This is an e-mail response from James Glennie of Sask Wind to Mike Monea in relation to Sask Power's response to comments made by Glennie in a story published in the Mercury on April 15.
None of SaskPower's communications to date, including your e-mail this morning (April 22), answered the specific questions I raised. They are therefore acknowledgements and not responses.
You and/or SaskPower have been quoted, in the Estevan Mercury, the Star Phoenix, the Leader Post and other publications, claiming that coal + CCS is competitive with natural gas. Our analysis and that of the U.S. Government, the Economist, the Financial Times, Bloomberg, the Financial Post, various investment banks and others; indicates that coal + CCS is significantly more expensive than both natural gas and wind energy. This is after inclusion of revenue from the sale of CO2 and sulphuric acid and also after consideration of additional balancing costs necessitated by wind's variability.
Ratepayers stand to lose $1-billion and a private oil company stands to gain $2-billion, from the investment of $1.5-billion of public funds in Boundary Dam Unit #3 CCS. The additional crude oil royalties to which you refer would not be sufficient to cover the capital + interest costs of the CCS component of BD3 even if they accrued to SaskPower (which they do not). The additional economic activity you mention is no more than would be generated by the same investment in wind energy.
As per our letter to you of April 16 (and many before that) we would therefore appreciate an explanation of the economic rationale for proceeding with Boundary Dam Unit #3 CCS. We would particularly like to understand why that project was done in preference to wind energy which would have been $1-billion cheaper.
Your e-mail alludes to 'other factors' without mentioning specifics. Clearly wind energy, at 2.7%, is not over-represented in our generation portfolio. As a result 'balance in generation' or 'excessive reliance on wind' cannot be factors which would have swayed your company's decision. 'Baseload' is certainly a SaskPower favorite but, and as we demonstrate in our exhaustive 26 March report by reference to multiple electro-technical studies, wind is significantly cheaper than coal + CCS even after consideration of the requisite balancing costs. Practical evidence in support of this statement can be found in the fact that both Iowa and South Dakota already generate more than 25% of their electricity using wind turbines.
It would appear that your organization does not feel the need to justify its actions. This seems a little ironic given SaskPower's Crown status and the substantial spending of public funds which has taken place. Consequently we can but watch with interest as you consider the next stage of your science experiment (Boundary Dam Units 4 & 5). As you continue with that analysis we will continue to do our best to ensure that electricity ratepayers are not forced to carry the wholly avoidable $2 billion+ cost of that scheme.