TransAlta Corporation will convert three of its existing Alberta thermal units to gas in 2020 and 2021 by replacing existing coal burners with natural gas burners. The company will also convert two units to highly efficient combined cycle natural gas units in the late 2023 to late 2024 period.
The initiatives are part of the company’s new Clean Energy Investment Plan, which includes converting its existing Alberta coal assets to natural gas and continuing to invest in renewable energy. The total cost of the plan is expected to be around $2 billion, which includes approximately $800 million for four wind power projects already under construction.
TransAlta is Alberta’s largest electricity generator by far, with a generation base that is twice the size of its nearest competitor.
The company is putting “a final bow on our coal to gas transition,” TransAlta President and CEO Dawn Farrell said at a presentation to investors in Toronto on September 16, 2019. “By the end of 2021, our coal fleet will be well on its way to gas, with only 32 percent of the fleet remaining on coal,” she said, referring to TransAlta’s power generating assets. “By 2025, we will no longer be using coal as a primary feedstock.”
The company has accelerated its coal phase-out in response to carbon pricing, calculating that the transition to natural gas would earn the company more money in a market with a stable carbon price. John Kousinioris, chief operating officer of TransAlta and president of the company’s TransAlta Renewables Inc., told investors he expected carbon pricing in the province would be based on the federal output-based pricing standard, and that certainty on carbon pricing in Alberta would come “in about a month or so.”
Alberta intends to implement its Technology Innovation and Emissions Reduction (TIER) system, the successor to the Carbon Competitiveness Incentive Regulation (Alta. Reg. 255/2017), on January 1, 2020. Details of TIER are still being finalized.