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SaskPower not moving ahead with further carbon capture projects at Boundary Dam 4 and 5

SaskPower's carbon capture and storage facility at Boundary Dam 3 near Estevan.
SaskPower's carbon capture and storage facility at Boundary Dam 3 near Estevan. Adrian Raaber / Global News

SaskPower will not be moving ahead with retrofitting Boundary Dams 4 and 5 (BD4 and BD5) with carbon capture and storage (CCS) according to their annual report. The Crown corporation says that retrofitting the two aging facilities just outside of Estevan is not practical any more, as both are nearing retirement.

“Units 4 and 5 at Boundary Dam are smaller units in our fleet and are rapidly approaching the end of their useful lives,” SaskPower CEO Mike Marsh said.

Based on federal regulations, both coal-fired power plants are slated to be shut down by the end of next year. Even if the Saskatchewan government and federal government sign an equivalency agreement, which would see the lifespans of coal-fired plants extended until the end of 2029. BD4’s lifespan ends on 2021 and BD5’s end date is 2024 with the agreement.

Marsh added that the lower cost of natural gas means it is a better area of investment.

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“This was the decisions that ultimately made sense for 4 and 5. Again, there may be a different decision when it comes to different units, but for 4 and 5 this was the decision that ultimately made the most sense,” Minister Responsible for SaskPower Dustin Duncan said.

READ MORE: Over 2M tonnes of CO2 captured by Boundary Dam CCS project: SaskPower

The eventual closure of these power plants will result in the loss of 40 jobs. SaskPower does not anticipate any layoffs and expects these workers will be able to move to other positions in the company.

It cost $1.5 billion to retrofit Boundary Dam 3 with CCS technology. Since then the government has touted its leadership in investing in this kind of technology. Since operations began in 2016, the facility has removed just shy of 2.2 million tonnes of carbon dioxide from the atmosphere.

The potential addition of CCS to BD4 and 5 has long been a subject of discussion in both SaskPower and the government.

READ MORE: Carbon capture operation and maintenance costs grow by nearly $15M in four years

Shand Power Station

Both Duncan and Marsh said that despite the decision not to go ahead with the retrofit, it does not mean the end of continued CCS investment in the province.

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A feasibility study is taking place at the CCS Knowledge Centre on the University of Regina campus concerning to possibility of retrofitting the Shand Power Station with CCS.

Also located in Estevan, Shand is another coal-fired power plant that generates 276 megawatts of power. That power plant’s lifespan sees it operating until 2029, assuming an equivalency agreement is reached with Ottawa.

Head of technical services at the CCS Knowledge Centre Corwyn Bruce said that their final report on the first level of feasibility for potential CCS expansion will be ready early fall 2018.

Among the centre’s findings include evidence the cost of CCS technology is declining.

“As with any second generation, cost reductions are expected. We talked earlier of having a cost reduction of 30 per cent from the study,” Bruce explained.
“What we’re finding is there will be significantly deeper cost reductions than 30 per cent.”

Based on this model, it appears retrofitting Shand would be more cost effective than BD4 and BD5.

The centre said that while the technology is more affordable they cannot yet say if retrofitting Shand will be cheaper than the $1.5 billion BD3 project. Shand is twice as large, so that will also come into play when determining a projected cost.

The centre estimates a CCS facility at Shand would be able to capture 2 million tonnes of CO2 annually.

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That estimate will be part of the public report, which is expected to be published this fall.

Once a business case is out, Opposition leader Ryan Meili said it will be worth looking at but must be compared to other projects.

“The way that BD3 was run into in such an aggressive fashion without doing that proper homework on the business case, and the lost opportunities that have sunken over a billion-and-a-half dollars into that project, instead of what we could have done with that investment into renewable energy, that was a real missed opportunity and a huge mistake,” Meili said.

Duncan said that CCS will continue to be part of Saskatchewan’s green energy goals.

Broader Clean Energy

On the equivalency agreement front, Duncan said Saskatchewan has sent further information to Ottawa in the last two weeks that is expected to clear up questions on the province’s plan to achieve up to 50 per cent renewable power generation by 2030. This plan also includes a goal of reducing emissions by 40 per cent of their 2005 levels.

Under this agreement, Shand would be decommissioned in 2029. Marsh said that will also play into emission targets.

“There’s a significant reduction in CO2 emissions from that step alone. So we don’t necessarily need to put in as much renewable capacity to meet that emissions target,” Marsh said.

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“That’s good for all of us because it helps keep rates low.”

The Crown corporation said the 2030 clean energy goals are on track. Next year they anticipate the first 10 MW utility scale solar plant to come online and award a 200 MW wind farm contract, among other initiatives.

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