* Gas-fired plant to replace coal-fired
* Would be TransAlta's largest gas-fired plant
* Costs not disclosed
CALGARY, Alberta, Nov 10 (Reuters) - TransAlta Corp (TA.TO) said on Wednesday it will build a gas-fired power plant at its Sundance complex near Edmonton, Alberta, capable of producing up to 800 megawatts of electricity.
The company, which runs coal, gas and renewable power facilities in Canada, the United States and Australia, said it taken initial steps towards regulatory approval for the proposed Sundance 7 plant, filing an interconnection application with the Alberta Electric System Operator.
The new plant will replace coal-fired facilities that the Canadian government has ordered phased out to cut the country's greenhouse gas emissions.
Dawn Farrell, the company's chief operating officer, said during an investor presentation that she expects the government will offer some compensation to coal-fired plant owners because of the planned new rule and TransAlta would use the money to build the new facility.
"TransAlta has begun preliminary engineering, design and environmental work to allow TransAlta to reinvest these recovered costs to build a state-of-the-art ... natural gas power plant."
Farrell said the new plant, which would be the largest gas-fired facility owned by the company, could take advantage of infrastructure already in place at the site 70 km (43 miles) west of Edmonton, where its coal-fired facilities produce 2,100 megawatts of electricity.
The cost of the planned Sundance 7 plant was not disclosed.
TransAlta shares rose 17 Canadian cents to C$20.77 by early afternoon on the Toronto Stock Exchange.
($1=$1 Canadian) (Reporting by Scott Haggett; editing by Rob Wilson)