With half of its electricity plants fuelled by coal, the head of TransAlta Corp. is a believer in how valuable carbon capture and storage could be for the company.
But a decision in April to scrap Project Pioneer, a $1.4-billion project to capture carbon dioxide emissions from an Alberta coal plant and store them underground, has TransAlta president and CEO Dawn Farrell less optimistic about the technology's feasibility in the future.
TransAlta was one of the companies backing the project. Enbridge Inc. and Capital Power Corp. were the others.
The idea was to sell some of carbon dioxide to nearby energy producers, who would inject the gas into their fields as a means to get more oil out of the ground.
The federal and Alberta governments have been banking on carbon capture and storage to reduce the carbon footprint of the power generation and the oil and gas industries. Project Pioneer, which would have been connected to the Keephills 3 coal plant west of Edmonton, received $779 million in backing from Ottawa and Edmonton.
Although an initial study found the technology worked and the capital costs were in line with expectations, things changed as planning moved forward and other methods of oil extraction improved.
New federal legislation on carbon emissions means TransAlta's Sundance plant will reach the end of its first lifespan in 2019. Other plants will follow in the ensuing decade. Once a plant reaches the end of its life, the company can continue to operate it with a carbon-capture retrofit or shut it down.
TransAlta has power plants in Canada, the U.S. and Australia. The utility is looking at further expansion in the U.S. in 2013 and is hoping to make some acquisitions, possibly in California, related to wind energy.