TransAlta walks away from carbon-capture plant
By Scott Haggett
CALGARY, Alberta, April 26 (Reuters - TransAlta Corp (TA.TO: Quote) abandoned plans on Thursday to build a C$1.4 billion ($1.42 billion) carbon capture and storage facility at an Alberta coal-fired electricity plant because it could find no buyers for the carbon dioxide and no way to sell emission-reduction credits.
Power producer TransAlta, whose first-quarter profit tumbled on weak power prices and high maintenance costs, said it would not proceed with Project Pioneer, a carbon-capture demonstration plant with Enbridge Inc (ENB.TO: Quote) and Capital Power Corp (CPX.TO: Quote).
The project was also backed by C$779 million of funds from the Alberta and federal governments. It would have captured and stored a million tonnes of carbon-dioxide emissions annually from the 450-megawatt Keephills 3 power plant west of Edmonton.
TransAlta said it found no firm buyers for the carbon dioxide to be captured at the plant, and said there is, as yet, no cap-and-trade system that would let the company and its partners sell emission-reduction credits.
"Two things were instrumental in our decision," said Don Wharton, vice-president, policy and sustainability for TransAlta.
"One was the lack...of a suitable price for the pure CO2 created by the project. The second was the uncertainty around the value of emission reductions that would be created by Project Pioneer under regulatory frameworks that are still being developed."
Carbon capture technology is a key plank in federal and provincial government plans to cut greenhouse gas emissions from Alberta's oil sands operations and power plants, while allowing the growth of the two sectors to continue unchecked.
The Alberta government has earmarked C$2 billion for carbon capture as it looks to improve Alberta's environmental reputation. At the same time it wants to boost production of carbon-intensive oil sands crude and continue to generate most of its electricity from coal. Continued...