TransAlta Speeds Up Coal Retirements in Favour of ‘Second-Best’ Gas Burners

Alberta’s biggest electrical utility has announced it will speed up the retirement of its fleet of coal-fired power stations.

“It’s official,” DeSmog Canada declared in response. “Coal just became uneconomic in Canada.”

Calgary-based TransAlta said it will convert six of eight coal-fired generating stations to gas by 2023, seven years ahead of a provincial deadline to phase out all coal-fired power generation in the province. The conversions, at an estimated cost of C$300 million, will cut the carbon footprint of TransAlta’s production from those facilities by up to 40%. Two more plants will be taken offline and mothballed at the end of 2017.

The motive for the closure of TransAlta’s Sundance Units 1 and 2 was economic, not climate-related. The plant’s output had been profitably committed to pipeline company TransCanada Corporation under a long-term power purchase agreement, but that deal expires on December 31, 2017. At that point, “the company will be completely exposed to market prices” for the plants’ output, DeSmog writes, “which will make them uneconomical.”

TransAlta conceded that one reason to shutter the Sundance plants was the oversupply of Alberta’s power market. By converting its other plants from coal to gas, meanwhile, the company hoped to extend their “useful life” well beyond 2030.

But the planned conversions will provide less climate benefit than they might.

TransAlta plans to convert its coal plants only to single-cycle, or what DeSmog called “’dirty gas’ plant[s], with an emissions intensity of between 600 and 700 kilograms of carbon dioxide equivalent per megawatt hour.” By contrast, more expensive combined-cycle technology might have slashed the plants’ emissions to 375 to 400 kilograms. As coal plants, the stations generate around 1,000 kilograms per MWh.

TransAlta’s choice of second-best technology means its plants will be “less efficient [than they might be], the marginal cost is going to be higher, and every unit of power produced has more emissions,” said University of Calgary doctoral student and energy economist Blake Shaffer. Nonetheless, “it’s still a benefit compared to coal.”