The Boundary Dam Carbon Capture and Storage project is a technological marvel, but it’s one that has burdened southeast Saskatchewan and SaskPower both financially and environmentally, according to experts who submitted a 24-page report from the Canadian Centre for Policy Alternatives of Saskatchewan.
“Reliance on fossil fuels is not a secure future for Estevan,” said Mark Bigland-Pritchard, an independent consultant in energy, environmental assessment and sustainable building, who is one of the authors of the CCPA’s report on the carbon capture facility at Boundary Dam.
The glaring issue that’s caught the attention of skeptics is the financial stress SaskPower now faces as a result of the $1.4 billion project, stress that will likely trickle down to residents who will have to pay higher electrical rates to assist with the economic burden that comes with Boundary Dam’s additional units being converted to CCS.
The report estimates costs of electricity at “12-14 cents per kilowatt hour and rising.”
Mike Monea, President of Carbon Capture and Storage Initiatives for SaskPower, said in a press conference the day after the CCPA report was released, that future units adopting CCS technology will be cheaper and more efficient.
Emily Eaton, an associate professor at the University of Regina who specializes in natural resource economies, said future CCS initiatives may be cheaper, but when the one million tonnes captured amounts to only about seven per cent of all greenhouse gas emissions created by SaskPower’s coal-fired generation, alternative options should be looked into that make more significant cuts to GHGs.
“Could we improve the technology? I’m sure we can, but it’s a matter of where we want to spend our money and energy,” she said. “Are we concerned at all about global climate change?”
The seven per cent of emissions captured by BD3 is less than two per cent of the province’s total GHG emissions.
In addition, SaskPower’s projected return for 2014 will be 1.3 per cent ($27 million in profit); as opposed to the 8.2 per cent return on equity it had in 2013 ($114 million in profit). The company is now running with a $5.5 billion debt and would have to retrofit Boundary Dam 4 with CCS technology in order for it to reopen, which according to the report, SaskPower closed in 2014. That will cost at least another $1 billion. Combined with the aging infrastructure SaskPower has attributed past rate increases to, Pritchard said he was surprised that such a gamble was made with CCS technology.
“SaskPower is going to have to be very careful on what it spends money on,” he said, adding significant spending will be required to replace the electrical grid, an initiative which should have been given priority over CCS.
The alternatives
A new grid, Pritchard said, cannot be swept to the bottom of the to-do list, either.
“Because the rate of increase in demand that SaskPower is projecting is so phenomenally high, they’ll need to put in new infrastructure to deal with it.”
Reduction in grid reliability is a popular criticism surrounding the alternative option SaskPower turned down in 2011; the $355 million, 177 megawatt (MW) Chaplin wind farm. The report highlighted the cheap price of wind and that when compared to wind, coal is about $300 million more expensive over 20 years. The introduction of renewable energy sources like wind, however, would provide southeastern Saskatchewan with a unique opportunity to reorganize its grid more efficiently.
“The current way of running a grid doesn’t work for significant amounts of renewables,” Pritchard said.
In order to integrate wind, and potentially solar, with an electrical grid, Pritchard said it will be necessary to rearrange the grid by moving away from the traditional “baseload,” “intermediate” and “peaking” power sources.
The grid’s new functionality would include power coming from various sources like wind and solar with dispatchable power that can be brought online and offline quickly. The dispatchable power would fill gaps and would largely be composed of a variety of gas options, also referred to as temporary “bridge fuel” options.
“That would be short-term, and hopefully we could over time move to gas from biological origins,” Pritchard said.
Pritchard noted how Denmark and Germany’s emphasis on reducing GHGs have resulted in a significant number of alternate energy facilities, which are heavily composed of wind farms.
The CCPA’s report stated that wind makes up 40 per cent of Denmark’s total energy creation and with the help of smart grid technology, it allows for various energy sources to co-exist.
The implementation of renewable energy sources in southeast Saskatchewan would create new jobs, which Pritchard emphasized, would be much cleaner.
Eaton said farmers who rent out their land for wind farms could potentially look forward to alternate compensation options as well that may rival those offered by drilling companies.
Cathy Sproule, NDP MLA for Saskatoon Nutana, has opposed SaskPower’s implantation of CCS technology and said many other companies across the world have “abandoned” the idea of retrofitted coal-fired power plants.
“It just seemed like a strange turn in 2011 to make this decision in the face of all the other evidence that says this is a very expensive way to deal with carbon,” she said.
Sproule noted how the United States completely abandoned CCS technology, which was confirmed by multiple news outlets on Feb. 5.
“If this is so progressive and world-leading, why is the United States pulling out of it,” she said.
Among the ongoing environmental concerns that come with coal-fired power plants, like mercury emissions, occupational risks such as respiratory hazards and community health risks like asthma and cancer, the CCPA report also mentioned the political motivations behind the CCS project.
According to an article from Pipeline News, Premier Brad Wall had to “convince a SaskPower board committee to support the CCS project,” which hints at some reluctance from SaskPower in 2011 when the various options were being weighed.
SaskPower does not own the capture technology, making it difficult to estimate the amount of potential revenue it accumulates over time outside of the captured CO2 that is being sold to Cenovus at an estimated $25 per tonne.
Pritchard said that any progress toward renewable energy sources would not happen over-night, but increased emphasis needs to be placed on climate change at the political level, which would create a foundation and also eliminate the not-in-my-backyard-attitude that is often associated with the introduction of clean energy.
“Our infrastructure is old anyway … a new grid would cost about the same as maintaining our old one,” he said.
Pritchard, however, did not ignore the technological achievements attained by BD3.
“Credit needs to be given where it’s due and there is every reason for engineers to be proud of the work they’ve accomplished,” he said. “Unfortunately, CO2 levels are already too high and Estevan could benefit greatly from renewable options.”
The CCPA report said that CCS may become an important component for future pipelines and refineries, but is ultimately “far too expensive for coal-fired plants to adopt.”
