TransAlta, Capital Power and ATCO are the companies which own six coal-fired electricity units originally slated to operate beyond 2030.
Under the agreements, the companies will be offered transition payments for investments that have been reduced in value by the transition away from coal-fired generation.
Alberta Energy Minister Marg McCuaig-Boyd said: The government’s decision to provide transition payments to these companies demonstrates our commitment to building a low-priced, reliable, investment-friendly electricity system for Albertans.”
The electricity companies will be provided with annual payments until 2030. The payments will be funded by Alberta’s price on industrial carbon emissions.
The move is part of the government’s commitments outlined in November 2015 to phase out coal generation.
The Province’s Minister Responsible for the Climate Change Office Shannon Phillips said: “Alberta is by far the largest source of coal pollution in Canada, with greenhouse gas emissions that exceed the sum of every car from British Columbia to Manitoba.
“We are phasing out coal pollution in a measured, financially responsible way that will improve air quality and the health of Albertans.”
The agreements are regarded as a cost-effective path to cut greenhouse gas emissions, with the total payments representing less than $10/tonne of emissions reduced.
The Alberta government said that it will work with the companies, the Government of Canada and affected communities to explore options for the future, including coal-to-gas transitions, hydro-electricity and economic development initiatives.
Alberta Minister of Economic Development and Trade Deron Bilous said: “This announcement will allow our Advisory Panel on Coal Communities to proceed with their mandate, which is to create long-term transition plans for communities to succeed and workers to have opportunities as Alberta moves to phase out coal-fired emissions by 2030.”
