ATCO speeds up timeline on conversion to gas
Move to gasification of electrical plants ‘makes sense’ now, CEO of producer says
CALGARY Alberta could realize its goal of phasing out coal-fired electricity years ahead of schedule as ATCO Ltd. announced Wednesday it planned to transition its power plants to burn natural gas by 2020.
“We’re actually looking at greening them by 2020, not 2030,” ATCO president and CEO Nancy Southern said Wednesday of the company’s coal-fired power plants and the NDP government’s 2030 deadline to phase them out.
“Our belief is that it makes sense to move to gasification of those coal plants now,” she said.
ATCO operates the Battle River and Sheerness coal-fired generating stations in the province, which produce a combined 1,469 megawatts of electricity.
The company would be among the first in the province to convert its coal plants.
Calgary-based electricity producer TransAlta Corp. announced this week it would save $1.5 billion by converting its wholly owned coal-fired generating stations to natural gas by 2022. TransAlta’s transition alone would result in a 10-per-cent increase in natural gas use in Alberta.
ATCO and TransAlta are the two largest coal-fired power producers in the province and both companies have said the availability of cheap natural gas in Western Canada made the coal conversions financially feasible.
If both companies transition away from coal as planned, only Edmonton-based Capital Power would operate coal-fired generating stations after 2022. TransAlta, however, does own a stake in one of those Capital Power-operated stations.
Capital Power has previously said it was studying regulations on converting its coal fleet before making a decision but the company did not immediately respond to a request for comment Wednesday.
“Today we have an oversupplied gas market here in the West due to a lack of demand and the inability to get the gas to markets in the East,” TransAlta president and CEO Dawn Farrell told reporters at the company’s annual meeting Monday.
Coal-fired power plants also emit roughly twice as much carbon as gas-fired plants, so converting them to the lower-emitting source will allow both companies to reduce their amount they would pay in carbon taxes, which are projected to hit $50 per tonne in 2022.
ATCO chief strategy officer Siegfried Kiefer said his company’s conversion plans are motivated by the expiry of power-purchase contracts in 2020, not carbon taxes.
Kiefer said ATCO would spend money over the next two-anda-half years on the conversions, taking the plans off-line for six months at a time, so the plants burn natural gas by the time their contracts expire.
“At today’s gas prices, it’s very competitive with coal and much lower-emitting and we see it as a really neat way to transition off coal and still keep the reliability and flexibility that comes with big generating units to back up wind and solar as they come on and off the system,” Kiefer said.
Southern also said the company planned to add more renewable power generation to its portfolio as Alberta’s NDP government has set a target of 30-per-cent renewable generation by 2030.
“If Alberta is to be 30-per-cent renewable or green in the next 12 years, I would make the assumption that 30 per cent of our generation would look like it’s renewable and green,” Southern said, adding that ATCO planned to make the transition “faster than any of our competitors.”
The company has touted hydroelectricity as a way to transition away from coal, and has previously said it is working on a major hydro proposal without providing details.