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Alberta OKs Another Big Gas-Fueled Power Plant With Little Fanfare

Canada's fossil fuel heartland will stick to its mainstays for its next generation of electricity supplies, a ruling by the Alberta Utilities Commission (AUC) has confirmed.

The AUC brushed aside environmental objections to approve the second jumbo natural gas-fired power station in a long-range lineup to replace the province's aging coal plants. The decision enables Capital Power and Enmax to produce 1,050 MW by installing two gas-burning units beside coal-burning generators at Genesee, about 100 kilometers (60 miles) southwest of the provincial capital of Edmonton.

The partners set a target of 2018-2020 to complete and start up the new hardware. No firm cost estimate has been disclosed yet because equipment selections and engineering design are still under way.

Capital Power and Enmax are currently building an 800 MW, gas-fired station for C$1.7 billion (US$1.5 billion), the Shepard Energy Centre, on a 60-acre lot in a Calgary industrial park.

No public hearings were held on the Genesee project, even though it stood out as the biggest gas-fired power plant proposed yet in Alberta. Under strict provincial legal rules on "standing" rights to object to development, rural landowners and urban eco-critics were unable to show that they were directly affected enough to demand a formal contested proceeding.

Federal intervention on behalf of environmentalists was also ruled out. In Ottawa, the Canadian Environmental Assessment Agency decided a national review was not needed because the new generators will be built on a site where coal-fired units have run for decades.

To date, the Shepard development is Alberta's biggest gas-burning power project. Coal has been the mainstay of the provincial electricity grid for generations. Suitable coal deposits carpet the province as a low-cost fuel source. Until the 1990s, provincial policy rated gas as a limited, premium-value resource and prohibited its use for big, baseload power plants.

Revised views of gas supplies and pricing, combined with Canadian federal and provincial environmental policies that penalize generating stations for carbon emissions, ended the long tradition of reliance on coal. Although the fuel switch is projected to be gradual, the change is also expected to be a strong trend. The change shows clearly in the latest official annual review of provincial fossil fuel supply and use by the Alberta Energy Regulator (AER).

The AER calculates that power stations across the province will burn 1.3 Bcf/d of gas as of 2023, up 65% from the 800 MMcf/d recorded in 2013. The outlook is the same in a longer-range forecast by the Alberta Electric System Operator (AESO), a provincial transmission grid planning and management agency.

The AESO predicts that by 2034, coal-fired power stations will fall from their dominant position of generating 43% of Alberta electricity to 10%, with output shrinking to 2,059 MW from 6,271 MW. Various forms of gas are forecast to take over.

Over the next 20 years, the AESO expects the combined market share of hydroelectric, wind and other alternative generation to grow only marginally, to 18% of Alberta power supplies from their current 16%.

Dam sites are scarce within reasonable transmission line distances from the province's population centers, as are suitable locations for wind farms. Except for brief summers, the province has long nights and short daylight hours that naturally limit solar power.

In Alberta the switch to gas, while not legislated in any way aside from indirect encouragement by tightening power station emission standards, is semi-official. Both partners in the Genesee and Shepard projects have pedigrees as public and civic agencies. Enmax is owned by the City of Calgary, as a power distribution service that has lately embarked on generation investments. Capital Power is a hybrid of private investor ownership and Enmax's Edmonton city-owned counterpart, Epcor.

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