Saskatchewan Faces Tough Decision on Costly Boundary Dam CCS Plant

With a federal regulatory deadline looming, Saskatchewan is facing a tough choice: double down on the costly, not terribly efficient carbon capture and storage (CCS) experiment at its Boundary Dam power plant near Estavan, or shut down two aging coal-fired generating units and replace them with another, far less expensive electricity source.

At first glance, the C$14.7 billion the province stands to save by abandoning Boundary Dam should make the path forward pretty obvious.

But it’s a wrenching decision for the province where soon-to-retire Premier Brad Wall has questioned climate change, resisted setting a carbon price, and stubbornly touted Boundary Dam as an opportunity to pair coal power with CCS. The immediate catalyst is a mandatory federal deadline to reduce the province’s carbon emissions from power generation by 2025, either by attaching CCS to the two oldest of six coal-fired generating units at Boundary Dam or just getting them off the books.

The implications of the pending decision go beyond the Boundary Dam station, CBC News reports. More than a dozen coal-fired plants provide 40% of Saskatchewan’s power. To meet the new federal regulations, they must all match the CO2 emissions profile of combined-cycle natural gas-fuelled generation by 2025.

Another Boundary Dam unit is already equipped with the technology that captures carbon dioxide from its exhaust stream. Crown-owned SaskPower sells the captured gas to be pumped into oil wells, sequestering the CO2 and pushing additional crude to the surface. The facility has been hailed as a pioneering example of CCS technology, criticized for its cost, and derided as a carbon shell game and massive fossil subsidy that can’t even meet its contractual obligations. [Hey, but otherwise, no problem, right? – Ed.]

Equipping all of Saskatchewan’s coal plants with CCS technology would cost the province around $17 billion, according to ecological economist Brett Dolter, who is studying the comparative cost of the different energy paths available to the province. Replacing them with natural gas plants would cost a mere $2.7 billion.

Based on the levelized cost of electricity from Boundary Dam’s CCS-equipped unit—about $140 per megawatt hour—the power generated from the CCS-equipped coal fleet would also be more than twice as expensive as electricity from natural gas.

And even then, it’s doubtful whether the expensive effort would even meet the mandated reduction in emissions.

Achieving the federal regulatory standards, CBC writes, would mean reducing CO2 emissions per gigawatt-hour of electricity by 62%. But Boundary Dam’s existing CCS system has managed to capture only about 46% of emissions from the unit where it has been operating since January 2015.

The looming decision regarding the two oldest Boundary Dam units—commissioned in 1959—will serve as a bellwether for the province’s intentions for the rest of its coal plants. However, the choice is politically fraught, with implications for about 1,100 people currently working in coal mines and transportation in the province.

“The end of coal in Saskatchewan would mean the end of these jobs,” Dolter told CBC.

The outlet’s report does not examine the offsetting number of jobs that could be created by Saskatchewan’s commitment to source 50% of its electricity from renewable sources by 2030. A study has suggested that building out renewable energy generation could produce as many as 15,000 job-years of employment in neighbouring Alberta by that date. That province has also committed $40 million in transition dollars for the workers and communities affected by its decision to phase out coal-fired generation by 2030.

SaskPower is expected to recommend to the government by the end of the year whether it should expand CCS or begin to step away from coal. No final decision is likely, however, before the governing Saskatchewan Party chooses a new leader to replace Wall in late January.