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Alberta Opens Gas-Fired Shepard Energy Centre; Turning Away From Coal

Canada's fossil fuel heartland, Alberta, has taken its biggest step yet towards replacing coal with cleaner-burning natural gas as its prime power plant fuel.

After three years in construction on the southeastern fringe of Calgary, as of this week the C$1.4-billion (US$1.1-billion) Shepard Energy Centre is burning about 65 MMcf/d to make 800 MW of electricity.

At the same time, work continues on installing two gas-fired units to make 1,050 MW beside coal-burning generators at Genesee, about 100 kilometers (60 miles) southwest of the provincial capital, Edmonton.

To date, Shepard stands out as 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 defined gas as a premium-value resource in limited supply and prohibited its use for big, base-load power plants. But revised outlooks for gas supplies and prices, combined with Canadian federal and provincial environmental policies that penalize generating stations for carbon emissions, ended the long tradition of reliance on coal.

The fuel switch is expected to be gradual but strong, and 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 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 be dethroned from their dominant position of generating 43% of Alberta electricity to 10%, with output shrinking to 2,059 MW from 6,271 MW. Aging coal plants are gradually reaching the end of their lives, enabling gas to take over in an orderly transformation.

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 and wind power sites are remote, making transmission costs prohibitive. 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. The partners in the Genesee and Shepard projects -- Enmax Corp. and Capital Power -- have century-old pedigrees as 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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