Sparks fly over two plans for waterfront power station
JOHN BARBER
globenandmail.com
The provincial government took an unexpected pasting in the city's hottest propaganda battle last Friday when Toronto Hydro and its U.S. partner unveiled an unexpectedly strong proposal for an alternative to the giant power plant the McGuinty government is attempting to shove down the waterfront's throat.
Until this week, it looked as if any damage the government might suffer as a result of its decision to build the Portlands Energy Centre (PEC) would be confined to lefty Riverdale, which has never supported the provincial Liberals anyway. The government knew it was ruining the chances of former journalist Ben Chin, the Liberal candidate in the coming by-election in Toronto-Danforth, but so what? It wasn't likely to win the seat in the best circumstances.
This week, however, that complacent logic has collapsed.
On the face of it, the Toronto Hydro proposal answers every one of the objections cited by the government as reasons not to consider it. It promises all the required power at significantly lower cost than the favoured PEC without despoiling the waterfront -- all the while delivering $30-million in community benefits. And the question of why the government would reject that alternative in favour of the unpopular and expensive PEC is resonating far beyond the boundaries of Toronto-Danforth.
Yesterday, even Progressive Conservative Leader John Tory got into the act, accusing the government of having "seriously interfered with the bidding process" and demanding that it re-tender the power-plant contract in light of Toronto Hydro's unofficial bid.
Last week, the province and PEC said it was impossible to retrofit the abandoned Hearn plant to accommodate new generation, and even organized a media tour to dramatize the old plant's inadequacies and justify their desire to build a huge new one right next door.
But Toronto Hydro and its partner, Constellation Energy, a company with 12,000 megawatts of power-generating capacity in the United States, says that reusing the Hearn plant is no problem.
Last week, provincial sources warned that it would cost $20-million to $40-million to buy out the existing lease of the old plant. However, Toronto Hydro and Constellation revealed that they have "executed a definitive agreement" with the lessee to restore the plant for the purpose of generating electricity.
Last week, the cost of a 550-megawatt power plant on the waterfront was said (by the province) to be $700-million. It is now said (by Toronto Hydro and Constellation) to be $565-million.
Last week, the Toronto Hydro proposal centred on a smaller generator coupled with aggressive conservation initiatives to limit excess demand.
Now, the proposal includes the flexibility to install all 550 megawatts inside the Hearn plant if those initiatives -- which remain integral to the plan -- fail or fall short.
Last week, the latest proponents were hobbled by an earlier request they made to be released from the environmental-assessment process. But they say they will be able to meet the government's tight construction schedule while undergoing the full process.
The Toronto Hydro-Constellation proposal deserves consideration on the basis of physical design alone, which spares the industrial conversion of another 11.3 hectares of what should be prime waterfront real estate.
The PEC proposal not only gobbles up the extra land, it leaves the Hearn plant derelict, effectively doubling the new plant's footprint. This is why the normally quiescent waterfront corporation has come out against it.
But the proposal is also attractive because of its strong reliance on conservation and its declared sensitivity to local concerns.
By contrast, the PEC plan ignores the community, the waterfront and conservation in its pursuit of the most megawatts at any cost. And the cost differential between the two proposals is striking.
To its surprise, the province now finds itself gambling with far higher stakes than it ever intended to do. What's needed is a face-saving compromise that will allow it to reconsider the bet.
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As the city grows and demand for power increases, even with the most aggressive conservation methods, there will be a need for more power generation. I suspect the Hearn plant will be converted to 'clean coal burning' in the future as price for coal drops and natural gas goes up.
Coal may be in vogue again
Feb. 14, 2006
TYLER HAMILTON
BUSINESS REPORTER
thestar.com
Alberta's Energy Minister Greg Melchin believes coal, whether we like it or not, is poised to become the most important fuel in Canada's future.
And he's not reluctant to say that in Ontario, where the government has vowed to shut all coal-fired plants by 2009. And where the Ministry of Energy estimates nearly 700 people a year die from pollution caused by coal plants, and where more than 300,000 suffer illnesses.
"clean coal" — an umbrella term for a variety of technologies and power-plant designs that promise to take the dirtiest and most abundant fossil fuel on the continent, clean it up and turn it into low-emission electricity.
North America has roughly 250 billion tonnes of recoverable coal reserves, accounting for about a quarter of worldwide reserves. As global demand for energy skyrockets, boosted by spectacular economic growth in India and China, there's a growing movement to make coal a cheap, secure, domestic and environmentally acceptable alternative to nuclear power and increasingly expensive natural gas.
"The coal plants that appear in the next decade or so will be unrecognizable to those familiar with their ancestors," says The Thinking Companies Inc., a Maine-based energy-consulting firm that argues coal is back in fashion. Modern coal plants, based on designs from General Electric Co., ConocoPhillips Co. and Royal Dutch Shell PLC, will be "clean, highly efficiently facilities able to produce electricity with perfect reliability at low cost," the report asserts.
Many challenge the claim, calling the term "clean coal" an oxymoron, but by all accounts the coal renaissance has begun:
Alberta Premier Ralph Klein told energy executives last month that he was a "coal guy" at heart. He hinted he will use his annual TV address to Albertans this month to outline a plan, involving clean-coal technologies, to unlock value from the province's massive reserves.
A group of coal producers and power generators called the Canadian Clean Power Coalition has plans to build a $1.5 billion clean-coal demonstration plant by 2012. And, George W. Bush's proposed 2007 budget has earmarked $285 million (U.S.) for research and development into coal technologies and another $54 million for FutureGen, an initiative to build the world's first zero-emission fossil-fuel plant based on coal.
Some American states, such as New York and Pennsylvania, have more aggressively embraced clean coal by setting up special investment funds, establishing incentives and offering low-cost loans to spur development of new technologies and power plants.
Meanwhile, French-based power equipment giant Alstom SA recently reported that the coal industry will account for the lion's share of its power generation equipment sales over the next 10 years, representing 40 per cent of the market compared with 35 per cent for natural gas and even less for nuclear.
Executives with the company said clean coal advancements are making the fuel more attractive to many countries, particularly China, which will need to build hundreds of new coal plants over the coming years and at the same time manage a worsening environmental crisis.
Ontario is moving in the opposite direction. The Lakeview Generation Station in Mississauga has been shut and three more coal-fired plants are to close next year. The massive 4,000-megawatt Nanticoke plant on Lake Erie is to be shut in 2009 if the government can stick with its schedule.
But even in Ontario, some observers say it's premature to write Old King Coal's obituary.
"Within a 20-year time horizon I suspect it could come back again," says Jan Carr, chief executive officer of the Ontario Power Authority. "What won't happen is setting fire to coal in boilers and making steam the way we do right now. The difficulty with coal is not that it's coal; it's that the particular way we're using it has a lot of very negative side effects."
Carr says the government's position is a wake-up call to an industry clinging to the status quo.
The Power Workers' Union, for example, argues that existing coal plants in Ontario can reduce smog-causing sulphur dioxides and nitrogen oxides, as well as mercury emissions, by retrofitting facilities with better catalytic and "scrubber" technologies wrapped under the "clean coal" banner. The union says the province could save $11 billion by going this route instead of building new natural gas plants.
But Carr says the approach, which the Ontario Clean Air Alliance claims would reduce emissions from the province's coal plants by only one-half of 1 per cent, isn't new and isn't really what clean coal is about. "They need to get their act together on their terminology."
In energy circles, clean coal is much more ambitious and involves an entirely new way of extracting energy from coal, as demonstrated by the handful of Integrated Gasification and Combined Cycle plants built in Europe, Japan and the United States in the past decade.
These modern facilities use high temperatures and extreme pressure to convert coal into a hydrogen-rich synthetic gas. Throughout this chemical bond-breaking process, a system of filters and scrubbers removes contaminants, while activated carbon is used to capture mercury. Carbon dioxide (C02) is also easily separated from the gas, which is eventually burned in a power-generating turbine, much like natural gas.
And like most advanced natural gas plants, clean-coal "gasification" plants operate on a more efficient combined cycle, meaning waste heat from the process is used in a steam turbine to produce even more electricity.
Ideally, the goal is to reduce coal-plant emissions enough to make them environmentally competitive with natural gas. In Ontario this is often referred to as the Witmer Standard — in reference to former environment minister Elizabeth Witmer, who said the criteria for letting a coal plant in the province stay open is that it must meet the emission standards of a natural-gas plant.
"The government should subject all proposals for so-called clean coal to the Witmer Standard," urges a recent report from the Ontario Clean Air Alliance.
But even if the Witmer Standard can be met, clean coal isn't without its risks. For one, the technology is still relatively unproven and, while the power authority recognizes costs will fall 90 per cent as the design becomes more widespread, being a first mover comes at a significant financial penalty. This includes the kind of construction delays and cost overruns typically associated with nuclear.
Also, the appeal of a clean-coal facility is based on the assumption that coal will remain cheap and natural gas prices will continue to rise. But the cost of coal has more than doubled over the past two years, and while still much cheaper than natural gas and oil, some wonder whether the migration to clean coal will push prices much higher over the next decade.