Business

Winnipeg Free Press - PRINT EDITION

Move over coal, it's natural gas

TransCanada touts replacement

By: Lauren Krugel

Posted: 12/24/2009 1:00 AM | Comments: 0 (including replies)

jeff mcintosh / THE CANADIAN PRESS archives TransCanada boss Hal Kvisle hypes natural gas as coal-fired plants wind down. (CP)

CALGARY -- As power plants that run on coal begin to approach the end of their lifespans, natural gas is the logical successor to the carbon-intensive fuel source, the chief executive of TransCanada Corp. (TSX:TRP) said Wednesday.

"The cheapest alternative that we see today for replacing coal-fired power is natural gas combined cycle," Hal Kvisle said.

"That's going to be the economic best answer in the near term."

Coal is especially prominent in Western Canada, but many coal-fired plants are expected to go out of commission in the next 20 years or so -- a decline that may be sped up by stricter greenhouse gas emissions.

"So if we're not going to rely very heavily on coal -- and today more than 50 per cent of our electricity comes from coal in Alberta and Saskatchewan -- then what are we going to do?" Kvisle asked.

TransCanada is Canada's biggest shipper of natural gas, with a pipeline network that stretches from Alberta into Ontario, Quebec and parts of the United States.

But it is also heavily invested in nuclear and renewable power generation.

TransCanada has had success with nuclear energy through its participation in Bruce Power, a vast generating facility about 250 kilometres northwest of Toronto.

The complex, in which Saskatchewan-based uranium miner Cameco Corp. (TSX:CCO) is also a partner, supplies more than a fifth of Ontario's electricity.

TransCanada examined the possibility of bringing nuclear power to Western Canada, but found the appetite for it from the Alberta and Saskatchewan governments to be tepid.

"The reaction is that they find it interesting, but not interesting enough to really get out there and actively support it today.

"And without that kind of very clear support we just don't see the merit in proceeding with a lengthy regulatory process around nuclear plants in the West," Kvisle said.

"If they want them, we'd be very interested in building them. If they don't want them, we'll focus our efforts somewhere else."

Saskatchewan Energy Minister Bill Boyd said last week that a large-scale plant proposed by Bruce Power in that province will not be in the cards for the foreseeable future

"We are of the view that this is simply not something that meets with the needs of Saskatchewan at this particular time," he said, adding there won't likely be enough demand for electricity to justify such a big investment for at least another decade.

A few days earlier, Alberta Energy Minister Mel Knight said companies were free to build a nuclear plant in the province if they chose to, but the government wouldn't offer any subsidies or promise to buy the electricity.

"We need to keep all power generation options open so we can respond to future constraints on carbon emissions," Knight said.

About 10 per cent of TransCanda's power generation portfolio is made up of renewables, split evenly between wind and hydroelectric power.

But renewables, especially wind, are at the mercy of mother nature, so a more reliable fuel source is needed to fill in the gap.

That's where natural gas, which emits half as much CO2 as coal, comes in.

"Natural gas is a logical complement, just given the way you can size it to meet need. You can ramp it on and off relatively quickly," said Russ Girling, TransCanda's chief operating officer.

TransCanada shares were down 26 cents to $35.41 on the Toronto Stock Exchange on Wednesday.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition December 24, 2009 B6

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010; View the changes. New to commenting? Check out our Frequently Asked Questions.

WFP Hockey

Download our new hockey app for the iPhone for Winnipeg Jets updates
Editor's Bulletin

Sign up for daily bulletins from editor Margo Goodhand
Winnipeg Jets

All things NHL on our Jets landing page
Twitter

Follow our reporters and our news feeds on Twitter
News Cafe

Check out the menu, read our blog posts or get info on coming events
Facebook Fanpage

Follow our Facebook Fanpage for story links, contests and special events