The Canadian province of Alberta will pay three local coal power producers $1.36 billion over the next 14 years to compensate them for shutting down their plants early as part of the government’s climate change agenda.
The province will pay Capital Power Corp., TransAlta Corp. and ATCO Ltd. a total of $97 million per year, beginning next year and payable every year until 2030, to shut down six of their 18 power plants early, Alberta’s Energy Minister Marg McCuaig-Boyd said.
The remaining 12 coal-fired electric generating stations in the province are all scheduled to close, or convert to natural gas, before 2030.
The province added it is also wrapping up negotiations over power contract disputes that led to a controversial lawsuit, having reached three agreements with companies, though two are tentative.
Alberta’s climate change policy seeks to close all coal-fired plants in the oil sands-rich province by 2030, but six newer facilities were previously allowed to operate until as late as 2061, leading their owners to call for compensation.
The newer units are likely to be converted to natural gas co-generation plants, CBC News reports.
Energy consultant Terry Boston, hired to help Alberta with its transition away from coal, recommended the announced payments. He is also the main supporter of converting the newest coal-fired power plants into other kinds of facilities.
“That will provide jobs, both construction jobs and operating jobs, locally. Ultimately those jobs would not be as large as you would have for a coal plant,” he told CBC.
The payments are the latest announcement in a series of new initiatives unveiled this week detailing how the province is transforming its energy market.