Steve Snyder, president and CEO of TransAlta.Chris Bolin
Power producer TransAlta Corp. says it won't be as easy to phase out the use of coal at its Alberta plants as it will be at its Washington State station, where the company and the state government have agreed to cut carbon-dioxide emissions in half within 15 years.
The Calgary-based electricity generator operates the only non-regulated coal-fired power plant in Washington, where there isn't much in the way of coal reserves or opportunities to capture emissions and store them underground.
"Alberta's quite different," TransAlta chief executive officer Steve Snyder said on a conference call Tuesday to discuss his company's higher first-quarter profits.
"We have significant coal reserves. A significant amount of our availability is through coal plants and we have excellent opportunities for carbon capture."
TransAlta announced late Monday it had signed a memorandum of understanding with Washington's Department of Ecology to cut greenhouse gas emissions in half at the company's Centralia plant in western Washington by 2025 by shifting from carbon-heavy coal to greener sources like natural gas and renewables.
A draft agreement on the specifics of the plan are set to be released in July, after which point the public will be consulted, Mr. Snyder said.
Ottawa has also signalled it plans to force power producers to shift from coal to greener energy sources over time, but Mr. Snyder said there are still a lot of unknowns on that front.
He said he sees a possibility for some plants in his company's fleet to make the coal-to-gas switch, but that coal will still remain a key part of Alberta's overall energy diet.
"Bottom line is, everyone is on the same wavelength, which is we want to do something to physically reduce carbon dioxide [emissions]" Mr. Snyder said.
"We want to do it in an orderly fashion and we don't want to take too much optionality out too soon because that could come back to haunt availability and supply and reliability 10 [to]15 years out."
In an effort to add more renewable assets to its portfolio, TransAlta took over Calgary-based green power producer Canadian Hydro Developers Inc. for $755-million late last year. That company has wind, hydroelectric and biomass power plants in Alberta, British Columbia, Ontario and Quebec.
TransAlta went after Canadian Hydro because it recognized environmental regulations were bound to become more stringent for carbon-heavy sources of energy like coal.
Earlier Tuesday, TransAlta said its first-quarter net profits rose to $67-million, helped by fewer outages at its Alberta coal-fired plants
The quarterly earnings were worth 31 cents per share, an increase from $42-million, or 21 cents per share, in the same period of 2009.
Analysts were on average expecting first-quarter earnings of 30 cents per share, according to estimates compiled by Thomson Reuters.
TransAlta said the results were helped by greater generation availability, which rose to 91.4 per cent compared with 86.4 per cent a year ago, caused by both fewer planned outages at the Keephills and Sundance plants and fewer unplanned outages at the Keephills and Wabamun plants.
Quarterly revenue declined to $723-million from $756-million.
Comparable earnings rose to $67-million from $36-million and included a $10-million after-tax reduction in decommissioning costs related to Wabamun, offsetting lower electricity pricing in Alberta and the Pacific Northwest.
"With over 90 per cent of our total portfolio contracted for the remainder of the year sustaining our targeted operating performance will allow us to achieve our earnings and cash flow objectives," Mr. Snyder said in a release.
"However, electricity markets continue to be challenging due to both low prices and low demand. I do not expect to see these conditions change quickly."
TransAlta is the largest publicly traded power generator and electricity marketer in Canada. Most of its plants run on coal, but some run on greener sources like natural gas and wind. The Calgary company is one of Canada's biggest industrial polluters.
The Canadian Press