The Crown corporation completed its review of new federal regulations, deciding to give the go-ahead for the project.
Based on the new federal regulations, any natural gas generation project completed after Jan. 1, 2021, wouldn’t be subject to a carbon tax exemption unless they have zero emissions.
“Knowing by 2024 we need that 350 megawatts of baseload power, and really doing all the analysis, this was still the most cost-effective way to do so despite the fact the carbon tax would now be applied on the emissions,” Minister Responsible for SaskPower Dustin Duncan said.
“SaskPower went through a process over the last number of months, and crunched the numbers and still made the recommendation to their board and ultimately to government that this is the right approach.”
Duncan said they expect to pay an extra $350 million in regulatory fees due to emissions at the natural gas plant. It’s not yet known exactly how much the power station will cost, but estimates range from $700 to $800 million.
SaskPower didn’t see many other options but to move forward with their plans.
“They looked at importing power, that was one of the alternatives. Really, there are not a lot of alternatives in terms of baseload power,” Duncan said.
“Particularly, when conventional coal-fired electricity isn’t going to be possible beyond 2030.”
Duncan said the new plant falls in line with SaskPower’s strategy of reducing their emissions by 40 per cent by 2030.
“We’re in a process, over the last number of years and continuing forward, to add large scale wind to the system,” Duncan said.
“The plan all along was to pair wind with natural gas. We wanted to ensure we could still hit our targets.”
When complete, Mike Marsh, SaskPower president and CEO, said the plant will “generate enough baseload power for a city the size of Saskatoon.”
“Construction and operation of the plant will also provide economic opportunity in the Moose Jaw area, and we look forward to continued cooperation with the City of Moose Jaw in the coming years,” Marsh said.
SaskPower expects the project will create more than 500 jobs, and 25 permanent jobs once the plant is open.
“Moose Jaw is ready to take a significant step forward with this announcement,” Moose Jaw Mayor Fraser Tolmie said.
“It’s a testament to the optimism, persistence and hard work displayed by our economic development team at city hall over the last several months, and a testament to our city council for having the foresight to the southeast industrial park a key component of our city’s strategic plan.”
SaskPower started exploring location options in 2017, and with the decision to proceed, the next steps are being taken.
“SaskPower really looks at ‘where is the demand on the load coming from and where it’s projected to be?’ and certainly the Regina, Belle Plaine, Moose Jaw corridor looks to be an area of demand,” Duncan said.
The Crown corporation will submit a technical proposal for provincial environmental review, execute land and service agreements, and move forward with shortlisting qualified proponents to design and build the facility.