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Canada

Canada

Landmark emissions trade for wind -- Government pays up

Canada's Greenhouse Gas Emission Reduction Trading (GERT) program has registered the country's first emission trade involving a wind energy project. The trade, between a Calgary-based electric utility and the federal government, demonstrates the "significant value" of wind energy in producing tradable emissions reductions, says Fred Gallagher, managing director of Vision Quest Windelectric.

Market developing

"This is also a landmark step in affirming that there is a developing market for trading in emissions reductions, particularly ones that are transparent, tangible and well-documented."

Two 600 kW wind turbines, owned by Vision Quest, produce electricity and generate emission reduction credits by displacing fossil fuel-based electricity on the province's coal dominated grid. Both the wind generated electricity and emission reduction credits are bought by Enmax, Calgary's city owned distribution utility. It sells the electricity to customers and the credits to Environment Canada and Natural Resources Canada.

The two government departments have ten year purchase agreements with Enmax, deals that together are expected to reduce greenhouse gas emissions by about 2,700 tonnes a year. Neither Enmax nor the federal government have disclosed the price they are paying for the reductions.

Launched in June 1998, GERT is a pilot program designed to allow industry and government to experiment with emissions reduction trading by working with actual trades. It reviews both bilateral trades and offers to sell, documenting the actual emissions reductions using site or project specific baselines (Windpower Monthly, February 2000).

Canada's environment minister calls domestic emissions trading "a potentially powerful option" for meeting the country's climate change goals. Over the next decade, says Leslie Welsh, Environment Canada's head of sustainable energy, it could grow to encompass 40% of Canada's economy.

Milestone deal

Trades like Enmax's, which Welsh calls "a milestone for promoting green power, "will help pave the way. "We are basically creating a new currency here, a new commodity that has currency-like characteristics, and we have to make sure the currency is well founded, and the denominations are correct. It's very important we get that right," he says.

Thirteen power projects are currently being evaluated by GERT, including those involving small hydro generation, fuel switching, landfill gas utilisation and reforestation. The pilot is a collaborative effort between a number of provincial and federal government agencies, industry associations, environmental organisations and other non-governmental agencies.

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