges Facing TRECs, RPSs Quantification of effects of their implementation Definitional Issues: what is clean energy? –Different jurisdictions have different definitions of what is ‘clean’ and ‘renewable’ –Different organizations have different definitions (e.g. Green-E and EnviromentalChoice)

11. 11 Working on these Challenges Possible calcuation of emissions displacement CEC Electricity and Environment database www.cec.org/electricity Online keyword searchable database Designed to be clearinghouse for information on energy efficiency or “green” energy schemes and legislation Its purpose is to increase transparency and comparability of criteria

12. 12 Electricity Database Example - RPS  22 states - database includes records on states that have passed or proposed RPS legislation  22 different eligibility criteria (e.g. wind, <80 MW) with 16 forms of generation identified  all states’ RPS legislation include solar, biomass and wind

13. 13 Electricity Database Example - RPS  Most allow for some hydro, geothermal and landfill gas  Fewer than half allow for new hydro, fuel cells, municipal solid waste, tidal, digester gas  Tire waste, fuel cells and cogeneration are allowed for in only one RPS