Capital Power could revisit its Genesee CCS Project if economics improve.

By Dale Lunan

Canadian utility Capital Power said May 1 it would discontinue work on a C$2.4bn carbon capture and sequestration (CCS) project at its re-powered Genesee gas-fired power plant in west central Alberta, citing uncertain economics.

In its Q1 2024 earnings release, the utility, headquartered in Edmonton, said it had confirmed that CCS is a technically viable technology and potential pathway for decarbonising gas-fired power plants, but said that a project at Genesee, which is in the final stages of converting from coal to natural gas, “is not economically feasible.”

In a later conference call, CEO Avik Dey said the Genesee CCS project didn’t pass Capital Power’s internal risk-return thresholds, but he was quick to signal the utility still believes in the viability of CCS for decarbonising gas-fired power plants.

“This is a result of our thorough work including extensive technical review of the post-combustion CCS value chain from capture through sequestration, including types of solvent and components that can optimise the process,” he said. “A lot of the learnings here are applicable to CCS anywhere, so we will continue to evaluate potential CCS projects.”

Notably, he said, Capital Power is continuing to evaluate incorporating CCS into its 1,633 MW Midland Cogeneration Venture (MCV) in Michigan. In June 2023, Capital Power and its MCV partner, Manulife Investment Management, were awarded a US$770,000 grant from the Michigan Public Service Commission to study the potential to capture between 250,000 and 500,000 tonnes/year of CO2 in a first phase, with later phases providing an opportunity to scale up to 2mn tonnes/year.

Capital Power announced the Genesee CCS project in June 2022, when it partnered with Mitsubishi Heavy Industries Group and Kiewit Energy Group on a front-end engineering and design (FEED) study, in parallel with engineering work by Enbridge on its proposed Open Access Wabamun Carbon Hub.

“If I had to pinpoint one thing today, I think what will unlock CCS post-combustion for natural gas-fired power plants is the capex per unit coming down such that we can work within whatever regulatory framework exists, whether it is the State of Michigan, the Province of Alberta, and work within whatever federal framework exists, whether it is the CER (Clean Electricity Regulations) or working within the IRA (Inflation Reduction Act),” Dey said in the conference call. “I do feel positive about CCS for medium to long-term, but we’re just early.”  

The Enbridge hub, one of several being developed across Alberta, is designed to capture and store 3mn tonnes/year of CO2 from Genesee and more than 1mn tonnes/year from an Edmonton-area cement plant.

In an email to Gas Pathways, Enbridge said its project was unaffected by Capital Power’s decision to discontinue work on the Genesee CCS project.

“Enbridge continues to advance the Wabamun Carbon Hub to provide open access CO2 transportation and storage solutions for industrial facilities in and around Edmonton, Alberta, including Heidelberg Materials’ Edmonton cement plant and its up to 1.3mn tonnes/year CO2 capture project,” Enbridge said. “There is no material impact to Enbridge’s financial position or growth projections, nor was this characterised as a secured project by Enbridge.”

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