REGINA – SaskPower says there will be no further retrofits to allow for carbon capture and storage at a coal combustion power plant in southeastern Saskatchewan.
The technology was introduced with much fanfare for $1.5 billion at the Boundary Dam power plant near Estevan in October 2014.
The goal was to reduce carbon dioxide emissions from the coal-fired plant by one million tonnes annually.
Dustin Duncan, minister responsible for Crown-owned SaskPower, says several factors led to the decision not to upgrade Units 4 and 5 at the Estevan plant for what is commonly called CCS.
Duncan says one reason is that the units are reaching their federally mandated shutdown and it doesn't make sense to invest a lot of money in them when natural gas is a cheaper option.
He also notes that the federal government is not helping to fund carbon capture technology at the units, which are to be phased out by 2024.
He says a study is underway to see if the Shand power station in Estevan would be a better fit for CCS upgrades.
Low natural gas prices a factor
“Low natural gas prices are a significant factor in this decision,” Duncan said as SaskPower held its annual meeting Monday.
“Certainly the outlook for the coming decades is pretty indicative that natural gas prices will likely remain low.”
SaskPower president and CEO Mike Marsh had already indicated last November that the Crown wasn't likely to support more carbon capture and storage projects due to costs.
Saskatchewan Opposition Leader Ryan Meili said it's the right decision, but suggested the government's lack of investment in renewables has put it in this position.
“They ran ahead with an idea, chasing a shiny private sector jewel, and as a result have wound up costing us billions,” Meili said.
Possible shut down
He pointed out that the government needs to reach an equivalency agreement on carbon emissions with Ottawa soon or the Boundary Dam units will have to shut down next year.
“Whether that's because of the way they managed the relationship with the federal government, or decisions on the federal end, we're now not getting any answers on an equivalency agreement,” the NDP leader said.
Duncan said he's unsure why federal Environment Minister Catherine McKenna is reluctant to sign a deal with Saskatchewan, which has a 40 per cent carbon reduction goal in electrical generation.
Carbon capture and storage takes carbon dioxide produced by burning fossil fuels and transports it to a storage site where it is deposited, usually underground, so it is not released into the atmosphere.
SaskPower had to pay $7.3 million in penalties to Cenovus Energy in 2015 because the Estevan plant wasn't operating enough to deliver all the captured carbon dioxide promised to Cenovus to use in enhanced oil recovery.
The Boundary Dam was forced offline several times that year due to technical and mechanical issues.
Then-premier Brad Wall touted Saskatchewan's carbon capture and storage technology at an international climate change conference in 2015.
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