Capital Power Corp. said June 18 that it will be expanding the dual-fuel capability of its primarily coal-fired Genesee Generating Station, with the intent to convert the facility completely to natural gas use by 2030.
The announcement comes almost a year after the company said it had secured natural gas contracts that would allow it to begin "co-firing" generators this year. Capital Power had planned on operating the multi-unit facility, in Warburg, Alberta, on coal until 2030, the year the Alberta government mandated coal operations must cease. The company expects to continue using coal at the facility in conjunction with natural gas up to December 2029, at which point it will fully convert to natural gas use.
Capital Power expects to have 100% dual-fuel capability at Genesee's unit 2 by mid-2020 and unit 1 by the spring of 2021. Unit 3, which is 50% owned by TransAlta Corp., is planned to use up to 40% gas by spring 2021, and will later be converted to 100% dual-fuel capability. The project will add new gas pipeline infrastructure and modify units 1 and 2. Unit conversion activities are set to occur during regularly scheduled maintenance outages.
The total cost of the project is estimated to be C$50 million through 2021, with C$18 million this year, C$19 million in 2020 and C$13 million in 2021.
"Having the dual-fuel flexibility at Genesee allows us to optimize the fuel mix to maximize economic returns," Capital Power President and CEO Brian Vaasjo said in a news release. "The financial impact is highly dependent on carbon cost and natural gas price assumptions and is estimated to increase adjusted funds from operations by approximately [C]$10 million in 2020 and [C]$20 million in 2021. Expanding the use of natural gas will also result in significantly lower absolute emissions relative to the current configurations of the units."
The facility uses up to 20% natural gas in units 1, which began operating in 1994, and 2, which began operating in 1989. The two units have a combined generating capacity of 860 MW. Unit 3 was added in 2005 and uses up to 18% natural gas. It has a 516-MW capacity. Each of the units will retain the same power generation capacity as they expand their dual-fuel capability.
Upon completion of the project, units with dual-fuel capability will have the ability to operate fully using natural gas or coal, or a combination of the two. The company will determine which fuel to use based on factors including commodities costs.
Capital Power's annual greenhouse gas emissions are expected to decrease by about 20% to 33%, it said, based on an assumption that the facility will operate 50% to 100% of the time on natural gas as compared to exclusively operating on coal.
The plant's coal comes from a mine in Leduc County, Alberta, that Capital Power co-owns with Westmoreland Coal Co. Capital Power is also building two new gas-fired units, totaling 1,060 MW, at the Genesee site in partnership with ENMAX Energy Corp.