Emissions

Citing costs, Capital Power cancels $2.4 billion carbon capture project

Capital Power said CCS is “technically viable” but not economically feasible, even with government subsidies.

Citing costs, Capital Power cancels $2.4 billion carbon capture project
(Genesee generating station)

In its Q1 2024 results, Canadian electricity producer Capital Power announced it is pulling out of its proposed $2.4 billion carbon capture and storage (CCS) project at the Genesee Generating Station.

Capital Power said CCS technology is “technically viable” and a potential pathway to decarbonization for thermal generation facilities, including the Genesee Generating Station. However, the company ultimately concluded that the project was not economically feasible, even with government subsidies.

Environmental Defence, a Canadian environmental advocacy organization, released a statement in response to Capital Power’s decision to cancel the CCS project, arguing that carbon capture is “unnecessary, ineffective and expensive” when considered against clean energy like wind, solar and storage.

“This decision is just the latest failure in carbon capture’s terrible track record. It should serve as a lesson for governments on how reckless it is to be using taxpayer dollars to subsidize these projects,” said Environmental Defence’s Julia Levin, Associate Director, National Climate. “The decision came despite massive government subsidies. Capital Power was already given $5 million from the Government of Alberta and the project would have been able to access both federal and provincial tax credits. Despite this, Capital Power still decided that the project would not be financially viable.”

Additionally, Environmental Defence said the few carbon capture projects that actually make it off the ground, such as the one at the Boundary Dam coal plant, typically only capture a “fraction” of the promised rate.

“The bottom line: the most effective way to deal with carbon dioxide emissions is to prevent them from ever being created, rather than trying to pluck them from the air or smokestacks and inject them underground,” Levin said.

In 2021, Capital Power began repowering Units 1 and 2 at the Genesee Generating Station, replacing coal-fired steam generators with gas-fired combined cycle technology. The utility approved its project in 2020, and Missouri-based Burns & McDonnell began design and engineering began in 2021.

“We delivered affordable and reliable power across our diverse and strategically positioned fleet of flexible generation assets,” said Avik Dey, President and CEO of Capital Power. “We continued to build decarbonized power through our Genesee Repowering project where we reached a key milestone with our startup of simple cycle unit 1 during Q1 2024. Once we startup simple cycle unit 2, expected in mid-2024, we will be fully off coal, achieving a significant carbon reduction target.”