Coal still an important ingredient in Canada's energy mix



    CALGARY, Aug. 8 /CNW/ - While coal-fired power generation remains an
important component of Canada's energy industry, environmental concerns could
limit its wider development, the National Energy Board (NEB) said today.
    In a briefing note called Coal-Fired Power Generation: A Perspective, the
NEB describes the factors that influence the use of coal-fired power
generation to meet Canadian energy requirements.
    Canada's coal reserves are roughly equivalent to its oil reserves and
coal fired generation represents over 16 200 MW of the installed power
generation capacity in Canada: 13 per cent of Canada's total. In 2006,
approximately 16 per cent of Canada's electricity was generated from coal,
mostly in Alberta and Ontario. Coal-fired generation is non-existent in
provinces such as British Columbia and Quebec, which have an abundance of
hydroelectric resources.
    The NEB expects that the use of coal will decline but will remain an
important part of meeting Canada's energy requirements with an estimated
10 000 MW of installed capacity in place in 2030.
    Some of the issues surrounding coal burning processes originate from
environmental concerns. Coal-fired processes - even with access to the most up
to date technology and low sulphur coal - result in more greenhouse gas
emissions than gas-fired generation. Uncertainty about the direction of future
GHG regulations, and the cost and reliability of newly developed, clean coal
technologies limit the opportunity for increased coal-fired generation. Time
will tell whether carbon capture and storage technology will prove viable for
coal-fired power plants.
    This energy brief is part of the NEB's Energy Information Program, which
was launched to provide energy related information to diverse audiences.

    The NEB is an independent federal agency that regulates several parts of
Canada's energy industry. Its purpose is to promote safety and security,
environmental protection, and efficient energy infrastructure and markets in
the Canadian public interest, within the mandate set by Parliament in the
regulation of pipelines, energy development and trade. As part of its mandate
the NEB monitors the supply of all energy commodities in Canada and publishes
reports on energy, called Energy Market Assessments.

    This news release, the briefing note and the Energy Brief are available
on the Board's Internet site at www.neb-one.gc.ca under What's New!

    
                  Coal-Fired Power Generation - An Overview
    

    Coal-fired power generation is an important source of electricity in a
number of Canadian provinces. In 2006, about 13 per cent of Canada's
generation capacity used coal. While coal-fired power is relatively
inexpensive, environmental concerns could create some uncertainty about the
future use of this type of generation. This Energy Brief provides some
perspective on the status of coal in the Canadian generation mix and addresses
the factors governing the outlook based on the National Energy Board's most
recent Energy Futures Report, released in November 2007.

    Burning Coal to Produce Electricity - Benefits and Concerns

    The abundance of coal reserves in North America tends to keep pricing
fairly stable, unlike other resources such as gas or oil, which are more
susceptible to geopolitical uncertainties. Canada's energy reserves contain
roughly equivalent amounts of coal and oil, and three times more coal than
gas. Another advantage, particularly in western Canada, is that most power
plants are located in close proximity to coal deposits, resulting in secure
and long-term fuel supply arrangements with relatively low transportation
costs.
    The greatest concerns about burning coal to produce electricity are
environmental. Even with access to new technology and low sulphur coal, a coal
fired power plant produces about twice the amount of green house gas (GHG)
emissions as a modern gas-fired generation plant. The uncertainty about future
environmental regulations certainly impacts the consideration of coal-fired
generation as a viable investment.

    
         Latest Technological Developments in Coal-Fired Generation
    

    Supercritical-Pressure Pulverized Coal Combustion Technology

    Generating electricity using this combustion technology requires the use
of a boiler to heat and pressurize steam to supercritical levels. The benefits
of this method include a reduction in fuel consumption by approximately
18 per cent and as a by-product GHGs would also decrease.
    The most recent coal-fired generation plant built with this technology is
Genessee 3 near Edmonton, which has been in operation since March 2005.

    Integrated Gasification Combined Cycle (IGCC)

    An IGCC power plant uses a partial combustion process that converts coal
into syngas, a mixture of carbon monoxide and hydrogen, which is then used to
fire the combustion turbine in a combined-cycle power plant.
    Along with improved efficiency in power production, and a decrease in the
production of GHGs, the benefits of IGCC include the ability to scrub
pollutants like sulphur and heavy metals from the fuel before it is burned.
IGCC can produce a concentrated carbon dioxide (CO(2)) stream which can make
CO(2) storage more economical.
    As the technology matures, IGCC has the potential to become the preferred
method to generate electricity from coal.

    Carbon Capture and Storage (CCS)

    There are a number of technologies developing to capture and store carbon
for power plants, either scrubbing CO(2) from the exhaust stream after
combustion or removing it from the fuel before power is generated.
    Post-combustion scrubbing is less efficient, but it allows the plant to
operate as a conventional facility in the event of technical difficulties with
the CO(2) scrubbers. Pre-combustion scrubbing in an IGCC plant typically
involves capturing the CO(2) during the gasification process. While this
process may be more efficient, it also makes the operation of the plant
dependent of the reliability on the equipment used to capture CO(2).
    Once the CO(2) has been collected, it can then be shipped by pipeline to
an area where it can be stored in geological formations such as active or
depleted oil and gas reservoirs, or deep saline aquifers. In Canada, Alberta's
geology appears to provide the required infrastructure, which could be
leveraged for CO(2) transportation and injection.

    Coal Generation Trends in Canada

    Compared to other Canadian provinces and territories, Alberta relies the
most heavily on coal-fired power generation. With a capacity of 6 217 MW, coal
fired generation represents 53 per cent of the province's total capacity.
While Ontario may have more installed capacity with 6 329 MW, coal-fired
generation only represents 19 per cent of its total generation capacity.

    
    Coal-fired generation capacity in Canada's overall energy mix (2006)
    -------------------------------------------------------------------------
    Province or Territory        Total (MW)   Coal (MW)   Percentage of coal
                                                            fired capacity
    -------------------------------------------------------------------------
     Canada                        123792       16272              13
    -------------------------------------------------------------------------
     British Columbia               14828           0               0
    -------------------------------------------------------------------------
     Alberta                        11736        6217              53
    -------------------------------------------------------------------------
     Saskatchewan                    3879        1800              46
    -------------------------------------------------------------------------
     Manitoba                        5629          98               2
    -------------------------------------------------------------------------
     Ontario                        32521        6329              19
    -------------------------------------------------------------------------
     Quebec                         40219           0               0
    -------------------------------------------------------------------------
     New Brunswick                   4549         541              12
    -------------------------------------------------------------------------
     Nova Scotia                     2463        1288              52
    -------------------------------------------------------------------------
     PEI                              171           0               0
    -------------------------------------------------------------------------
     Newfoundland and Labrador       7494           0               0
    -------------------------------------------------------------------------
     Nunavut                           54           0               0
    -------------------------------------------------------------------------
     Northwest Territories            142           0               0
    -------------------------------------------------------------------------
     Yukon                            108           0               0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
     Sources: Statistics Canada
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Alberta is currently the most active province in the development of new
coal-fired generation. One new plant is already in operation, Genessee 3, and
another, Keephills 3, has an in service date of early 2011. Capacity increases
are also being planned at a number of existing plants.
    The province plans to retire over the next 15 years a number of older
coal plants whose current generation capacity amounts to 2 500 MW. It's
expected that these units will be replaced by a combination of coal (mainly
IGCC) and oil sands cogeneration plants, which will likely be powered by
natural gas or bitumen.
    A research and development project funded by the federal and provincial
governments is providing EPCOR Utilities Incorporated and the Canadian Clean
Power Coalition with a $33 million dollar grant that, if successful, could see
a 500 MW IGCC plant in service as early as 2015.

    Saskatchewan - Cost uncertainty and a demand growing faster than
anticipated has lead the province to reconsider the coal-fired generation
option and to instead opt for the natural-gas combustion turbine route for
power generation.
    However, earlier this year, SaskPower announced plans to refurbish and
retrofit the existing Boundary Dam Unit 3 coal-fired plant to incorporate
CO(2) capture technology. The refurbished unit will produce 100 MW as early as
2015.

    Ontario - Concerns over coal's environmental effects are among the main
reasons why the province has announced plans to retire by 2015, over 6 000 MW
of coal-fired generation, which is the equivalent of approximately 20 per cent
of its current generating capacity. To compensate for the loss of coal-fired
power, the province is considering a number of options such as the return to
service of a number of nuclear units at the Bruce generating station; the
construction of a new natural gas-fired generation plant; an increase in
energy from renewable sources; and the introduction of a "Conservation
Culture" to mitigate future demand growth. Some coal-fired facilities,
especially those fitted with scrubbers, could remain in service past the 2015
timeline as a back-up in case of potential delays in the in service date of
the alternative power generation sources.

    Nova Scotia and New Brunswick - Clean coal technologies can also be
expected to play a role in New Brunswick and Nova Scotia over the next 20
years.

    
                        Observations and Implications
    

    Coal-fired generation will remain a significant component of Canada's
power production mix for years to come. On the other hand, coal faces
challenges due to concerns about air quality, uncertainty about future GHG
regulations, and competition from other sources of generation such as
renewables, natural gas and nuclear.
    Any forecast will be subject to considerable uncertainty until more is
known about the direction of future GHG regulations, and the cost and
reliability of new coal technologies. If carbon sequestration and storage
proves practical, it would address a major concern about coal-fired generation
and tend to promote the construction of new coal-fired power plants and
associated CO(2) pipelines.





For further information:

For further information: Carole Léger-Kubeczek, Communications Officer,
Email: carole.leger-kubeczek@neb-one.gc.ca, Telephone: (403) 299-2717, TTY
(teletype): 1-800-632-1663; For a copy of the briefing note: National Energy
Board, Library, Telephone: (403) 299-3561, Email: library@neb-one.gc.ca


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