Canada has had natural gas in both the east and west since gas started to flow from Alberta to Ontario and Québec in the TransCanada pipeline in 1957. Gas prices are rising – in August 2002 the spot price for pipeline gas to Ontario was CAN$3.04/GJ (US$2.53/GJ). In August 2003 it was CAN$6.15/GJ (US$5.12/GJ) and it remains close to this level.


Nova Scotia Power remains a vertically integrated monopoly in the province of Nova Scotia. Most generation is with low-sulphur coal, although some oil is also used. The coal-fired plants are ‘grandfathered’, having been built before scrubbers were required. The electricity cost is relatively low. Natural gas has recently become available from the Sable Island offshore source, and ground has been broken for an LNG import terminal.

Natural gas cogeneration is likely to become viable in the future as additional increments of firm power are required. The province recently adopted a policy whereby if the Public Utilities Board deems a cogeneration system, proposed by an independent power producer (IPP) or steam user, to be superior to an increment of generation planned by Nova Scotia Power, then the utility must buy from the cogenerator.

Paper mills using recycled paper are ideal candidates for cogeneration

Kimberly Clark has a 28 MW steam turbine cogeneration system in its Nova Scotia kraft pulp mill. It uses the utility for stand-by supplies and frequency stabilization. Fuels are pulping liquor, wood residues and some heavy fuel oil. There is an IPP-owned cogeneration system using a fluidized bed to burn wood residue and selling steam to a newsprint mill. Here, the power is sold to the utility at a premium price while the mill buys from the utility at a lower price. Nova Scotia Power seems reluctant to enter into other such contacts.

The Bear Head (Point Tupper) LNG terminal will be a short distance from a 150 MW coal-fired power plant and a pulp and paper mill with biomass cogeneration. The plan is to use condensing water from the coal-fired power plant or the paper mill to vaporize the LNG, creating a cogeneration system. Also interesting is the paper mill’s use of a thermo-mechanical pulping system which generates all the steam required for drying the paper most of the time. This reduces the scope for cogeneration.


The province has separated generation from transmission and has an independent system operator. There are a number of biomass cogeneration systems owned by pulp and paper mills. Sable Island natural gas has recently become available in southern New Brunswick, but a large fraction of the province depends on heavy fuel oil to supplement biomass for cogeneration.

The EU’s carbon dioxide emission trading scheme (EU-ETS) opened for business at the beginning of January

The EU’s carbon dioxide emission trading scheme (EU-ETS) opened for business at the beginning of January, but with several of its 25 Member States not participating. National emission allowance allocation plans (NAPs) for at least five countries – Greece, Italy, Poland, the UK and the Czech Republic – did not receive Commission approval before the scheme went live. Five NAPs, for Spain, Hungary, Lithuania, Cyprus and Malta, were given the green light on 22 December, after 15 had previously been approved.

Once fully operational, the scheme could prove to be a very important milestone in EU environmental policy. Under it, some 12,000 industrial installations, accounting for half of European carbon dioxide output, will have their releases capped.

The first phase, now underway, runs from 2005-07. A second phase, to run from 2008 to 2012, is thought likely to involve stricter emission caps for market participants and could be expanded to cover new industrial sectors such as chemicals, aluminium and, possibly, aviation.