Capital Power Corp. said Tuesday it is proceeding with a project to maximize flexibility to use natural gas as fuel at the Genesee Generating Station in Alberta, which primarily had burned coal.
The project involves adding gas pipeline infrastructure within the Genesee site and modifications to the Genesee 1 and 2 boilers. The rated capacity of the units is not expected to change.
“Having the dual-fuel flexibility at Genesee allows us to optimize the fuel mix to maximize economic returns,” said CEO Brian Vaasjo. “The financial impact is highly dependent on carbon cost and natural gas price assumptions and is estimated to increase adjusted funds from operations by approximately $10 million in 2020, and $20 million in 2021.
“Expanding the use of natural gas could also result in significantly lower absolute emissions relative to the current configurations of the units,” Vaasjo added.
The Genesee facility is in Warburg, Alberta and has three units with 860 MW of combined capacity from units 1 and 2, and 516 MW of capacity from the third unit. Unit 3 is co-owned with TransAlta Corp.
The total cost of the project to completely transform Genesee 1 and 2 to dual-fuel capability and up to 40% gas capability for Genesee 3 is estimated at C$50 million with expenditures of C$18 million, C$19 million and C$13 million from 2019 to 2021, respectively.
Following the transformation of the units to 100% dual-fuel capability, they can utilize up to 100% natural gas or coal, or a mix of the two. The utility says that the amount of coal burned at any given time, versus natural gas, is driven by several factors including natural gas prices, carbon costs, and coal costs.
Based on Genesee 1 and 2 at 100% dual-fuel capability, and Genesee 3 at 40% natural gas capability, the utility projects annual greenhouse gas emissions (GHGs) are expected to be reduced by around 20% to 33%. This assumption is based on operation of the units being between 50% to 100% of hours on natural gas compared to solely coal. This could increase annual natural gas demand in Alberta by 45 million GJ to 85 million GJ.
Under the Genesee Performance Standard program, which began in 2016, a 10% improvement in efficiency and performance of the units is targeted by 2021, which could benefit either natural gas or coal operations.
Alberta’s climate change policy, announced in late 2015, is giving Capital Power until December 2029 to phase out coal. The Genesee facility is expected to continue as a 100% natural gas-fired facility after that time. The Alberta-based North American power producer owns nearly 6,000 MW of power generation capacity at 26 facilities.