Pipeline and power giant TransCanada Corp. says coal is still king in Alberta, but that building a nuclear power plant in Western Canada could be an option in the future.
“The way we look at it, nuclear is primarily an option for supplying electricity demand in Alberta, long-term,” said president and CEO Hal Kvisle following the company’s annual meeting last week.
“Does it make sense? Well, we have very large coal reserves, so you would have to weigh the merits of power generation from a nuclear source versus electric power generation from a coal source.”
TransCanada (TSX:TRP) is a partner in Bruce Power, which runs North America’s largest nuclear facility just off the shores of Lake Huron in Ontario.
Other partners include Cameco Corp., BPC Generation Infrastructure Trust, the Power Workers’ Union and the Society of Energy Professionals.
Speculation has abounded about the possibility of building a nuclear power plant in northeastern Alberta to feed energy needs of oilsands projects.
However, the operations need more steam than power, which most generate onsite, Kvisle said.
And Alberta’s abundant coal reserves make it the prime fuel source to produce electricity, despite increasingly stringent environmental regulations.
TransCanada has power plants in Canada and the United States, including power purchase agreements with coal-fired plants in Alberta.
Kvisle estimates costs to overcome carbon dioxide emissions will run into the
billions of dollars, but will be shouldered by the consumer in the long run.
“We’re optimistic that by and large the market needs the power and it will be possible to flow those charges through to the end consumer.”
Increasing costs are a theme across North America, and are taken into consideration on all projects, including the proposed Mackenzie Valley pipeline, he said.
Lengthy regulatory processes are adding some $600 million to the ambitious project and tacking on years of red tape for something that would take a quarter of the time in southern climes, he said.
“The biggest single uncertainty variable for us is what’s it going to cost to get through the regulatory process and what will the outcome be,” Kvisle said.
The project’s economics are questionable at current natural gas prices, but Kvisle maintains optimism it eventually will be completed.
“The Mackenzie is a really long-term initiative,” he said. “It’s important to TransCanada over the longer term that gas comes onstream and into our system, but whether it comes on in 2010 or 2020 is not critical.”
Of more importance to TransCanada is the completion of the 3,000-kilometre Keystone pipeline from Hardisty to U.S. refineries in Illinois, and the integration of its ANR pipeline acquisition, Kvisle said.