The Keephills 3 development is expected to cost approximately C$1.6 billion ($1.36 billion) with construction due for completion by early 2011.

TransAlta and EPCOR will be equal partners in the ownership of Keephills 3, with EPCOR responsible for construction and TransAlta operations. Hitachi is to supply the power island.

Keephills 3 will emit 24% less carbon dioxide as four obsolete Wabamun units being retired by TransAlta by 2010, the company says.

Keephills 3 will be the best available technology economically achievable for use with sub-bituminous coal, however, both companies rejected gasification with carbon capture and sequestration, concluding that gasification-based power generation had not yet reached acceptable standards for reliability, cost competitiveness or operation.