ATCO speeds up time­line on con­ver­sion to gas

Move to gasi­fi­ca­tion of elec­tri­cal plants ‘makes sense’ now, CEO of pro­ducer says

Edmonton Journal - - FRONT PAGE - GE­OF­FREY MOR­GAN gmor­gan@na­tion­al­ Twit­­of­frey­mor­gan

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.


ATCO pres­i­dent and CEO Nancy South­ern, seen af­ter the com­pany’s an­nual gen­eral meet­ing in Cal­gary on Wed­nes­day, an­nounced plans to con­vert ATCO’s power plants to nat­u­ral gas 10 years ahead of sched­ule, and to add more re­new­able power gen­er­a­tion to its...


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