Capital Power waves goodbye to $2.4B carbon capture project

By Catherine Griwkowsky May 6, 2024

A carbon capture and storage project for Capital Power’s Genesee geothermal power station was cancelled last week as being economically unfeasible. (Capital Power)

Capital Power told shareholders in its Q1 update that it is bidding adieu to its planned $2.4-billion carbon capture and storage (CCS) project at its Genesee plant, instead pursuing its MOU with Ontario Power Generation (OPG) on small modular reactors.

“Through our development of the project, we have confirmed that CCS is a technically viable technology and potential pathway to decarbonization for thermal generation facilities including Genesee,” the company stated in its update.

“However, at this time, the project is not economically feasible and as a result we will be turning our time, attention, and resources to other opportunities to serve our customers with balanced energy solutions.”

The provincial government had pitched in $5 million for the project.

The Genesee plant is in the process of “repowering” in its conversion from coal to natural gas, and the CCS project was forecasted to eliminate three million tonnes of emissions. The coal mine’s operator, Altius Royalty Corp., had sought $190 million in damages from the province over its phaseout of coal; however, the Alberta Court of Appeal dismissed the request last month.

On Wednesday, Affordability and Utilities Minister Nathan Neudorf inked an MOU with Saskatchewan Crown Investments Corporation Minister Dustin Duncan to share information on nuclear power generation, including nuclear supply chains and regulation and development of technologies such as small modular reactors.

Neudorf said renewables alone can’t provide a reliable baseload of power to meet the province’s net-zero goals by 2050, and Saskatchewan’s uranium mining will help Alberta reach that goal.

Speaking at that news conference, Neudorf told reporters he is disappointed in the lack of CCS action on the federal government’s part, with Capital Power expressing doubts over the project’s viability as it awaited details of the Canada Growth Fund.

“We have to be able to achieve these goals,” Neudorf said. “They can’t just be something spouted out as a wish and a dream. We have to provide a realistic path forward.”

Federal Environment Minister Steven Guilbeault told reporters at a news conference about progress on emissions reduction that CCS plays a role, with seven Mts stored countrywide as of 2022, but it isn’t the only solution and the federal government can’t fund every project.

“We’re putting our money where our mouth is, and I would like to see industry do the same,” Guilbeault said. “There’s billions of dollars of federal money to help these companies invest in carbon capture and storage.”

Environment Minister Rebecca Schulz slammed the federal government’s foot-dragging in a statement to Alberta Today.

“The emission reduction potential of this CCS project was high,” Schulz said. “And despite years of promises from Ottawa, the federal government has failed to provide the necessary support to help emissions-reduction projects like this one move forward, and have instead created uncertainty in the market.”

But NDP Energy critic Nagwan Al-Guneid pointed the finger at the UCP for adding uncertainty to the energy sector.

“The policy environment in Alberta right now has been very unstable under the UCP,” Al-Guneid told Alberta Today. She said the NDP has challenged Danielle Smith “multiple times” to show that Alberta has the policy certainty needed for producers to move ahead with big projects.

Environmental Defence’s associate director Julia Levin called carbon capture “unnecessary, ineffective and expensive,” saying it is better to avoid producing emissions in the first place.

“Carbon capture has not been successfully used in the power sector,” Levin said. “Most projects never make it off the ground. The few that do, like the Boundary Dam coal plant, capture a fraction of the promised rate.”

The province has bet heavily on carbon capture, utilization and storage, including to store emissions from natural gas in hydrogen production, committing $1.2 billion for up to 15 years in the Quest and Alberta Carbon Trunk Line projects.

It has also promised an Alberta Carbon Capture Incentive Program linked to federal CCS investment tax credits. Emissions Reduction Alberta and Alberta Innovates have given $100 million to more than 100 projects.