TransAlta abandons Alberta carbon capture project

TransAlta has pulled out of Alberta's controversial carbon capture program claiming the economics are wrong.

TransAlta partnered with the province in Project Pioneer, one of four carbon capture projects planned for the province.

Alberta put up $400 million for the project, with the federal government putting up $370 more.

Project Pioneer was to take carbon from Keephills 3, a 450-megawatt coal-fired power plant west of Edmonton being built by TransAlta and Capital Power Corporation.

The carbon was to be used for enhanced oil recovery or stored in deep saline aquifiers.

Project Pioneer was a joint effort by TransAlta, Capital Power, Enbridge Inc., and the federal and provincial governments to demonstrate the commercial-scale viability of carbon capture technology.

The first step of the project was to study the technical and economic feasibility of carbon capture and storage before making any major capital commitments, said a news release. 

The study found that, although the technology works and capital costs were in line with expectations, the market for carbon sales and the price of emissions reductions were insufficient to allow the project to proceed.

TransAlta said Thursday the project doesn't make economic sense without a federal cap-and-trade system for carbon gases.

Chris Severson-Baker, with the environmental watchdog Pembina Institute, called the news disappointing but understandable.

Critics have complained the carbon capture projects are too expensive for unproven technology. 

Three other carbon capture projects, part of the province's $2-billion plan to reduce greenhouse gas emissions, are scheduled to go ahead.