January 12, 2019 - Saskatchewan and Canada's government are expected to soon have a formal agreement in place regarding how long the province’s coal-fired power plants can remain online.
As it stands now, the province’s Shand Power station near Estevan could become a “stranded asset.”
News of an 'equivalency deal' between Saskatchewan and Ottawa could means the conversion of more of SaskPower's coal-fired plants to include carbon capture and storage (CCS) technology.
Photo by BryanSchlosser, Regina Leader-Post
Although Shand was built to last until 2042, the federal government’s regulations dictate coal-fired power plants must be closed by 2030.
“For Shand that means basically 12 years of a stranded asset. We made the argument that we should be able to continue to operate that plant,” SaskPower and Environment Minister Dustin Duncan said this week.
If the province retrofits the project with carbon capture and storage (CCS) capabilities, it will be able to stay online past 2030, as is the case at Boundary Dam 3, which already has CCS technology attached to it.
A U.K. based study done last year determined retrofitting Shand with CCS technology would be cheaper than previous projects, but would still cost somewhere around $1 billion.
“SaskPower is certainly going to do a more detailed look at what the cost would be. That’s a decision that’s really probably in the middle of the next decade, so we’re a fair number of years away,” Duncan said.
“It’ll have a number of factors that will be influencing that decision; the price of alternatives such as natural gas, the price of renewables, the ability to integrate renewables to a greater extent into the system, and of course the cost of not only building a CCS unit, but operating it for the long term.”
Already the province announced it does not plan to use the technology on Boundary Dams 4 and 5.
But following a 60-day consultation period which will end in February, Duncan said he “looks forward” to formally signing a new agreement that will extend the life of those plants.
Boundary Dam 4 and 5 were, under federal regulations, scheduled to close by the end of 2019. But under the new agreement, they will be able to stay open until 2021 and 2024 respectively.
Duncan said the agreement “helps SaskPower know what the future looks like.”
Estevan mayor Roy Ludwig echoed that sentiment, saying the eventual closure of those units will lead to around 100 jobs being lost. However, the extra time allows SaskPower to find other positions for employees affected by the closures.
He also expressed hope the province deploys CCS technology on Shand to “keep employment up.”
Prime Minister Justin Trudeau told reporters Friday it is important to phase out coal as an energy source.
He says the agreement with Saskatchewan shows support for the workers currently employed in the industry.
Under the tentative new agreement, the province commits to have at least 40 per cent of its electricity generation capacity come from non-emitting energy sources by 2030 and Saskatchewan’s greenhouse gas emissions from electricity producers will be limited to 175 megatonnes.
The province agrees to limit its electricity sector emissions to 33.5 megatonnes in 2019 and not exceed 64.5 megatonnes between 2025 and 2029.