Life in the Fast Lane - Alberta's Gas Power Burn to Expand Significantly Next Year

In many parts of the world, the shift away from coal-fired to natural gas-fired generation and renewables has been gaining momentum in an attempt to curtail the output of carbon dioxide (CO2) and other greenhouse gases. The Canadian province of Alberta kicked off such an initiative in 2016 to eliminate all of its coal-fired power generation sources and replace these with either gas-fired plants, wind farms, or solar by 2030. In the past two years, the province’s major electric utilities and independent power producers (IPPs) have been accelerating these plans, such that the complete phase-out of coal will be accomplished many years in advance of the original deadline. Today, we consider this transition and highlight what should be a pivotal year for Alberta’s use of natural gas in power generation.

The past decade or more has seen an increasing focus on transitioning power generation away from coal use due to the higher carbon content of the exhaust gases associated with coal burning. Whether the replacement for coal-fired power is to be sourced from renewables, nuclear or natural gas, the desire for a lower carbon footprint has become more pronounced in many regions. In Alberta, current plans, which as we said were announced in 2016 and are being fast-tracked by the province’s major electric utilities and IPPs, call for nearly all of the province’s coal plants to be replaced with total gas or dual-fuel plants (coal or gas) by 2023, well in advance of the 2030 deadline.

Alberta is by far the largest coal user among Canada’s provinces. At the start of 2016, Alberta had just under 6,300 megawatts (MW) of coal-fired generation in operation (Figure 1). Although that represented only 38% of the total installed capacity in the province, coal in 2015 was responsible for 50% of all the power generated because most of its coal plants operated around the clock. Of the coal plants that were operating at that time, three (red-shaded rows) have since been retired, as they had come to the end of their originally licensed lifespan (typically 40 to 50 years). Two plants (green-shaded rows) — ATCO’s Battle River #5 and Maxim Power’s H.R. Milner — were fully transitioned to dual-fuel operation or gas-only use by May of this year; H.R. Milner also increased its generating capacity from 144 MW to 208 MW in the process.