Isra-Mart srl : SaskPower building carbon capture into $1.2-billion retrofit of Boundary Dam generating station

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The Saskatchewan government has given the green light to a long-planned, $1.2-billion project that will rebuild one of its old coal power plants to pump its greenhouse gas emissions underground.

When complete, the province said the aging unit of the Boundary Dam power station near Estevan will be one of the first commercial-scale carbon capture and storage facilities in the world.

The amount of power it will produce is small — only about three per cent of SaskPower’s overall generating capacity. But Rob Norris, minister responsible for the government-owned utility, said April 26 the project is an important step toward proving carbon-capture skeptics wrong.

“We’re positioned to play a leadership role,” Norris said. “We can demonstrate that this is scientifically sound and economically affordable.”

The government says the project will reduce greenhouse gas emissions by approximately one million tonnes per year — the equivalent of taking more than 250,000 vehicles off Saskatchewan roads each year.

Construction is to begin immediately and the unit should be working by 2014, with the capacity to produce 110 megawatts of power. Overall, the six units at the Boundary Dam produce 824 megawatts and SaskPower has a generating capacity of 3,513 megawatts, about half of that from coal.

The Boundary Dam carbon capture project has been discussed for years. Stephen Harper touted the benefits of carbon capture when he toured the site back in 2008.

SaskPower had been waiting for new federal rules on emissions from Ottawa before moving ahead. In the end, they could wait no longer.

“There’s a lot of equipment that has been queued to be built around the world and those things can’t be put on hold for too long because then you pay penalties if the project doesn’t go ahead,” said SaskPower vice president Mike Monea.

“Our decision was, do we stop and then wait for federal regulations or do we go with the business case which is sound?”

The unit being rebuilt would have been replaced in 2014. Including the carbon capture element adds $800 million to the cost.

But the overall price tag of the carbon capture system is similar to that of replacing the unit with more environmentally friendly technology such as natural gas, Monea said.

“You have to replace those megawatts,” he said. “It’s just not adding on a $1.24-billion infrastructure cost to the company.”

Saskatchewan needs carbon capture to work on a large scale. The province is the largest per capita emitter of greenhouse gasses in Canada due to its reliance on burning coal for energy. It’s one of the highest emitters per capita of any jurisdiction in the world — more than 70 tonnes per person annually — according to the Saskatchewan Environmental Society.

Critics charge the technology is expensive and the money would be better spent on renewable forms of power such as solar or wind.

Energy company Cenovus has injecting carbon dioxide into an aging oilfield near Weyburn since 2000.

Saskatchewan was pursuing a $270-million carbon capture and storage deal with the State of Montana, but those talks quietly fell apart late last year.

Saskatchewan was prepared to provide up to $50 million for the project and asked the Canadian government to pitch in $100 million. Montana wanted about $100 million from a U.S. federal stimulus package. But federal money never came in either country.