"The world's been waiting for this. Saskatchewan is playing a leadership role."
With those words, Rob Norris, Saskatchewan's minister responsible for SaskPower, told The Mercury in a hastily arranged embargoed interview late Monday that the Crown corporation and the province were making the commitment to boldly move forward with a $1.24 billion carbon capture project at nearby Boundary Dam Power Station.
By the time it is completed in 2014, Unit No. 3 at Boundary will be emitting at least 110 megawatts of electrical power while not emitting much, if any, carbon dioxide, thus securing coal as a sustainable fuel for the future.
Norris noted that according to preliminary feedback his office had received following the release of a media advisory on Monday, the global power players would be focusing on Estevan late Tuesday morning, waiting for the confirmation of this mega project that should set the gold standard for a commercial sized carbon capture and sequestration practices. It will also be one of the first, if not the first, of this size in the world.
Asked when the carbon capture part of the project would begin, Norris replied, "Wednesday morning."
According to the government and SaskPower news release, the project will transform the aging No. 3 unit into a producer of clean electricity while reducing greenhouse gas emission by about one million tonnes per year — the equivalent of taking more than 250,000 vehicles off Saskatchewan roads annually — in addition to capturing C02 for enhanced oil recovery.
Norris acknowledged that $240 million had been provided by the federal government a few years ago to help pay for the project, and most of that funding had been used in the first phase with the installation of a new generator capable of working in concert with the C02 capture technology that will now be added to the back end of BD3.
Norris noted that the window of opportunity had been closing quickly in terms of having to move forward, or put the rest of the capture program in mothballs, waiting for greenhouse gas emission targets and templates to come from Washington and Ottawa since the federal government in Canada had stated earlier that they were delaying their decisions, pending the outcome of the American government's contemplations regarding the same question.
When it became obvious that neither of the two senior governments were inclined to commit to a formula or foundation anytime soon, the decision to move on was crafted by Saskatchewan's decision makers.
Norris said he felt the decision "demonstrates leadership for the province and SaskPower.
"You have identified it. Delays in Washington and Ottawa and further deferrals as opposed to having the opportunity to make significant gains for the province led to this decision," said Norris. "We secure coal assets, continue to get 50 to 60 per cent of our power from coal of which we have hundreds of years of supply. This is an affordable source of fuel. We can secure the infrastructure while still investing in other sources of power production."
In the meantime, the province has assured citizens of a safe and affordable power supply while providing a commitment to the environment.
"This is especially important for Estevan. It's a significant investment with 6,000 person years of employment. You will have 500 to 600 people working in and around Estevan on the construction phase for some time," he said.
Norris said at the same time that SaskPower will continue to invest in a significant upgrade to the power grid, something, he said, the previous administration had overlooked.
While the investment in BD3 and other alternative power sources will require significant funds, the costs will be amortized over the years and paid for through corporate cash flows and loans so the public will not be faced with huge increases in power bills in the future.
Norris said SNC Lavalin, a leading engineering and construction company, will take the lead in the detailed engineering, procurement and construction activities at Boundary Dam.
Cansolv, a wholly owned subsidiary of Shell Global Solutions, will supply the carbon capture technology while Hitachi has already been awarded the contract and has begun construction of the state-of-the-art steam turbine that will be readied to be integrated with the carbon capture technology.
Norris said the capture of sulphur dioxide should not be downplayed either, since it will have value added capabilities along with the carbon dioxide that will be used for enhanced oil recovery. He added that several private companies have expressed a great deal of interest in buying and using the C02 for that very purpose since southeast Saskatchewan is teeming with oil-rich opportunities.
"We are moving forward with C02 capture in advance of federal publications regarding its value. We could be waiting months for them. We know this is scientifically sound and we can manage it. Our ducks are in a row," said Norris.
He added that outfitting BD Units 4 through 6 will be deferred until 2020 to 2023 and by then the province and SaskPower will have very reliable data and will anticipate technology improvements that can be implemented at that time.
"As others have deferred, we've moved forward and are committed to this environmental and business decision. We're taking a Saskatchewan position and setting a standard and expect the rest of Canada will understand," said Norris.
As far as further federal financing was concerned, Norris said he wouldn't want to contemplate that at this stage but noted that the $240 million they had put into the program in its early stages was very helpful.
In light of the interest from the private sector, Norris said he felt confident in the project.
Boundary Dam is SaskPower's largest generating facility with six units having a combined generating capacity of 824 megawatts. Announcement of the closure of smaller, older Units 1 and 2 has already been made. But with the province's three coal-fired units producing 50 per cent of the company's 3,513 megawatts, coal is still a major component. SaskPower has a total available capacity of 3,982 megawatts when independent power producers are taken into account.
