Steam rises from the City of Medicine Hat's river-valley power plant in this 2022 file photo. New federal clean energy regulations outlined this week would allow the city's newer, north-end plant a longer exemption, but older units are still facing heavy regulation in the next decade.--News Photo Collin Gallant
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Newly finalized clean electricity rules from Ottawa would extend the potential lifespan of Medicine Hat’s newest gas-generating turbines, but would still require the entire facility to reduce carbon intensity by three-quarters by 2035, city power officials said Wednesday.
An eventual “net-zero” operating environment would still be required by 2050.
“It brings a little more flexibility and some slight improvements in other spots, but it’s still very difficult for us with our gas-generation fleet,” said Travis Tuchscherer, the city’s director of
energy marketing and business analysis.
On Tuesday, Environment Minister Stephen Gilbeault announced the final regulations in Ottawa that generally extend a timeline the government has set for near total reduction in carbon dioxide emissions in power production from a proposed 2035 deadline to 2025.
That aligned with the Alberta government’s position that the shorter timeframe was unattainable, but the province still critiqued the new plan.
“Ottawa has admitted defeat on their 2035 electricity targets,” said Alberta Environment Minister Rebecca Schulz. “But in the fine print, they are still pushing unconstitutional plans that will make electricity less reliable and more expensive.”
The Alberta government, along with Saskatchewan and Ontario, are challenging the federal government’s jurisdiction in court.
Tuchscherer also pointed to a scheduled federal election next fall as a source of uncertainty.
Mayor Linnsie Clark told the News that political change in 2025 could have major impact on the energy business. The city is continuing to study the business and regulatory case for reducing emissions, including a plan to add solar generation.
“My hope is that a more regional approach is taken (in federal regulations),” Clark told the News in a year-end interview this month. “Natural gas is a cleaner burning option- in southeast Alberta without hydropower (dams) or nuclear – than it is in Ottawa or Vancouver or Toronto. It’s not comparing apples to apples.
“In rural, mid-sized city Alberta, it’s a relatively good option.”
Top division officials said this fall they plan to operate the city’s gas-fired power plant for as long as possible, while exploring mitigating carbon output with capture and sequestration technology, hydrogen blending and potentially building portions of the Saamis Solar Park.
Energy committee chair Coun. Darren Hirsch said that beyond moving to “acquire the option” to buy the Saamis Solar proposal, the city has not approved spending in any direction.
This week’s change in timelines “alleviates some pressure to act right away,” he told the News. “No concrete direction has to be taken until we get all the facts.”
All potential options come with significant costs and, at this point, uncertainty, division head Rochelle Pancoast told council this fall, but also that inaction could be more expensive.
Therefore, she said, flexibility is the focus as planners await the outcomes of federal and provincial regulatory work.
Under this week’s announcement, the city’s two newest generators, the Units 16 and 17 added since 2018, comprise about one-fifth of the city’s total generating capacity of 299 megawatts.
They would be allowed to operate under existing rules until 2043 and 2047, respectively. As well, any new plants built by 2028 would also be grandfathered three years later than in an original draft.
Most of the Medicine Hat’s fleet of generators would come under regulations much sooner.
At the river-valley power complex, the city uses two combined cycle generators that include steam turbines, each with a top production of 60 megawatts and commissioned in the late 1990s.
Medicine Hat’s four other major units have in-service dates of 2003, 2006 (two units) and 2009, bringing the major compliance timeline early in the next decade.
They require carbon dioxide emission intensity based on per-unit power produced.
“In 2035, you’re allowed to have 65 tonnes per gigawatt hour and use some (offset) credit allowable, which is more flexibility on (Ottawa’s) part, but it’s still presents significant issues,” said Tuchscherer.
“We would need to find some way to abate our emissions to get down to that allowable limit.”
Reducing emissions would also save costs in terms of the provincial TIER levy on carbon dioxide emissions from industry.
The city expects to pay $12 million in fees for 2024, and a recent third party forecasts that to triple by 2035 as cost per tonne increases and allowable emission levels fall under the Alberta provincial program.
Another factor in the city’s CO2 reduction strategy is a provincial reworking in the electricity market (which would affect export income), that could be unveiled in late 2025.
A move to change rules governing the provincial transmission system will be discussed with industry stakeholders in early 2025.
