September 15, 2022 Maryanna…

September 15, 2022

Maryanna Lewyckyj
(647) 241-8224
Maryanna.Lewyckyj@ontario.ca

Re: ERO number 019-5816 – Development of a Clean Energy Credit Registry

Thank you for the opportunity to comment on ERO number 019-5816 – Development of a Clean Energy Credit Registry. The following comments on the proposed registry and need for supporting regulatory processes are prepared by Region of Peel (the Region) employees for consideration by the Ministry of Energy.

Additionality and Environmental Integrity

The use of the wording “all non-emitting fuel sources” along with authorizing the Independent Electricity System Operator (IESO) and Ontario Power Generation (OPG) to make their CECs available suggests that existing energy generators would qualify for this program. Including baseload nuclear energy or other non-additional energy sources in the CEC market will flood the market and devalue other credible credits coming from new assets which are additional, arguably doing more harm than good for the expansion of the renewable market. How will the Province ensure that the development of a voluntary CEC market will drive the needed expansion of additional renewable energy?

To ensure the environmental integrity of CECs, there should be some requirement through the registry that they are certified or eligible for certification through a reputable program (e.g. Green-e, Ecologo). This will provide transparency and verify the entire chain of custody of energy from generation to retirement to ensure purchasers have the sole title and are getting what they paid for.

Furthermore, concerns have been raised by experts about renewable or clean energy credits (RECs or CECs) and how they may weaken the integrity of science-based targets by allowing organizations to report them as progress towards meeting their climate mitigation targets, which can lead to an inflated estimate of the effectiveness of mitigation efforts. As such, it’s important to educate potential buyers that a REC or CEC only serves as a record that a unit amount of electricity was generated from a qualified energy source and does not reduce their actual emissions or shrink their specific organization’s carbon footprint. Purchasing electricity credits from generators that are already existing will not add to the solutions that are needed and is only a part of the journey to net-zero emissions. Therefore, there should be a focus on educating buyers on the value of purchasing credits from new assets and on the other options to reduce their emissions, including by undertaking efforts to directly reduce their emissions through greenhouse gas (GHG) mitigation projects, like energy efficiency upgrades, fuel switching and renewable energy generation.

Transitioning Away from Natural-Gas Generation

The Region has a 2030 emissions reduction target of 45% below 2010 levels and a longer term 2050 target that aligns with net zero ambitions. Reaching the Region’s climate change mitigation outcome requires a significant switch from fossil fuel energy to clean electricity. This switch involves producing more clean electricity, using clean electricity to power more homes, vehicles, businesses, and industries and phasing out GHG-emitting generators – a position that has been adopted by Regional Council.

The switch to clean electricity generation means producing more to replace natural gas-fired electricity as it is phased out and to meet the growing need for clean electricity as residents switch from gasoline-powered vehicles and household items and equipment to electric ones. How will the introduction of a CEC Registry safeguard the urgent need for sustainable solutions for grid mix and capacity that will necessarily include renewable energy expansion and the phase out of natural gas generation to meet Ontario’s clean electricity supply needs?

Environmental Attributes

The Region understands that the proposed regulation would see the IESO and OPG make their CECs available to purchase on the registry. If CECs can be purchased for electricity generated historically, and therefore is not additional, then this would negatively affect the accounting of GHG emissions associated with electricity generation for all Ontario organizations, including the Region as the associated environmental attributes would be claimed by the CEC buyers. Recognizing that all ratepayers currently benefit from the relatively low intensity of Ontario’s electricity grid, how will the Province address selling the environmental attributes of CECs while not impacting GHG accounting for municipalities and corporations; and specifically, how will double counting, where two or more parties claim the same emissions reduction, can be avoided?

Additionally, the sale of environmental attributes raises questions around equity and equality, as it would mean that those with greater resources could purchase CECs at the cost of the low carbon intensity of the electricity grid which currently benefits all ratepayers. This would present a disadvantage for those who cannot afford to purchase CECs. How will the Province ensure that an equity and equality are lens applied to the proposed registry and supporting legislation?

Lastly, the Region has advocated for sustained funding to reduce GHG emissions and address climate change risks to critical municipal infrastructure, including funding for innovative and pilot technologies.
The Province should specify how the funding from the sale of CECs will be used and clarify if it will support Ontario’s climate change goals and municipalities who are at the forefront of the response to the climate crisis.

Conclusion

Thank you for the opportunity to provide comments on the Ministry’s proposed CEC registry and supporting processes. Please contact the Region with any questions or comments.

Sincerely,
Christine Tu
Director, Office of Climate Change and Energy Management
Region of Peel
christine.tu@peelregion.ca