3 Options for meeting Alberta’s needs

Table of Contents
1 Introduction
2 Electricity in Alberta
3 Options for meeting Alberta’s needs
4 An overview of nuclear power
5  Nuclear fuel management
6 Nuclear safety
7  Nuclear electricity in Alberta
8 Nuclear regulation in Canada
9 Conclusion  

3.1 Overview
This chapter discusses the major options available to the Alberta marketplace in responding to the need for new supply outlined in Chapter 2. It provides an initial basis for comparing nuclear power. Details of issues specific to nuclear power are discussed in subsequent chapters.

This chapter provides context – it is not an exhaustive analysis of all available technologies.  And as Chapter 2 makes clear, the choice of which technology to pursue is made by private, investor owned companies, not government.

Each supply option has its pros and cons on the long list of characteristics that are relevant to evaluating its ability to supply Alberta’s needs. These include reliability, availability, cost, environmental impact, and so on. No single option is ‘perfect’ when all the criteria are considered. Some parameters, like the cost patterns over time (such as the difference between up-front and on-going costs) are more directly relevant for private investor-owned companies. Others, such as environmental impacts, have broad societal importance. However, all parameters have an impact on Alberta’s citizens as well as on electricity consumers in the province.  The following sections consider basic pros and cons of various supply alternatives.

3.2  Nuclear 
This section provides a high-level overview of nuclear power in order to compare it with other available technologies. The various aspects of nuclear technology and safety are discussed in detail in subsequent chapters.

TECHNOLOGY

• Nuclear power is based upon energy generated by fissioning (“splitting”) heavy elements such as uranium. This energy is transported away from the reactor to a conventional steam-generating thermal cycle. The nuclear fuel is either enriched uranium or, in the case of the Canadian CANDU reactors, un-enriched natural uranium.

ENVIRONMENTAL IMPACT

• Nuclear reactors do not have any carbon dioxide emissions when operating.
• On a life-cycle basis (‘Life-cycle” analysis considers all the environmental impacts of a facility, through manufacturing equipment, construction and installation, operations and eventual decommissioning), CO2 emissions from nuclear power are similar to those from wind power and are associated mainly with uranium mining and nuclear fuel production. These life-cycle CO2 emissions would be substantially reduced if modern enrichment technology is used. (See section 5.2.2)
• As with any thermal (steam-producing) plant, nuclear plants require water for cooling.
• Nuclear power plants have the smallest ‘footprint’ in terms of the amount of energy generated per hectare of land.
• Used nuclear fuel must be managed over long time periods to ensure that there is no leakage of radioactive material.

COST

• The upfront capital costs of building a nuclear plant are high. The nuclear fuel is low-cost and, because small amounts of fuel are required, variations in its cost do not affect operating costs to any great extent. Therefore, nuclear is best suited for large-scale generating units where the initial capital costs can be spread over many hours of low-cost operation.
• The cost of energy from nuclear plants typically ranges from 3.5 to 6.0 cents per kW.h.(IEA, 2005; ARC/INL, 2008; PSIRU, 2005)

OPERATING CONSIDERATIONS

• Nuclear plants have high capacity factors, meaning they are available to meet demand around the clock. Typically, availability for the latest generation of plants ranges between 90% and 95%.
• Nuclear units must be sited where there is cooling water. This affects planning for transmission facilities to connect them to the grid.

3.3 Supply options – fossil fuels

This section provides a high-level overview of major supply options using fossil fuels. Data for the various options is summarized in Table 1.

3.3.1 Coal - conventional

TECHNOLOGY

• Basic coal technology, using pulverized coal to produce heat that drives steam turbines, is well established in Alberta. The thermal efficiency of coal plants (i.e., the energy extracted per unit of fuel) has been increasing. Newer plants use ‘supercritical’ technology – in other words, steam at higher heat. ‘Ultra-supercritical plants’ have not yet been commercially proven, but would improve efficiency and reduce environmental impacts further.

ENVIRONMENTAL IMPACT

• Major environmental issues relate to air pollutant emissions, carbon dioxide emission, water use and coal extraction.
• Coal releases more CO2 than other forms of fossil fuel per MW hour of energy produced.
• As with any thermal (steam-producing) plant, coal plants require water for cooling.
• Coal for Alberta’s generating stations is extracted through surface mines. Land is taken out of service before being reclaimed and returned to agricultural or other uses.

COST

• The upfront capital costs of building a plant tend to be high. Coal’s cost benefits come from the abundance of Alberta’s sub-bituminous coal which provides inexpensive fuel. Therefore, coal is best suited for large-scale generating units (typically 400 MW and higher), since the initial capital costs can be spread over many hours of low-cost operation.
• Energy from conventional coal plants typically ranges from 6.3 to 6.4 cents per kW.h

OPERATING CONSIDERATIONS

• Conventional coal plants tend to have high capacity factors, meaning they are available to meet demand around the clock. Typically, availability for the latest generation of plants ranges between 85% and 90%.
• Coal units must be sited where there is a combination of fuel and water. This affects planning for transmission facilities to connect them to the grid.

3.3.2 Coal with carbon capture and storage

TECHNOLOGY

Today there are three main approaches to removing CO2 from coal-plant emissions.

• Pre-combustion capture in which CO2 is scrubbed from synthetic fuel (i.e., gas produced from coal or other carbon sources) during manufacture.
• Post-combustion capture in which CO2 is removed from flue gases after coal has been burned for power, using chemical absorption.
• Oxyfuel combustion in which purified oxygen is used to burn the coal. This process produces a highly concentrated stream of CO2 and water vapour.

The CO2 can then be injected into underground storage after the water has been removed.  This technology is currently in the advanced demonstration phase. It could be retrofitted on integrated gas combined cycle plants (See 3.3.3)

ENVIRONMENTAL IMPACT

• These technologies are capable of removing a significant proportion of the CO2 produced by burning coal. One potential concern is the long-term underground storage of carbon to ensure it does not re-enter the atmosphere or induce seismic activity.
• Mining and water use are similar to conventional coal.

COST

• Carbon capture and storage greatly increase the cost of energy from coal units, almost doubling it to about 11.9 cents per kilowatt hour (kWh).

OPERATING CONSIDERATIONS

• Conceptually, coal with carbon capture has similar operating characteristics to conventional coal.  However in all likelihood this new technology will experience operational hiccups as it is scaled to commercial levels.

3.3.3 Integrated Gasification Combined Cycle (IGCC)

TECHNOLOGY

• IGCC is a new technology that involves turning coal (or other sources, such as biomass) into a synthetic gas. The gas is then used in a two-stage process.  First, the gas is burned to run a turbine generator, then waste heat from this combustion generates additional electricity via a steam turbine.
• Relatively few IGCC plants are in operation worldwide at this time, although many new units have been announced.

ENVIRONMENTAL IMPACT

• As mentioned, IGCC plants can be fitted with carbon-capture technology. They are also more effective at removing other pollutants such as sulphur, nitrous oxides, particulates and mercury, so their overall environmental performance is better.
• Water use and mining impacts are similar to conventional coal.

COST

• IGCC plants are more expensive than conventional coal plants. However, it is less expensive to add carbon capture to an IGCC plant, so it can produce energy at a lower cost than a pulverized-coal burning unit with carbon-capture added. The cost of electricity from an IGCC plant without carbon capture is about 7.8 cents per kWh. With carbon capture, it is 10.3 cents per kWh.

OPERATING CONSIDERATIONS

• As with other technologies that are coal-based, IGCC plants need to be relatively large units (400 MW) and are better suited for meeting base load. As there are few units in commercial operation worldwide there will in all likelihood be operational hiccups as the technology is scaled to commercial levels.

3.3.4 Natural Gas

TECHNOLOGY

• Natural Gas Combined Cycle (NGCC) is a mature technology that also employs a two-step process to use waste heat. The use of natural gas for generation has grown substantially in Alberta and in North America over the past decade.

ENVIRONMENTAL IMPACT

• Natural gas has a higher energy content and lower carbon content than coal. In combination with the efficiency of the combined-cycle process, this means natural gas produces significantly less CO2 than coal technologies do.
• Its lower sulphur content and absence of mercury also make it a ‘cleaner-burning’ fuel. (However sulphur dioxide is emitted at the natural-gas processing stage.)
• Natural gas units require significantly less water than coal units.

COST

• Natural gas units are relatively inexpensive in terms of upfront capital costs. Their operating costs are driven largely by the price of natural gas, which tends to be more variable than the price of coal.  The cost of NGCC electricity, assuming natural gas priced at $7.10 per gigajoule, is 6.8 cents per kWh without carbon capture and 9.7 cents per kWh with carbon capture.

OPERATING CONSIDERATIONS

• The ‘on-off’ flexibility of  natural gas units has traditionally made this technology particularly useful in meeting peak load. Recently, natural gas-fired generation has been used more frequently to meet base load. However, cost considerations driven by natural gas prices may limit future developments to peaking applications.
• Natural gas units can be easily sited close to where the output is needed.

3.4 Supply options - renewable energy

Renewable energies are, by definition, sustainable and are also commonly considered to be CO2-neutral (although from a complete life cycle perspective they are not completely neutral). This section outlines considerations in using various renewable technologies for electricity generation.

3.4.1 Wind power

TECHNOLOGY

• Currently, approximately 500 MW of wind capacity is installed in Alberta, and applications for more than another 10,000 MW have been submitted.(GOA, 2008)
• Most planned or active wind projects target southern Alberta where wind energy is the highest.
• Alberta has a substantial potential for wind power.(IEA, 2005)

ENVIRONMENTAL IMPACT

• Wind power has no air emissions or water requirements.
• With older technologies, there is some evidence of impact on bird migration.
• Wind turbines may create ‘visual pollution’ issues related to siting in sought-after recreational, residential or tourist areas.
• CO2 is emitted during manufacture and transportation of turbines and associated equipment, and for the substantial amounts of concrete required in construction and installation of wind farms.

COST

• Cost of wind-generated electricity ranges from 4.6 to 14.4 cents per kWh.(IEA, 2005)

OPERATING ISSUES

• Individual wind units have a relatively low capacity factor, because wind speeds and availability vary.  So, for example, a 1-MW wind turbine is likely to be available, on average, 30 to 40% of the time.  This means it takes more than one MW of wind capacity to substitute for one MW of coal or natural gas capacity.
• Distributing wind farms over different geographic areas combined with effective wind forecasting could help offset this effect. This would require additional transmission and wind forecasting capacity.
• System operations and reserve capacity must be carefully planned to ensure continued reliability if wind energy is to contribute a more significant proportion of electricity.

3.4.2 Solar power

TECHNOLOGY

There are two different types of solar energy systems:

• Photovoltaic technology produces electricity directly from sunlight and is currently the most advanced solar technology. Solar panels can be mounted on tracking systems to increase their exposure to sunlight. Photovoltaics are appropriate for small off-grid distributed electricity generation.

• Concentrating solar power plants use reflectors to focus a large amount of sunlight in a small area to produce heat. Concentrating systems have increased dramatically in development and popularity worldwide. Unlike photovoltaic technology, concentrating solar power facilities are suitable for large-scale electricity generation, using solar energy to produce steam to drive power turbines.

As an example, a solar project under construction in California will produce 553 MW by 2011.(Abengoa, 2008)

ENVIRONMENTAL IMPACT

• There are no emissions associated with solar, except from a life-cycle perspective in the production and transportation of solar equipment.
• Solar power plants require a large footprint of land, generating less electricity per acre than fossil fuel plants.

COST

• The cost of photovoltaic and concentrating solar systems has followed a continuously decreasing trend, making them progressively more attractive on an economic basis. However, this trend line appears to have flattened out in recent years.(IEA, 2007)
• Solar energy currently costs approximately 20.9 to 74.3 cents per kWh.(ARC/INL 2008)
  

OPERATING ISSUES

• Alberta has large potential for concentrating solar power plants due to its natural endowment of high insolation values (hours of sunshine) – higher than Germany and France where solar applications have been increasing. The amount of solar energy available in Alberta varies widely by location in the province and season.
• There is also large potential in Alberta for photovoltaic-based distributed energy for residential and small commercial applications.(IEA, 2005)
• Solar energy is variable in its occurrence and requires storage and/or back-up generation.
• In Canada, solar energy is currently used mainly for small off-grid applications. This type of use has little impact on the transmission grid. However, as with wind power, a higher proportion of solar generation would require system planning and increased transmission capacity to ensure continued reliability.

3.4.3 Hydroelectricity

TECHNOLOGY

• Hydroelectricity currently contributes 900 MW to the Alberta grid.
• Forecasts suggest only moderate additions within the next 20 years, including 200 MW of small hydro before 2024.(AESO, 2005).
• Two significant projects are currently being discussed: a 100-MW project at the Dunvegan site on the Peace River (now in the approval process) and a 1200–1300 MW project on the Slave River.  However, both of these will have long lead times and the actual in-service dates, should the projects go ahead, are uncertain.

ENVIRONMENTAL IMPACT

• Hydro projects are emissions-free, except from a life-cycle perspective due to plant production, transmission and construction, and use a renewable resource. However, they may affect water regimes and fisheries significantly and may require flooding or affect downstream environments.

COST

• Hydro projects are capital-intensive projects, and upfront costs vary widely depending on the site and scale of the project.
• Cost of energy from hydro varies depending on the site.

OPERATING ISSUES

• Hydro units are ‘instant-on’ and so adapt well to being used as peaking units.
• Flexibility in siting is limited, and transmission must be built to reach the resource.
• Water flows vary seasonally and tend to be lower in winter, when demand for electricity is high.

3.4.4 Biomass

TECHNOLOGY

• Biomass-based electricity is fuelled by wood, agricultural residue, waste, or dedicated energy crops. There is increasing interest in using municipal waste as a source.
• Generation using biomass is generally most effective where the feedstock is readily and continuously available as an industrial/ agricultural waste stream, and where waste heat from generation can be recovered and used in manufacturing. (Such opportunities may exist, for example, in the forestry industry.)

ENVIRONMENTAL IMPACT

• Although biomass-fuelled electricity may be considered CO2-neutral based on the life cycle analysis of the feedstock, other emissions such as particulates and sulphur compounds are of concern.  Transporting feedstock generates emissions and, as with other generating technologies, there are emissions associated with equipment construction and transportation.

COST

• The current cost of biomass-fuelled electricity depends on factors such as the proximity and cost of feedstock source, scale, and grid accessibility.  Transporting low-value, low-energy-density feedstock is expensive if it is required.

OPERATING ISSUES

• Given the limits on feedstock availability, biomass units are likely to be relatively small additions to the grid.

3.4.5 Geothermal

TECHNOLOGY

• Alberta has moderate sources of hydrogeothermal energy in the Western Canada Sedimentary Basin as well as in the northwest portion of the province.(Majorowitcz, 2008)The resource in the northwest is located at greater depths (5 km) and the technology for using it is still at the demonstration stage.
• The promising sources identified are remote from any current demand for power or grid transmission lines.

3.5 Demand-side management

Alberta, like most electric systems, likely has potential to reduce or modify electricity demand in both the commercial and the residential sectors. ‘Demand-side management’ initiatives are aimed at modifying demand, thereby reducing the need for new generation capacity.  Various market-based planning and technology approaches have been used in other electric systems since the 1970s in order to reduce demand and/or shift it to times when there is excess generation capacity available. For example, through pricing and appliance timer technology, residential laundry demand can be shifted from peak-demand times of day to lower-demand periods overnight. The relative cost as well as the effectiveness of demand-side management programs depend on a large number of factors, such as electricity prices, the availability of substitutes and the specifics of implementation.(Loughran & Kulick, 2004)In general, higher electricity prices suggest more scope for demand-side management, as the higher prices provide more ‘room’ for alternative technologies and changing consumer behaviour.  This is one area of ‘supply’ in which government action, via policy or strategy, would be required in order to develop resources. For the most part demand-side management results from a government or regulatory agency policy or regulation and not from market initiatives.

Chapter 4>