Thank you, Mr. Chairman and honourable committee members.
EPCOR commends the efforts of this committee to develop effective environmental legislation addressing greenhouse gases and other emissions. It's clear that the results of your efforts here will have great significance for the future of Canada and the Canadian electrical industry.
For those who are not familiar with EPCOR, I'll just briefly introduce our company. EPCOR Utilities Inc. builds, owns, and operates power plants, electrical transmission distribution networks, water and waste water treatment facilities, and infrastructure in Canada and now in the United States.
Our Canadian operations include facilities in British Columbia, Ontario, and Alberta. EPCOR's generation fleet includes power generation from wind, biomass, run-of-river, small hydro, recycled energy, gas, and coal. EPCOR has been named one of Canada's top 100 employers for seven consecutive years, and it is headquartered in Edmonton, Alberta.
The EPCOR Power LP has the largest market capitalization in its sector and owns plants across Canada and the United States. EPCOR owns 31% of the LP and is the manager of its operations.
In 2000, EPCOR Utilities Inc. and a number of other Canadian companies formed what we refer to as the Canadian Clean Power Coalition, or CCPC. The CCPC was formed to investigate technological developments that could lead to significant reductions in greenhouse gas and other air emissions from the continued use of coal for power generation.
Today we wish to discuss our company's perspectives on the implications of Bill C-30 and the challenges and opportunities for managing air emissions from the electrical industry within Canada. Further, we would like to update you on the progress that the Canadian Clean Power Coalition has made on the development and deployment of new technology. EPCOR strongly believes that a rational regulatory framework has the potential to deliver major reductions in Canada's emissions profile over the long term.
While we are discussing emissions at the national level, electrical generation is regulated by the provincial governments and in some cases owned by those same governments. Not surprisingly, the dominant fuel types used to generate electricity vary quite broadly across the country, largely due to geography and resource availability. For example, Alberta, Saskatchewan, and the Maritimes depend heavily on coal-fired generation. Those regions lack significant hydro opportunities. Alberta in particular has a more than 1,000-year supply of low-sulphur sub-bituminous coal reserves. British Columbia, Quebec, and Manitoba have been blessed with an abundance of hydro, again based on their specific geographies. Ontario has benefited from a diverse fuel mix, including a significant share from nuclear.
Canada's electricity generators are individually and collectively capable of delivering substantial emissions reductions in line with those envisioned by the act and this committee. But the reality is that the reductions will take place in stages over decades, rather than over a few months or years. As you've heard from other presenters to this committee, our industry is highly capital-intensive, with large facilities and significant life spans. In addition, facilities have little ability to switch fuels without complete renewal of the capital asset in place.
In the late 1960s and 1970s, Canada experienced a significant build of power generation that now forms a significant portion of the generation across the country. Much of that generation is fueled by coal and will reach the end of its economic life between now and 2020. As such, the country will require another wave of investment in baseload power generation to replace this aging infrastructure.
EPCOR and others in the industry are strongly advocating an approach that takes advantage of this capital stock turnover and promotes the adoption of what we call best available technology economically achievable, or BATEA, when a plant is retired. Replacing our older power plants with today's best available technology that is economically achievable will lead to a dramatic and immediate reduction in emissions from power generation and is part of the pathway to near-zero-emission power generation. I would never say zero-emission power generation
This approach is already working today. In 2000, EPCOR did an extensive review of the technological developments in coal-fired generation. This review then formed the basis of our technology selection for EPCOR's Genesee Phase 3, or G3, application to the Alberta Energy and Utilities Board. That project was approved in 2001.
G3 employs the best available technology that is economically achievable, and it has been generating 450 megawatts net to the Alberta grid since March 2005. Through the investment of an additional $90 million, EPCOR was able to significantly reduce air emissions from this state-of-the-art facility. In comparison to a number of coal-fired facilities that retired in 2003 and 2004, G3 reduced emissions of NOx and SO2 by 63% and 80% respectively. In addition, G3's supercritical technology resulted in an 18% reduction in greenhouse gas emissions per megawatt hour, compared to the provincial average for coal-fired generation in the province. So there was a significant reduction in GHG emissions. Such technology substitution has great potential to reduce air emissions in Canada.
Let me return to the Canadian Clean Power Coalition. I’m pleased to be serving as the chairman of this coalition as we work toward the deployment of new technology options for coal-fired generation. Integrated gasification combined cycle, or IGCC, is the technology we are pursuing today, particularly in Alberta.
The coalition recently began a 28-month front-end engineering design effort, or FEED, at EPCOR's Genesee site just west of Edmonton. This project is currently being funded by EPCOR and the Alberta Energy Research Institute. At the completion of the FEED study, coalition members will be able to evaluate the opportunity to build an IGCC plant in Alberta. Indeed, this study could accelerate the ability to deploy such technology.
Our hope is that an IGCC plant will allow us to have a relatively pure CO2 stream available for enhanced oil recovery, perhaps in the nearby Pembina oil fields. Such a plant would also improve air quality by dramatically reducing key air emissions. Compared to vintage coal-fired facilities, IGCC technology has the potential to lower emissions of NOx by 96%, particulate matter by 98%, and SO2 by 99%, for significant improvement in air emissions. While this technology is not commercially available at this very moment, we continue to believe it is important for industry and governments to keep investing in its commercialization.
In the context of the Clean Air Act, we believe it is important for government to continue its partnership with industry as we work on technology research and commercialization. It is equally important that the regulatory standards and targets set by government reflect an objective assessment of the best available technology that is economically achievable.
So where do we go now? While there is limited opportunity for companies like ours to make significant changes in the short term, we would support a policy environment that mandated near-term targets, as long as they weren't at the expense of longer-term real reductions. For many generators, the only option to achieve short-term reductions would be through the purchase of reductions from other sectors in the form of offsets. We believe the near-term target should ensure that power generators retain sufficient capital to invest in the commercialization and deployment of new technology like IGCC and carbon capture and storage.
As we mentioned earlier, we support a model for our industry that would require that a plant reaching the end of its economic life be replaced or perform to the same level as the best available technology that is economically achievable of the day. Genesee 3 is a perfect example of how this would work and the potential reductions that could be achieved.
In the short term, EPCOR would support the concept of a technology fund as one compliance mechanism for the electricity sector. You've already heard about this from TransAlta, so I won't spend any time on it, except to agree with TransAlta that this would be an effective way to overcome economic hurdles and accelerate capital stock replacement with new low-emission technologies.
Another compliance mechanism must be a robust domestic offset system and an active national emissions trading regime that allows real and verifiable international credits to be transacted. EPCOR is one of the most active Canadian participants in the offset market. We believe it can result in real and verifiable--third-party verifiable--reductions in greenhouse gas emissions. If it would be helpful, we'd be pleased to provide the committee with information on how we have approached offset trading to meet our Alberta requirements.
With such mechanisms in place, EPCOR could achieve the government's proposed target of a 65% reduction in greenhouse gas levels by 2050. We've already shown with Genesee 3 our ability to reduce NOx, SOx, and greenhouse gas levels significantly.
We are in agreement with TransAlta's estimation of the costs to the sector, so I will not address that further today.
EPCOR has demonstrated its commitment to deployment of new technology and leadership in searching for the next technology leap for our industry. We see tremendous potential for greenhouse gas reductions across the industry in the medium to long term. We are mindful that what could put those reductions at risk is a policy framework that is focused on short-term action in an industry that has a long-term timeframe at play.
We encourage this committee to focus on the medium- to long-term significant reductions that our industry can make. Don't sacrifice the long-term goal for the desire to show immediate action. Targets today must take into account the realities of the different sectors and their respective abilities to make changes in the short, medium, and long term. There is not necessarily one solution that fits all sectors.
Finally, we note that the bill does address provincial and federal equivalency. We applaud this, as it removes an additional source of uncertainty for our industry.
Thanks again for the opportunity to speak to you today. I'd be happy to answer any questions.