January 10, 2019 6:00 pm
Updated: January 11, 2019 6:42 am

Saskatchewan reaches agreement with Ottawa to cut power-generation emissions

WATCH: The province and federal governments have come to terms on an equivalency agreement that will see Saskatchewan mostly move away from coal by 2030. David Baxter reports.

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Saskatchewan and the federal government have reached an equivalency agreement that will see the province’s coal power plants mostly go offline by 2030.

The agreement was first publicized in the Canada Gazette on Dec. 29, 2018 and is currently in a 60 day public comment period. Pending unforeseen changes, Saskatchewan Environment Minister Dustin Duncan expects to sign the agreement early this year.

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Federal regulations dictate a nationwide shift away from coal-fired power by 2030, and these agreements have been reached with other provinces like Alberta and Nova Scotia.

The Saskatchewan negotiations had been held up due to uncertainty around the future of the Shand Power Station near Estevan. That plant’s lifespan was expected to last until 2042.

“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,” Duncan said.

Duncan added the province pushed for “wiggle room” on Shand because it is already in operation and being paid for by ratepayers.

However, there is a way the power station could continue operating once the agreement is signed – if Shand is retrofitted with carbon capture and storage (CCS) technology.

“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.”

Boundary Dam Three near Estevan will be able to keep running past 2030, thanks to its nearly $1.5 billion CCS retrofit. This facility has no projected end-date, due to the presence of the CCS retrofit, and ability to implement further upgrades.

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

A study from the CCS Knowledge Centre at the University of Regina suggests second-generation technology will be cheaper.

“I’m not sure it’s wise or not, a lot of it’s going to depend on cost of retrofitting Shand and Poplar River into the CCS mode,” SaskPower critic Cathy Sproule said.

“We won’t know for several years, I think even 2024 before they decide whether Shand will be retrofitted or shutdown.”

This agreement does extend the lifespan of two plants, Boundary Dams Four and Five. Before the agreement, federal regulations would have seen these plants decommissioned by the end of this year. Now they can operate for the rest of their lifespans, 2021 and 2024 respectively.

“It does give a little bit more certainty for those people that are employed there and it helps SaskPower know what the future looks like,” Duncan said.

Emission targets

Saskatchewan’s coal-fired power plants are expected to produce fewer emissions heading into 2030. In the lead-up, there is a sliding scale of more stringent emission targets, which can result in financial penalties if missed.

“What we’re looking for, and what I think the equivalency agreement will achieve, is the ability to look at our [power plant] fleet on a fleet-wide basis rather than just individual facilities,” Duncan said.

READ MORE: Manitoba no longer using coal for power

What this means is facilities that exceed targets can be offset by performance credits earned at other facilities, or the growing fleet of renewable power SaskPower is building over the next decade.

Green energy

SaskPower’s plan to achieve up to 50 per cent renewable power generation by 2030 is shored up with performance targets outlined in the agreement.

SaskPower renewable energy targets outlined in the equivalency agreement.

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Currently, about 25 per cent of SaskPower’s generating capacity comes from renewable sources.

SaskPower has awarded a number of approvals for wind and solar projects in recent months. The Crown corporation opened a proposal process for a second 10-megawatt solar project on Jan. 10.

Sproule said that work behind the scenes at SaskPower to achieve these goals has been discussed at a number of government committee meetings, and it is encouraging to see Ottawa further recognize the plan.

“It’s unfortunate that’s it’s come down to the wire basically, because it’s been a whole year for these negotiations taking place, but it looks like the federal government has finally accepted the work that SaskPower’s been doing, so I say kudos to SaskPower and the hard work that they’ve done,” Sproule said.

Global News reached out to federal Environment Minister Catherine McKenna’s office for comment. A response was not given by deadline.

© 2019 Global News, a division of Corus Entertainment Inc.

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