The announcement wasn’t a surprise, but it doesn’t make it any easier to swallow.
SaskPower has announced it won’t be retrofitting Units 4 and 5 of the Boundary Dam Power Station with carbon capture and storage technologies. Instead, the two units will be retired within the next few years.
An equivalency agreement with the federal government would allow Units 4 and 5 to remain online until 2021 and 2024, respectively. Without an equivalency agreement, those units will be offline at the end of this year.
Perhaps the only short-term silver lining from this announcement is that SaskPower says there won’t be any job losses. We don’t know whether there will be job losses at the coal mines, but people were laid off a few years ago when SaskPower shuttered Units 1 and 2.
Local residents should be upset and dismayed over this announcement. There has been a lot of speculation about the future of Units 4 and 5, even before last fall when there were reports that SaskPower was leaning towards natural gas as a baseload power option, rather than carbon capture and storage.
Units 4 and 5 wouldn’t cost as much to retrofit as Unit 3, but it would still be more expensive than natural gas at this time.
Whether natural gas is still the cheaper option in a few years has yet to be seen.
It should also be noted that this announcement covers Units 4 and 5, and not Unit 6, which is the most powerful in SaskPower’s fleet. SaskPower also hasn’t made an announcement regarding the future of the Shand Power Station or Coronach’s Poplar River Power Station.
So for those who are writing the obituary for Boundary Dam, for coal-fired power generation in Saskatchewan, or for Estevan, Coronach and other communities affected by coal-fired generation, you might want to delay the story.
We also have to remember the amount of money that has been invested in CCS. Do you really think they want Unit 3 at the Boundary Dam Power Station to be a one-off project, a demonstration of the abilities of CCS with no follow-up?
It should also be noted that the federal government’s phase-out of coal-fired power covers just conventional coal-fired power plants, and does not include CCS. That doesn’t mean that they won’t expand the phase-out of coal-fired power to include clean coal, but they haven’t announced those plans at this point.
This decision to not retrofit Units 4 and 5 creates one of the issues that nobody wants, and that’s uncertainty. When SaskPower opted not to retrofit Units 1 and 2 a few years ago, there was disappointment, but there weren’t concerns about the future of the area.
The economy was strong, we knew Unit 3 was going to be retrofitted, and we expected the same would happen for Units 4, 5 and 6, as well as Shand.
It was sad to lose Units 1 and 2, but it wasn’t the end of the world.
Local residents should be troubled about the decision to not retrofit Units 4 and 5. We should be worried about the impact it will have on Boundary Dam, the mines and the local economy as a whole.
But the sky isn’t falling on Estevan. At least not yet.
