This consultation was open from:
October 13, 2020
to November 27, 2020
Decision summary
We have amended regulations made under the Environmental Protection Act and the Environmental Assessment Act to streamline permissions for combined heat and power (CHP) systems or power only systems. These amendments will align approval requirements with the level of risk, while still ensure environmental protections are in place.
Decision details
Ontario is helping more communities and businesses benefit from combined heat and power (CHP) technologies that use natural gas or wood biomass as fuel, by exempting these low impact CHP systems from requiring an environmental approval.
Combined heat and power systems are an energy efficient technology that can be stand-alone or connected to the transmission grid and used in a variety of small and large buildings like condos and manufacturing plants.
Streamlining approval, and better aligning the required level of approval with the level of environmental impact, will help communities access these energy-efficient technologies faster and with less cost, while ensuring that the environment is protected.
As of July 1, 2021, the new levels of approval for combined heat and power systems that use natural gas combustion turbines or wood biomass as fuel include:
- low-impact, less complex CHP systems (e.g. in a community centre), that meet specific criteria would be exempt from requiring an environmental approval
- medium-sized systems (e.g. in a university or small industrial facility), will be required to register on the Environmental Activity and Sector Registry (EASR); once a project is registered on the EASR, facilities can operate immediately
- large, complex CHP systems (e.g. energy production facilities) will require a conventional environmental compliance approval
As a result of these changes, most small and medium-sized high efficiency CHP systems that use natural gas combustion turbines or wood biomass as fuel will be exempt from an environmental assessment, such as a high efficiency CHP system installed in a community centre, small industrial facility or hospital.
Large and low efficiency CHP systems that use natural gas combustion turbines or wood biomass as fuel will benefit from a streamlined environmental assessment process under O. Reg. 116/01 (Electricity Projects) or O. Reg. 101/07 (Waste Management Projects) depending on the primary purpose of the project, size and the amount of biomass used at the site. For example, a CHP system installed in a large energy production facility, or large industrial facility will be required to complete a streamlined environmental assessment process before it can proceed.
Effects of consultation
The ministry considered all comments received during the comment period. Stakeholders supported the ministry’s proposal to enable quicker adoption of CHP systems. Also, stakeholders supported the risk-based approach that reduces burden for clients seeking to install these systems, while still ensuring human health and the environment are protected.
Below is an overview of the comments that we received and considered.
1.Exemptions for low-risk micro-system
We received comments that both CHPs that use natural gas combustion turbines and those using wood biomass as fuel, continue to be exempt under Section 9 of the Environmental Protection Act and the requirement to obtain a Renewable Energy approval. This amendment will continue to not impact farm-based CHP system approvals.
Natural gas
Comments were received to increase the exemption threshold from 500 kW to 1 MW. The ministry conducted a technical analysis and determined that a 500 kW threshold is appropriate and necessary to address potential noise impacts.
We also received comments that CARB certified equipment must be installed in California. As CARB certified equipment was a proposed regulatory requirement, the ministry contacted the California Air Resources Board and confirmed it does not need to be installed in California.
Comments were received suggesting that CHPs that qualify for an exemption at facilities with existing environmental compliance approvals should not require environmental compliance approval amendments and instead have a “note to file”. In response, the ministry is considering updates to the Air Emissions EASR Guide and will otherwise use the current regulatory approach already in use for facilities that have both an environmental compliance approval for non-exempt systems as well as an exempt system at the same site.
Wood biomass
We received comments to eliminate the 50 kW lower output threshold, or micro exemption for EN303-5 certified equipment (i.e. European certified equipment). Currently wood fired combustors are exempt from approval if they are Canadian Standards Association certified and meet other requirements. The ministry has expanded the micro exemption category to include European certification.
Requests were submitted to expand the proposed micro exemption by increasing the electric power limit from the proposed 5 kW to 20 kW or eliminate the electric power limit. Based on a technical analysis, we decided to cap the electric power limit at 20 kW to ensure air emissions are low-risk and appropriate for an exemption.
We also received comments that supported the use of wood pellet certified fuels (i.e. International Standards Organization certified) for the 50 kW to 150 kW exemption.
Also, we received comments that the exemption should not apply to wood gasifier CHPs and the ministry supports this comment. The exemption amendment will not apply to wood gasifier CHPs.
2. Air Emissions Environmental Activity and Sector Registry (EASR) registration for lower-risk small systems
Natural gas
We received comments that support performance assessments every two years. Comments were also received to remove these assessments from EASR and instead require a performance test during major servicing and an installation test. The ministry considered this proposal but decided to continue with biannual assessments.
Supportive comments were received about consistent rules between EASRs and environmental compliance approvals as it relates to Guideline A-5 (see linked proposal below).
3. Other comments
We received additional comments that were outside the scope of the proposal but the ministry may consider in the context of other proposals. For example, we received comments that the proposal should be expanded to include landfill gas.
We also received comments that were out of scope, related to:
- creating an incentive program to increase efficiency for natural gas equipment currently in use
- the ministry’s notification, complaint, audit and inspection process
- that exemptions should be created for CHPs that use reciprocating engines
- cumulative effects and sensitive land uses
- support for streamlining the use of biomass and processed fuel pellets derived from waste as a coal replacement
As we move closer to the regulatory effective date of July 1, 2021, the ministry will be engaging with stakeholders through letters and other engagement opportunities that arise, such as presentations at association meetings.
In the proposal posting, there was a Regulatory Impact Statement and no comments were received.
Supporting materials
Related linksClick to Expand Accordion
- Regulation Re: Registrations Under Part II.2 of the Act - Activities Requiring …
- Regulation Re: Environmental Compliance Approvals - Exemptions from Section 9 o…
- Regulation Re: Renewable Energy Approvals Under Part V.0.1 of the Act
- Regulation Re: Electricity Projects
- Regulation Re: Waste Management Projects
- Environmental Activity and Sector Registry - limits and other requirements for …
- Environmental Permissions
- Environmental Compliance Approval
- Environmental Activity and Sector Registry
View materials in person
Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.
Get in touch with the office listed below to find out if materials are available.
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Contact
Julie Green
Original proposal
Proposal details
Technologies such as natural gas combustion turbines, used for power, or wood-fired combustors, used for heat in connection with a building's comfort heating system for comfort heating, may be coupled with a secondary device to create a combined heat and power (CHP) system.
CHP systems are an energy efficient technology that: generates power and captures the excess heat to provide space heating or steam. Compared to conventional and heat production, CHP systems offer benefits, including:
- better efficiency by utilizing the heat that would otherwise be wasted
- better reliability and resiliency to combat the possible impacts from weather-related emergencies
- use of wood biomass as fuel can help reduce fossil fuel consumption in parts of rural or Northern Ontario where access to natural gas is limited
CHP systems can be used in a variety of facilities, including:
- residential or municipal buildings (e.g., condominiums or community centres)
- institutional or commercial buildings (e.g., hospitals or hotels)
- manufacturing operations (e.g., food processing)
Currently, permissions for these combustion turbines and wood-fired combustors are often subject to different regulatory requirements even though the level of risk to the environment and human health are similar to comparable technologies. This creates an unlevel playing field for clients seeking to install these systems. The proposed regulation amendments would ensure these systems that are fueled by natural gas or wood biomass and have similar environmental and human health impacts are subject to similar or the same regulatory requirements. The proposal introduces a more uniform risk-based approach that aligns approval requirements with the level of risk and ensures human health and the environment are protected.
Proposed amendments to regulations made under the Environmental Protection Act
1. Exemptions for Low-Risk Micro-System
We are proposing to amend Ontario Regulation (O. Reg.) 524/98 - Environmental Compliance Approvals (ECA) - Exemptions from Section 9 of the Act (O. Reg. 524/98) that would be made under the Environmental Protection Act (EPA) to include new exemptions to ECA requirements for micro-systems in relation to air emissions.
- Natural Gas: CHP or power only systems under 500 kW and certified by the California Air Resources Board; meets applicable noise requirements (i.e., requirements to have the equipment indoors or meet equipment-based noise limits): and uses natural gas only
- Wood Biomass: CHP or wood-fired combustors between 50 kW and up to 150 kW; wood fuel meets specified Canadian Standards Association requirements; and the equipment meets specified European Committee for Standardization requirements
Qualified low-impact and less complex micro-systems that meet criteria would be exempt for section 9 of the EPA and would therefore not require an ECA or a Renewable Energy Approval (REA). The ministry can still inspect facilities and ensure compliance with legal requirements.
See attached proposed amendments to O. Reg. 524/98 (ECA - Exemptions from Section 9 of the Act) for further details.
2. Air Emissions Environmental Activity and Sector Registry (EASR) Registration for Lower-Risk Small Systems
We are proposing to amend O. Reg. 1/17 (Registrations under Part II.2 of the Act - Activities Requiring Assessment of Air Emissions) to require small systems that meet the specified criteria to register in the online EASR, instead of obtaining an ECA:
- Natural Gas: CHP or power only systems under 25 megawatts (MW) that do not qualify for an exemption from section 9 of the EPA, and that use natural gas. Operators of combustion turbines must meet specified operating requirements in O. Reg. 1/17, including in relation to any noise and air emissions from the system.
- Wood Biomass: CHP systems under 3 MW that do not qualify for an exemption from section 9 of the EPA European certified; and use certain types of wood that meet CSA-ISO requirements. Operators of such CHP systems must meet specified operating requirements in O. Reg. 1/17, including in relation to any noise and air emissions from the system.
CHP systems would be required to complete assessments (e.g., air, noise) approved by a licensed engineering practitioner to ensure that their facilities meet operating requirements. Once registered, facilities can operate immediately if criteria are met. The ministry can still inspect facilities and ensure compliance with legal requirements (e.g., require CHP systems to validate air emissions by conducting source testing) and efficiency by conducting thermal efficiency testing).
See attached proposed amendments for O. Reg. 1/17 (Registrations under Part II.2 of the Act - Activities Requiring Assessment of Air Emissions) for further details.
Also, the Environmental Activity and Sector Registry - Limits and Other Requirements (EASR Publication) is a supporting document, incorporated by reference in O. Reg. 1/17, that facilities must comply with if they are required to register under the Air Emissions EASR regulation.
To support this new EASR category, we are proposing updates to the EASR publication including new air emission limits for NOx (based on Guideline A-5 - Atmospheric Emissions from Stationary Combustion Turbines) and operating requirements for small CHP systems, including power-only systems that use natural gas combustion turbines. Existing requirements in the EASR publication would apply to small WFC regardless if they are heat only or CHP systems. Emission limits for these systems would be added to Chapter 1 of the EASR Publication and new chapter, Chapter 6, is proposed to reflect new operating requirements for natural gas combustion turbines.
See attached proposed amendments to the EASR publication for further details. For proposed updates to Guideline A-5, please go to Guideline A-5 posting. A link to the posting can be found in the 'Related links" section below.
Systems that do not qualify for an exemption or EASR registration would be required to obtain an ECA.
Also, we are proposing that facilities currently holding ECAs for CHP systems would continue to operate under the conditions of those ECAs until the ECA expires on January 31, 2027. Once the ECA expires, a revised approval under the current framework at that time would be required.
3. Proposed amendments to regulations related to REAs made under the EPA, and to regulations made under the Environmental Assessment Act (EAA) for wood biomass
We are proposing to amend O. Reg. 359/09 (Renewable Energy Approvals Under Part V.0.1. of the Act) so that CHP systems that use specified wood fuels would no longer be required to obtain a REA and instead would (i) be exempt form the requirement to obtain an ECA; (ii) be required to register in the online EASR; or (iii) be required to obtain an ECA.
Also, we are proposing to amend O. Reg. 116/01 (Electricity Projects) and O. Reg. 101/07 (Waste Management Projects) made under the EAA, which will streamline environmental assessment requirements for large, high efficiency wood biomass CHP systems. Currently, environmental assessment requirements are integrated into the REA approval. Proposed amendments would introduce streamlined environmental assessment requirements under O. Reg. 116/01 and O. Reg. 101/07 depending on the primary purpose of the project, size and the amount of biomass used at the site.
Also, we are proposing that facilities currently holding REAs would continue to operate under the conditions of these REAs until the REA expires. Once the REA expires, a revised approval under the current framework at that time would be required.
See attached proposed amendments to O. Reg. 359/09 (REA Approvals Under Part V.0.1. of the Act) that would be made under the EPA; and O. Reg. 116/01 (Electricity Projects) and O. Reg. 101/07 (Waste Management Projects) that would be made under the EAA.
4. Summary of Proposed Permissions Framework
The proposed permissions framework for these CHP systems is summarized in Table 1 (natural gas turbines) and Table 2 (wood biomass combustors/facilities) below.
We encourage interested parties to make comments on the proposal including the attached documents, which provide greater detail on the proposed regulatory amendment. We will consider all comments submitted to this posting prior to finalizing the regulations.
Table 1: Natural Gas Turbine CHP System Permissions Proposal
Permission/ Requirement Categories |
Exemption for Low-Risk Micro-Systems |
EASR Registration for Lower-Risk Small Systems |
ECA for Higher-Risk Large Systems |
Size and Unit |
Under 500 kilowatts (kW) total power rating; California Air Resources Board certified |
Total power generation under 25 MW per facility |
Total power generation 25 megawatts or more per facility |
Noise |
Equipment-based noise emission limits; or requirements to have the equipment indoors |
No proposed changes to screening/assessment process |
No proposed changes to screening/assessment process |
Air Emission Testing |
Not required |
Requirement to monitor performance for emissions and efficiency (to align with new proposed Guideline A-5) |
Updated streamlined proposed Guideline A-5 requirements |
Fuel Type |
Natural gas |
Natural gas that meets specified criteria |
Gaseous and liquid fuels |
Examples |
Condos, community centres |
Small industrial facilities, hospitals, universities |
Energy production facilities, large industrial facilities |
Table 2: Wood Biomass CHP System Permissions Proposal
Permission/ Requirement Categories |
Expand Existing Exemption |
Create New Exemption |
EASR Registration |
ECA |
Size |
Adding up to 5 kW of power to current exemption of 50 kW for heat |
50 kW up to 150 kW for heat and any amount of electric power |
50 kW to 3 MW for heat/any amount of electric power |
CHP systems that don’t qualify for exemption or EASR. Eliminate REA and streamline environmental assessment requirements. |
Unit |
Canadian Standards Association certified |
European certified |
European certified |
No certification required |
Other Requirements |
Wood pellets, wood chips, wood briquettes or untreated firewood |
CSA-ISO graded wood pellets |
CSA-ISO graded wood pellets, wood chips or wood briquettes |
Qualified wood only |
Examples |
Average Ontarian’s home |
Resorts and spas, conference centres, schools |
Hospitals, colleges, small industrial facilities, district energy production facilities |
Hospitals, colleges, small industrial facilities, district energy production facilities |
Regulatory impact statement
In addition to the objectives and benefits of the proposal mentioned above, the proposed regulatory amendments are expect to, if approved, save time and costs for proponents choosing to install such systems. While results may vary depending on the proponent, planning and design of CHP systems, it is estimated that proponents could potentially benefit from:
- a potential one-time application fee savings of up to approximately $20,000 for a natural gas combustion turbine CHP
- a potential savings of approximately up to $250,000 or more for a wood biomass fuel CHP project depending on the project's complexity and whether an exemption, EASR or an ECA is required
Also, streamlining permissions for systems could create additional economic opportunities for Ontario's CHP manufacturers and technical experts.
For CHP systems that use wood biomass, this initiative could also enhance the Ontario-based market for wood biomass leading to jobs, investment and manufacturing opportunities in Ontario's forestry sector. For example, pulp and paper mills could gain new customers for wood pellets leading to jobs and economic development.
These benefits may be achieved in addition to mitigating impacts to that environment if the systems are operated in accordance with regulatory requirements. The regulatory requirements in the proposal are intended to mitigate air, noise and odour impacts from all sources of contaminants from CHP systems described above.
Supporting materials
View materials in person
Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.
Get in touch with the office listed below to find out if materials are available.
Comment
Commenting is now closed.
This consultation was open from October 13, 2020
to November 27, 2020
Comments received
Through the registry
12By email
2By mail
0