Alberta has struck a deal with three major power producers to formally phase out coal-fired power by 2030.
Environment Minister Shannon Phillips says the province will pay three major power producers a total of $97 million a year over the next 14 years.
The money is to compensate them for the early shutdown of six coal plants and to help them transition to cleaner forms of energy.
Phillips said subsidizing carbon capture and storage would be much more expensive.
“It would require a government subsidy more than ten times the price of phasing out all these coal units,” Phillips said.
The minister said taxpayers will not shoulder the cost of the deal. Instead the cash will come from the current carbon levy on heavy emitters.
The payments will be split between TransAlta, Capital Power and Atco Energy.
The government also announced that it has reached a settlement with Capital Power on its litigation associated with Power Purchase Agreements.
Tentative agreements have been reached with AltaGas and TransCanada.
“We have never blamed these power companies for taking advantage of the mistakes that the former Conservative government made,” said Deputy Premier Sarah Hoffman. “The blame lies squarely on the former government, a government that had lost their way, a government that had forgotten who they work for.”
There are currently 18 coal-fired power plants in Alberta. All but six were scheduled to shut down before 2030. That’s the timeline the province has set to bring an end to coal-fired electricity.
As part of the deal, the power producers will keep their headquarters in Alberta, continue to invest in the province and will provide support to communities impacted by the transition.