Regulatory Requirements for Coal-Fired Generation in the Province of Alberta

Alberta Environment and Parks

October 19th, 2015

KEEPHILLS POWER PLANT

Alberta’s Electricity Industry – An Overview and Statistics (courtesy Alberta Energy website)

• Installed Generating Capacity in Alberta as of November 2013 – 14,903 MW (includes interconnections)

• Peak Demand in 2012 – Climatic Year (October to September)– 10,599 MW (highest demand ever was in 2011 – 10,609 MW)

• Generation Additions since 1998 – Greater than 7,400 MW

• Generation Decommissions since 1998 – Approximately 1,513 MW

For more information, go to <http://www.energy.alberta.ca/Electricity/682.asp>

Alberta’s Electricity Industry – Environmental Protection and Enhancement Act (EPEA) Definitions

• Activities Designation Regulation– “power plant” means a plant that produces steam or thermal electric power

and has a rated production output of greater than one megawatt under peak load, but does not include a production facility for space heating….

AND

– under Division 2 - Substance Release - Part 9: Power Plants

(i) the construction, operation or reclamation of a power plant

Alberta’s Electricity Industry – EPEA Definitions

• Environmental Assessment (Mandatory and Exempted Activities) Regulation

– Schedule 1 - Mandatory ActivitiesThe construction, operation or reclamationof …..(k) a thermal electric power generating plant that uses non-gaseous fuel and has a capacity of 100 megawatts or greater;

(l) a hydroelectric power generating plant with a capacity of 100 megawatts or greater;

• Purpose of Environmental Assessment– Gather information– Public involvement– Support sustainable development

Alberta’s Electricity Industry – Approval Requirements

• Approvals cover all environmental aspects and media affected by the operation of a power plant

– Air emissions

– Industrial wastewater

– Groundwater

– Waste

– Soil

– Reclamation

– Domestic wastewater and waterworks

• Facility air approval conditions specify

– allowable emission sources

– operational requirements

– emission limits (potentially for a number of different air contaminants)

– monitoring (both source and ambient), and

– reporting requirements

• For the coal-fired power plants, these requirements are quite significant

Why is the Electricity Sector of Environmental Significance?

• 2005 Criteria Air Contaminant Dataset– For Alberta, contribution to total provincial industrial inventories

• Sulphur dioxide - ~25% (2nd highest total)

• Nitrogen oxides - ~13% (3rd highest total)

– Only 43 plants in total

• Coal-Fired Power Plants (Six Plants) in 2013– SO2 – 104,431 tonnes (almost entire contribution of the utility sector)

– NOx – 63,728 tonnes (~90% of all NOx emitted from the utility sector)

– Particulate – 5,533 tonnes (almost entire contribution of the utility sector)

Alberta’s Electricity Industry – Installed Capacity

• Coal-Fired Power Plants– as of November 2013, accounts for ~40.6% of the installed utility

power generation capacity in Alberta

– significant air contaminant emissions

• Gas-Fired Power Plants– as of November 2013, accounts for ~41.3% of the installed utility

power generation capacity in Alberta

http://ets.aeso.ca/ets_web/ip/Market/Reports/CSDReportServlet

SUNDANCE POWER PLANT

Courtesy Alberta Energy website

Alberta’s Electricity Industry – Process to Move Forward

• Clean Air Strategic Alliance’s Electricity Project Team (EPT)– Tasked with looking at the air quality management approaches in

the utility sector and setting emission requirements post 2005 for both new and existing plants

– Process relies on multistakeholder representation and consensus decision making

Alberta’s Electricity Industry – Process to Move Forward

• Final report of the CASA EPT, entitled “An Emissions Management Framework for the Alberta Electricity Sector – Report to Stakeholders” was finished in November 2003

• Dealt with all aspects of the air emissions from Alberta’s utility sector

• Framework is intended to be in place for the long-term• Report contained 71 recommendations, including new post-2005

emission standards for both coal fired and gas fired units and a set five year frequency for technology review

• Specifies design life of all existing units and outlines emission expectations at the end of the original design life

Alberta’s Electricity Industry – Applicable Emission Standards

• Alberta Air Emission Standards for Electricity Generation – Coal Fired Power Plants– SO2 - 0.80 kg/MWh– NOx – 0.69 kg/MWh– Particulates – 0.095 kg/MWh

• These standards for coal fired power plants came into effect on January 1, 2006 until December 31, 2010

• Standards were applicable for both new units and those units which are at their “end of design life”

Alberta’s Electricity Industry – Process to Move Forward

• Introduced a baseline and credit emission trading system to allow companies a choice on how to achieve emission requirements for SO2 and NOx

• Emission trading regulation issued and SO2 and NOx baseline assessment now complete

• System has now been generating credits for some time • Two coal-fired units have now reached the end of their design

life (one at the end of 2012, one at the end of 2013, and one at the end of 2015) and will have to meet emission reduction obligations

• This can be done by installation of pollution control equipment, use of emission credits, or a combination of both

Alberta’s Electricity Industry – Applicable Emission Standards

• Previously mentioned standards document specified for the first time the concept of “end of design life” for existing units and listed those dates in the document

• When a unit arrived at the specified date, it must meet the “standard of the day” via physical modifications or via emission trading

• If a unit chose physical modifications to meet the emission standards, a new design life was allowed

• If a unit chose to comply via emission trading, they could only do so for a specified period before they would have to upgrade or shut down

Coal Unit Capacity

(MWs)Unit Owner Commissioned

Federally Mandated End-of-Life (Dec. 31)

Years of Operation

CASA End-of-Design-Life (Dec. 31)

Battle River 3 149 ATCO Power 1969 2019 50 2013Sundance 1 280 TransAlta 1970 2019 49 2017

HR Milner 1 144.3Maxim Power

1972 2019 472012

Sundance 2 280 TransAlta 1973 2019 46 2017Battle River 4 155 ATCO Power 1975 2025 50 2015Sundance 3 353 TransAlta 1976 2026 50 2020Sundance 4 406 TransAlta 1977 2027 50 2020Sundance 5 406 TransAlta 1978 2028 50 2020Sundance 6 401 TransAlta 1980 2029 49 2020Battle River 5 385 ATCO Power 1981 2029 48 2021Keephills 1 395 TransAlta 1983 2029 46 2023Keephills 2 395 TransAlta 1984 2029 45 2024Sheerness 1 390 ATCO Power 1986 2036 50 2026

Genesee 2 400Capital Power 1989 2039 50

2029

Sheerness 2 390 ATCO Power 1990 2040 50 2030

Genesee 1 400Capital Power 1994 2044 50

2034

Genesee 3 466 CP and TA* 2005 2055 50 2045Keephills 3 463 CP and TA* 2011 2061 50 2051

Alberta’s Electricity Industry – Applicable Emission Standards

• Standards were to be reviewed on a 5 year basis to prevent them from becoming “stale-dated”

• Review started in May 2007 and was to be a focused one year review

• Process actually took more than three years • Final report with both consensus and non-consensus

recommendations was forwarded to the Government of Alberta for final decision

• This decision was deferred

Alberta’s Electricity Industry – Process to Move Forward

• First 5-Year Review of the framework was completed in May 2010 but a final decision has been deferred– Proposed emission standards for new coal-fired units were agreed

upon

– Proposed emission standards for new gas-fired units, both for electricity generation and cogeneration, were NOT agreed upon

• The second 5-Year Review was started in May 2013 even though a final decision has yet to be made on the first review. The review was completed by April 2015.

Alberta’s Electricity Industry – Consensus Coal Unit Emission Standards

• Proposed coal-fired power plant standards

– SO2 – 0.65 kg/MWh or 90% removal, whichever is less stringent

– NOx – 0.47 kg/MWh (but design specification of 0.40 kg/MWh which implies certain control equipment installation)

– PM – 0.066 kg/MWh– Mercury - 75% capture design target with optimization plans

to meet 80% capture by 2013

Alberta’s Electricity Industry – Potential Pollution Control Technologies for Coal-Fired Power Plants

• Sulphur Dioxide Control– Flue Gas Desulphurization – Wet/Dry

• Nitrogen Oxides Control– Low NOx burners/staged combustion/overfire air– Selective catalytic reduction unit

• Particulate Matter– Fabric filter baghouse

Alberta’s Electricity Industry – Previously an Emerging Issue

• Mercury Emissions– 1 tonne annual emission from Alberta utilities– Mercury is both persistent and bioaccumulative in the ambient environment– CCME CWS Process and CASA EPT– Difficulty in controlling emission of mercury based on its form (i.e. elemental

vs. oxidized)– Alberta issued a regulation that will require the control of mercury from

power plants– Different actions have been implemented rather than first proposed (use of

activated carbon as an adsorbent with no replacement of the ESPs)– Mercury emissions must also be continuously monitored

• Mercury removal is now actively occurring!

Alberta’s Electricity Industry – Ongoing Issues

• Greenhouse Gas Emissions– 53 Mt annual emissions in 2005 (23% of manmade emissions in

Alberta)

– Specified Gas Emitters Regulation proclaimed in early 2007 (updated earlier this year)

– Coal-fired power plants are the most significant source of GHG emissions in Alberta!

– EC GHG emission intensity regulation requires physical compliance with the standard at end of design life

– This will likely lead to the shutdown of existing coal-fired units

– This regulation has now been published in Canada Gazette Part 2 and is the “norm”

Alberta’s Electricity Industry – Ongoing Issues

• CASA Electricity Emission Management Framework - Expected Emission Reductions from a 2003 Baseline– SO2 - 46% reduction by 2025

– NOx – 32% reduction by 2025

– Primary Particulate Matter – 51% reduction by 2025

– Mercury – 50% reduction

Will the CASA Framework be relevant in the near future?

Alberta’s Electricity Industry – Ongoing Issues

• Interaction between CASA Framework, Federal GHG Emission Intensity Regulation, and Multiple Other Policy Considerations– Conflicting end-of-life dates

– Existing Frameworks ignored

– Concerns over stranded capital due to large scale pollution control equipment installation with short remaining life of a generating unit

– Who pays for any unit retrofits?

– Potential disruption to the Alberta Electricity System

– Split view of the affected industry sector

• How will this situation be resolved?