The expansion of the city's north-end power station is complete after crews spent the last year installing a second generator and exhaust stack. The project, budgeted to cost $66 million, boosted city power capacity by about 20 per cent.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
The opening of the city’s latest power plant expansion was toasted Monday afternoon, about a month after “Unit 17” turbine came online to serve a red-hot power market this spring.
That twinning of the north-end power station adds about 20 per cent to the city’s generation capacity, and officials say it could absorb new demand while they evaluate uncertainty and technological change in the Alberta power sector.
Administrators, contractors, elected officials and invited guests from local industrial companies were on hand for tours and a luncheon at the facility, near Box Springs Road on Monday morning.
“This provides us for secure energy for the long term,” Mayor Linnsie Clark told reporters. “Now that it’s in place we can start looking at the 30- to 50-year plan and navigate the energy transition… I can’t say exactly yet what that’s going to look like, but certainly we’re focused on the long-term sustainability of our power assets.”
That could include renewables, hydrogen blending of power-plant fuel supply to reduce emissions, or a mix going forward, said administrators.
When council approved expansion in the summer of 2020 the winning factor for natural gas was the need for the city to provide on-demand power, said officials, though capital cost for new solar capacity was competitive.
The city is undertaking the creation of an “Environmental Roadmap” which could include not only reducing carbon pollution from its general operations, but from city utility interests as well. That report is scheduled to be completed by the end of 2022.
As for Unit 17, it was budgeted to cost about $66 million, the same amount budgeted for the initial Unit 16 plantside, though cost savings were found, said staff.
“We’re expecting it to come in significantly under that,” said Brad Maynes, managing director of the energy and utility division. “It was a difficult time to build a project like this through two years of COVID protocols, supply chain issues that continue to this day and inflation that we’ve all heard about. We’re very proud of this.”
Project manager Brian Strandlund also undertook the original north-end generation unit and took the occasion on Monday to announce his retirement now that the second unit is in place.
“This will bring reliable power and the opportunity for some key business (development),” said Strandlund. “This is a key item to build up and supply future customers.”
City power officials began contemplating the need for expansion in early 2018, shortly after the initial generator at the north-end station (“Unit 16,” which cost $55-million) was complete.
At that time the city also announced two huge power contracts with Hut 8 data processing and Aurora Cannabis, each large enough to consume the entire capacity of the new 44-megawatt station.
The city’s combined power plant operation now has a nameplate capacity of 299-megawatts. Unit 17 was permitted under AUC rules that require the city to have enough backup power capacity to meet full demand if the city’s largest generator at the river valley power plant goes off line.
In practice, that provides excess power capacity which allows for export sales above supplying internal customers.
“Certainly we’d invite more industrial demand, and we think it’s here already to meet the current output that we have already,” said Maynes.
The addition completed this winter essentially twins the site, and the pair of generators will work in tandem and feed a heat-recovery system that adds efficiency and cuts costs.
Council voted in the spring of 2020 to borrow up to $66 million to complete the project after then mayor Ted Clugston pushed for expansion to potentially push more power onto the Alberta grid in times of peak pricing.
In 2021, the power generation business unit recorded a record $105 million on operations – enough to cover the losses in the gas division and pay a $66-million dividend into city reserve funds.
Capital borrowing costs for generation projects is paid for out of power income, while distribution and power line upgrades are recovered via fees charged to customers.
Noted guests to Monday’s event were contractors including officials from General Electric Canada, which supplied the LM-6000 generator, Burns and McDonnell, GVN Structures, Dynamic Industrial Solutions, Peerless and Pronghorn Instrumentation.
Consulting and other engineering and services firms were Orbis Engineering, a field service engineering company wholly owned by Spark Power, Ltd., Taifa Engineering and Vira Engineering.
