Analysts predict that financial and technology risks may cause delays in Alberta carbon capture project

Capital Power’s decision to mothball Canada’s largest carbon capture and storage project at the Genesee power plant near Edmonton has sent shockwaves through the energy industry. The $2.4-billion project, which would have stored three million tonnes of carbon dioxide a year, has been canceled due to financial uncertainty and technological risks.

Analysts suggest that the decision by Capital Power may not be an isolated incident, as the economics of carbon capture and storage are proving challenging for companies. Sara Hastings-Simon of the University of Calgary points out that carbon capture adds costs to decarbonization strategies, raising questions about who will foot the bill.

Despite the setback, Capital Power CEO Avik Dey remains optimistic about the future of carbon capture technology. However, the company cited uncertainties around carbon credits, carbon pricing, and the cost of captured carbon as reasons for pulling the plug on the project.

The cancellation of the Genesee project highlights the challenges facing the industry as it seeks to reduce carbon emissions. With other carbon capture projects planned for Alberta, there are concerns about oversaturation in the market for carbon credits. Analysts suggest that government intervention may be necessary to support the development of carbon capture technology until it becomes commercially viable.

Overall, the decision by Capital Power underscores the complexities and risks involved in implementing carbon capture and storage solutions in the fight against climate change.