Canada: The power plants accelerate Coal-to-Gas ConversionIn Canada, coal to natural gas conversion continues significantly increasing the domestic nat gas demand. See how the firms accelerate their plans to convert their plants from coal-fired to natural gas -fired, including TransAlta:
https://www.desmog.ca/2017/04/27/it-s-official-coal-has-become-uneconomic-canada
https://www.cbc.ca/news/canada/edmonton/transalta-power-coal-gas-transition-alberta-1.4077574
https://www.newswire.ca/news-releases/transalta-board-approves-plan-for-accelerating-transition-to-clean-power-in-alberta-619906543.html
In a somewhat unexpected move, the Calgary-based electricity company TransAlta announced it will accelerate the phase-out of eight coal-fired power units — representing almost 3,000 megawatts of generating capacity — with six of those to be converted to gas-fired generation between 2021 and 2023.
The remaining two will be closed on Jan. 1, 2018.
“It makes complete economic sense that they did that,” says Binnu Jeyakumar, electricity program director at the Pembina Institute, pointing to expiring power purchase agreements (PPAs) and an increasing inability for coal to compete with natural gas and renewables.
While calculations vary, it’s estimated that the conversion of the six coal plants to simple cycle gas operations — a process that will cost around $300 million in total — will cut emissions by between 30 and 40 per cent per megawatt hour of electricity produced.
Expiring Power Purchase Agreements Will Make Coal Plants Uneconomical
In late 2015, the Alberta government announced a mandatory phase-out of coal-fired power plants by 2030.
While 12 of 18 plants were set to be shuttered under regulations introduced by the previous federal government, the move by Alberta’s NDP meant that plants that would have otherwise been open until well beyond 2030 — in one case, until 2061 — would be required to close.
That certainly didn’t pertain to TransAlta’s Sundance Units 1 and 2. In fact, the PPAs for the two units will expire on December 31, 2017.
That means the company will be completely exposed to market prices, which Jeyakumar says will make them uneconomical.