Ottawa's CO2 rules would hurt Alberta: TransAlta

CALGARY, Alberta (Reuters) - Canadian government plans to impose stringent new climate-change rules targeting coal-fired power plants would hit Alberta hardest and not necessarily cut carbon emissions sharply, TransAlta Corp's chief executive said on Thursday.

TransAlta CEO Steve Snyder, whose company runs Canada's largest fleet of coal-fired generation plants, he was surprised when Environment Minister Jim Prentice said this week that any new stations will require costly carbon-capture equipment and old ones would be replaced by other power sources.

"Does this impact Alberta? Of course it does. We have the largest percentage of coal-fired generation in Canada... We have it because we have this huge carbon resource, which is very valuable," Snyder told reporters after TransAlta's annual meeting.

"This is a very tough challenge to solve CO2 and not bankrupt the province and meet all of our commitments."

TransAlta has six coal-fired plants operating and under development in Alberta.

Prentice told the Globe and Mail newspaper that the moves, to be imposed later this year, would help Canada generate 90 percent emission-free power by 2025.

Any new coal plants will require carbon capture and storage technology, which is still unproven on a large scale.

TransAlta has proposed to add such equipment to one of its Alberta plants in a project worth about C$500 million ($420 million). It is awaiting Alberta government funding.

Prentice said old plants would not be replaced by coal-fired stations after they are depreciated and hit the end of their usefulness.