Carbon capture plan faces doubts after $2.4-billion project cancelled

Capital Power Corporation Scraps $2.4 Billion Carbon Capture Project

Introduction

Capital Power Corporation CPX-T has announced that it is no longer pursuing a proposed $2.4 billion carbon capture and storage project at its Genesee natural gas-fired power plant. This decision deals a blow to Canada’s efforts to reduce emissions from industries that produce or heavily use fossil fuels.

Reasons for Discontinuing the Project

The Edmonton-based power generator stated in its quarterly earnings report that the project is not financially viable. Despite confirming the technical viability of carbon capture and storage (CCS), Capital Power determined that the project does not work economically at this time.

Implications for Sustainable Development Goals

This decision raises questions about the future of carbon capture investments being considered by other heavy emitters and has major implications for Canada’s ability to achieve its national climate-change goals, including net-zero greenhouse-gas emissions by 2050. The country has relied on CCS technology to catch carbon emissions and prevent them from entering the atmosphere.

Challenges with Government Funding

The decision by Capital Power is partly due to tensions between industry and the federal government regarding the use of public funds to provide revenue certainty for decarbonization projects. The company had expressed disappointment with the pace of negotiations with the Canada Growth Fund, which offers revenue-certainty tools known as carbon contracts for differences (CCfDs).

Financial Assurances and Revenue Volatility

Capital Power and other proponents of carbon capture have argued that additional financial assurances are necessary from the government due to the high operational costs and lack of a reliable revenue stream for CCS facilities. The uncertainty surrounding the establishment of a robust credit-trading market and potential changes in government policies have hindered investment in carbon capture projects.

Furthermore, factors such as revenue volatility related to Alberta’s electricity market restructuring and higher interest rates have contributed to Capital Power’s decision that the project is not financially workable.

Future Prospects and Advocacy for CCfDs

While Capital Power has discontinued its project, other heavy emitters, such as Heidelberg Materials, are still engaged in active negotiations with the Canada Growth Fund. Carbon-capture advocates argue that governments need to provide more confidence to emitters that these projects will be financially viable. They call for the implementation of a broader CCfD program to support carbon capture initiatives.

Last month’s federal budget hinted at enhancing the Canada Growth Fund’s capacity to offer CCfDs, but as of now, the fund has committed less than $1 billion.

Debate on Carbon Capture Technology

The cancellation of the project has sparked debate among environmental groups. Some express dismay at the loss of a potential carbon capture deal, while others argue that carbon capture is an impractical solution and that governments should focus on replacing fossil fuels rather than abating their emissions.

Environmental Defence Canada stated that carbon capture is unnecessary, ineffective, and expensive, emphasizing the importance of preventing carbon dioxide emissions in the first place.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 13: Climate Action

The issues highlighted in the article are related to reducing emissions from industries that produce or heavily use fossil fuels, achieving climate change goals, and the financial feasibility of carbon capture projects. These align with SDG 7, which aims to ensure access to affordable, reliable, sustainable, and modern energy for all. SDG 9 focuses on building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation. SDG 13 addresses the urgent need to take action to combat climate change and its impacts.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7.2: Increase substantially the share of renewable energy in the global energy mix.
• SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.

The article highlights the need to reduce emissions from industries heavily reliant on fossil fuels. To achieve this, increasing the share of renewable energy in the global energy mix (SDG 7.2) is crucial. Additionally, upgrading infrastructure and retrofitting industries to make them sustainable (SDG 9.4) is necessary to reduce emissions and promote clean energy solutions. Integrating climate change measures into national policies, strategies, and planning (SDG 13.2) is also essential to address the challenges posed by climate change.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Percentage of renewable energy in the global energy mix
• Investment in sustainable infrastructure and industries
• Inclusion of climate change measures in national policies and planning

The article does not explicitly mention specific indicators, but the following indicators can be used to measure progress towards the identified targets. These indicators can be tracked to assess the transition to renewable energy, the level of investment in sustainable infrastructure and industries, and the integration of climate change measures into national policies and planning.

Table: SDGs, Targets, and Indicators

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Fuente: theglobeandmail.com

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